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                            LONG-TERM INCENTIVE PLAN

                                      OF

                      CHEVRON PHILLIPS CHEMICAL COMPANY LLC



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                            LONG-TERM INCENTIVE PLAN
                                      OF
                      CHEVRON PHILLIPS CHEMICAL COMPANY LLC

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

                              TABLE OF CONTENTS

<Table>
<S>                                                                       <C>
1.  Interpretation and Definitions..........................................1
      1.1  General..........................................................1
      1.2  Definitions......................................................2
2.  Administration..........................................................5
3.  Eligibility and Participation...........................................6
4.  Grants..................................................................6
      4.1  Grant and Exercise of Phantom Share Options......................6
      4.2  Grant and Exercise of Target Awards..............................9
      4.3  Provisions Common to Option and Performance Awards..............11
5.  Amendment or Discontinuance............................................11
6.  Recapitalization, Merger, and Consolidation; Change in Control.........13
7.  Miscellaneous..........................................................13
</Table>

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                           LONG-TERM INCENTIVE PLAN
                                      OF
                    CHEVRON PHILLIPS CHEMICAL COMPANY LLC


                                   PURPOSE

The purpose of the Long-Term Incentive Plan (the "Plan") is to attract,
motivate, and retain qualified management personnel by providing to them a
long-term incentive compensation plan that will provide competitive
compensation opportunities similar to those of comparable companies in the
chemical industry, align the interests of key management with the interests
of the Company's shareholders, and encourage the creation of additional
shareholder value for the benefit of the Company's shareholders.

The Plan is intended to be a compensation plan for a select group of
management or other highly-compensated employees, within the meaning of ERISA.

The Plan shall be effective as of January 1, 2001.

1.      INTERPRETATION AND DEFINITIONS

1.1     GENERAL.

(a)     INTERPRETATION. Unless a clear contrary intention appears, for
purposes of construction of this Plan and all related Plan Documents:

(i)     the singular number includes the plural number and vice versa;

(ii)    reference to any person includes such person's successors and assigns
        but, if applicable, only if such successors and assigns are permitted
        by the Plan Documents, and reference to a person in a particular
        capacity excludes such person in any other capacity or individually;

(iii)   reference to any gender includes each other gender;

(iv)    reference to any agreement, document or instrument means such
        agreement, document or instrument as amended or modified and in
        effect from time to time in accordance with the terms thereof;

(v)     reference to any law means such law as amended, modified, codified,
        replaced or reenacted, in whole or in part, and in effect from time
        to time, including rules and regulations promulgated thereunder, and
        reference to any section or other provision of any law means that
        provision of such law from time to time in effect and constituting
        the substantive amendment, modification, codification, replacement or
        reenactment of such section or other provision;

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(vi)    reference in any Plan Document to any article, section, appendix,
        schedule or exhibit means such article or section thereof or
        appendix, schedule or exhibit thereto;

(vii)   "hereunder", "hereof", and words of similar import shall be deemed
        references to a Plan Document as a whole and not to any particular
        Article, Section or other provision thereof;

(viii)  "including" (and with the correlative meaning "include") means
        including without limiting the generality of any description
        preceding such term;

(ix)    "or" is not exclusive;

(x)     relative to the determination of any period of time, "from" means
        "from and including" and "to" means "to but excluding;" and

(xi)    references to days, weeks, months, quarters and years are references
        to such periods as determined by the Gregorian calendar.

(b)     ACCOUNTING TERMS. In each Plan Document, unless expressly otherwise
provided, accounting terms shall be construed and interpreted, and accounting
determinations and computations shall be made, in accordance with generally
accepted accounting principles.

(c)     CONFLICT IN PLAN DOCUMENTS. If there is any conflict between any two
or more Plan Documents, such Plan Documents shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Plan Document dealing
most specifically with the matter as to which there is a conflict shall
prevail and control.


1.2     DEFINITIONS

(a)     "Average Return on Assets" means the statistical mean of the Returns
on Assets earned by a company in each year of a given Performance Cycle.

(b)     "Board" means the Board of Directors of the Company.

(c)     "Chevron" means Chevron Corporation, or such entity as may be
controlled by Chevron, that directly or indirectly holds a membership
interest in the Company.

(d)     "Change in Control" of the Company means the occurrence of an event
in which (i) any persons or persons acting together as a single entity, other
than Chevron Corporation or Phillips Petroleum Company, acquires more than
fifty percent (50%) of the Company's assets or voting shares; (ii) during any
period of two consecutive years, individuals who at the beginning of the
two-year period constitute the Board cease for

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any reason to constitute a majority of the Board; (iii) there is consummated
a merger or consolidation of the Company with any other corporation or entity
which the Board deems to be a Change in Control; or (iv) the shareholders of the
Company approve a plan of complete liquidation or dissolution of the Company
or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

(e)      "Committee" means the Compensation Committee of the Board.

(f)      "Company" means the Chevron Phillips Chemical Company LLC and any
successor entity.

(g)      "Date of Grant" means the effective date on which a Phantom Share or
a Target Award, as the case may be, is granted to a Participant.

(h)      "Date of Termination" means the date on which a Participant ceases
to be a regular, full-time Employee.

(i)      "Disability" means disability as determined under the Long-Term
Disability Plan of Chevron Phillips Chemical Company LP.

(j)      "EBITDA" means earnings before interest, taxes, depreciation, and
amortization as reported in the financial records of the Company, or the
financial records of any other company, or segment thereof, against whom the
performance of the Company is being compared.

(k)      "EBITDA Multiple" means the average of the quotients obtained by
dividing the market value of each company listed from time to time on Exhibit A
as of any relevant date by the EBITDA of that company as of the same date.
For purposes of the foregoing calculation, the market value of a company
shall be deemed to be the product of the publicly quoted price per share of
common stock of that company as of the close of business on the relevant date
(or, in the event that such day is not a day on which shares of such company
are traded on the principal exchange on which such shares are listed, on the
next day preceding the relevant date on which such shares are traded)
multiplied by the number of issued and outstanding shares of such company. In
the event that the EBITDA Multiple of a segment of a company, as opposed to
the company as a whole, is being obtained, the Committee shall make such
determinations, as to market value and other considerations, as it deems
necessary for purposes of arriving at an EBITDA Multiple which it deems fair
and appropriate in all the circumstances.

(l)      "Employee" means full-time employee of a Participating Employer.

(m)      "ERISA" means the Employee Retirement Income Security Act of 1974.

(n)      "Grant" means the award of a Phantom Share Option or the award of a
Target Award, as the case may be, subject to such terms and conditions as may
be set forth in a Grant Agreement accompanying such award.


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(o)      "Grant Agreement" or "Agreement" means, (i) in the case of a Grant of
Phantom Share Options, the agreement accompanying such Grant which sets forth
the number of Phantom Shares, the initial Market Value Per Share, vesting,
exercise rights, and other terms and conditions pertaining to that Grant as
established by the Committee, or (ii) in the case of a Grant of a Target
Award, agreement accompanying such Grant which sets forth the Performance
Schedule, vesting, and other terms and conditions pertaining to that Grant, as
established by the Committee.

(p)      "Market Value" means the estimated market value of the Company as
determined as of each Valuation Date by the Committee by multiplying the
Company's average annual EBITDA by the EBITDA Multiple of the group of
comparable chemical companies. For the calculation to be made January 1,
2001, the Committee shall use the Company's EBITDA for the preceding twelve
(12) months, and for the calculation, if any, to be made July 1, 2001, the
Committee shall use the Company's EBITDA for the preceding eighteen (18)
months. Thereafter, the Committee shall utilize the Company's EBITDA for the
preceding twenty-four (24) months.

(q)      "Market Value Per Share" means the Company's Market Value divided by
one hundred million (100,000,000).

(r)      "Participant" means an Employee to whom a Phantom Share Option or a
Target Award, as the case may be, may be granted pursuant to the Plan.

(s)      "Participating Employer" means any direct or indirect subsidiary
entity of the Company which, with the Company's consent, has adopted the Plan.

(t)      "Performance Award" means the amount payable to a Participant based
on the Company's Relative Return during a Performance Cycle, calculated as
described in the Performance Schedule of the Grant Agreement accompanying the
Participant's Target Award.

(u)      "Performance Cycle" means the continuous period during which a
Target Award is earned by Participants.

(v)      "Performance Schedule" means the schedule relating a Participant's
Performance Award amount to the Company's Relative Return during the
Performance Cycle.

(w)      "Phantom Share" means a fictitious share of Company stock, having a
value, as of each Valuation Date, equal to the Company's Market Value Per
Share.

(x)      "Phantom Share Option" or "Option" means the right to receive the
gain in the Company's Market Value Per Share for each Phantom Share granted.


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(y)      "Phillips" means Phillips Petroleum Company, or such entity as may be
controlled by Phillips Petroleum Company, that directly or indirectly holds a
membership interest in the Company.

(z)      "Plan" means the Chevron Phillips Chemical Company LLC Long-Term
Incentive Plan.

(aa)     "Plan Document" means this Plan, any Grant Agreement executed in
respect of any award, and any other document defining the rights and
liabilities of any Participant.

(bb)     "Relative Return" means the percentile ranking of the Company's
Average Return on Assets, as measured at the end of a Performance Cycle,
based on the Average Returns on Assets earned by a group of comparable
chemical companies.

(cc)     "Retirement" means retirement pursuant to the Retirement Income Plan
of Chevron Phillips Chemical Company LP, or any retirement plan of any
Participating Employer.

(dd)     "Return on Assets" means operating income of a company divided by
the average of that company's assets over the fiscal period during which such
operating income was earned. The operating income and assets data to be used
shall be derived from publicly available information reported by the Company
and each component company of a group of comparable chemical companies, with
allowance for such adjustments, as are deemed necessary by the Committee (i)
to achieve a degree of accuracy acceptable to the Committee and (ii) to
ensure that the results obtained are consistent with the return on assets
calculations made for purposes of the Employee Incentive Plan available
generally to Employees.

(ee)     "Target Award" means the Performance Award which will be paid to a
Participant, assuming that the Company's actual Relative Return equals the
Relative Return level required for the payment of awards at a one hundred
percent (100%) level, as established by the Committee at the beginning of
each Performance Cycle, and as set forth in Participants' Grant Agreements.

(ff)     "Termination of Service" occurs when a Participant ceases to serve
as an Employee for any reason.

(gg)     "Valuation Date" means each January 1, July 1 or such other date as
the Committee shall select.

(hh)     "Vest," and the correlative term "Vested," shall mean that the
holding period for Options described in Section 4.1(b) has been satisfied.

2.       ADMINISTRATION

(a)      The Plan shall be administered by the Committee.


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(b)      The Committee may establish, from time to time and at any time,
subject to the limitations of the Plan as set forth herein, such rules and
regulations and amendments and supplements thereto, as it deems necessary to
comply with applicable law and for the proper administration of the Plan. A
majority of the members of the Committee shall constitute a quorum. The vote
of a majority of a quorum shall constitute action by the Committee provided
that at least one member of the Committee appointed by Chevron and one member
appointed by Phillips concurs therein.

(c)      The Committee shall from time to time determine the names of those
executives or other key Employees who, in it opinion, should receive Phantom
Share Options, Target Awards, or both, and shall determine the number of
Phantom Shares Options and/or the value of Target Awards which should be
granted to such person, and the terms and conditions of any grant to be made;
provided, in those cases in which the Board has delegated to the Chief
Executive Officer of the Company (the "CEO") or other officers of the
Company the authority to make such determination with respect to certain
classes of Employees, such determinations shall be made by the CEO or such
officers.

(d)      Phantom Share Options and/or Target Awards shall be granted by the
Company only upon the prior approval of the Committee and upon the execution
of a Grant Agreement between the Company and the Participant. All such Grant
Agreements shall be entered into by the Company as agent for Participating
Employers, and all Phantom Share Option Grants, Target Awards and resultant
Performance Awards shall be and remain the liability of the Participating
Employer employing a Participant at the time of such Grants.

(e)      The Committee's interpretation and construction of the provisions of
the Plan and rules and regulations adopted by the Committee shall be final.
No member of the Committee or the Board shall be liable for any action taken,
or determination made, in respect of the Plan in good faith. Each member of
the Committee and each member of the Board shall be fully justified in
relying upon or acting in good faith upon any opinion, report, or information
furnished in connection with the Plan by any accountant, counsel, or other
specialist (including financial officers of the Company, whether or not such
persons are Participants in the Plan).

(f)      This Plan may be adopted by such subsidiary entities of the Company
as the Board or Committee may approve, whereupon such entities shall become
Participating Employers.

3.       ELIGIBILITY AND PARTICIPATION

(a)      Any Employee (including an Employee who is also a director or an
officer) is eligible to participate in the Plan. Participants shall be
selected, however, in consideration of the purpose of the Plan.


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(b)   The Committee, upon its own action, may grant, but shall not be
required to grant, Phantom Share Options and/or Target Awards to any
Employee. Grants may be made by the Committee at any time and from time to
time to new Participants, or to then Participants, or to a greater or lesser
number of Participants, and may include or exclude previous Participants, as
the Committee shall determine.

(c)   Each Grant shall be evidenced by a Grant Agreement in such form and
with such terms and conditions, as the Committee may from time to time
determine. The rights of a Participant with respect to any Grant shall at all
times be subject to the terms and conditions set forth in the Grant Agreement
relating thereto and in the Plan Documents. Except as required by this Plan,
different Grants need not contain terms or conditions similar to any Grant
made prior thereto or contemporaneously therewith. The Committee's
determinations under the Plan (including determinations of which Employees,
if any, are to receive Grants, the form, amount and timing of such Grants, the
terms and provisions of such Grants and the agreements evidencing same) need
not be uniform and may be made by it selectively among Employees who receive,
or are eligible to receive, Grants under the Plan.

4.    GRANTS

4.1   GRANT AND EXERCISE OF PHANTOM SHARE OPTIONS

(a)   Upon the Grant of any Phantom Share Options, the Committee shall
establish a Market Value Per Share for the fictitious shares underlying such
Options.

(b)   Except as otherwise in this Section 4.1 or in any other Plan Document,
(i) one third (1/3) of the Phantom Share Options granted pursuant to any
Grant Agreement shall become exercisable by the Participant twelve (12)
months, twenty-four (24) months, and thirty-six (36) months, respectively,
following the effective Date of Grant, and (ii) Phantom Share Options which
have become exercisable shall remain exercisable until the tenth (10th)
anniversary of the effective Date of Grant. Notwithstanding any provision to
the contrary in this Section 4.1, Phantom Share Options may not be increased
after the tenth (10th) anniversary of the Effective Date of Grant.

(c)   Upon a Participant's Retirement, all Phantom Share Options previously
granted shall Vest according to the schedule described in Section 4.1(b), and
all Options granted must be exercised within three (3) years of the
Participant's date of Retirement. In the event a Participant does not elect
to exercise any such Option prior to the expiration of such period, the same
shall be deemed to have been exercised on the final day thereof.

(d)   Upon a Participant's other voluntary Termination of Service, the
Participant shall be deemed to have elected to exercise all Vested Options,
and the value thereof shall be paid to the Participant as promptly as
reasonably practicable following the calculation of such value. All Options
not Vested as of the Participant's Date of Termination shall be forfeited.

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(e)   Upon a Participant's involuntary Termination of Service, the
Participant shall have a period of ninety (90) days from the Participant's
Date of Termination within which to exercise all Vested Options, and the
value thereof shall be paid to the Participant as promptly as reasonably
practicable following such exercise and the calculation of such value. In the
event a Participant does not elect to exercise any such Option prior to the
expiration of such period, the same shall be deemed to have been exercised on
the final day thereof. All Options not Vested as of the Participant's Date of
Termination shall be forfeited.

(f)   Upon a Participant's Disability, the Participant shall have a period of
twelve (12) months from the Participant's date of Disability within which to
exercise all Vested Options, and the value thereof shall be paid to the
Participant as promptly as reasonably practicable following such exercise and
the calculation of such value. In the event a Participant does not elect to
exercise any such Option prior to the expiration of such period, the same
shall be deemed to have been exercised on the final day thereof. All Options
not Vested as of the Participant's date of Disability shall be forfeited.

(g)   Upon a Participant's death, the Participant's beneficiary, executor,
administrator or other personal representative, as the case may be, shall
have a period of three (3) years from the Participant's date of death within
which to exercise all Vested Options, and the value thereof shall be paid to
the Participant's beneficiary or estate as promptly as reasonably practicable
following such exercise and the calculation of such value. In the event a
Participant's beneficiary, executor, administrator or other personal
representative does not exercise any such Option prior to the expiration of
such period, the same shall be deemed to have been exercised on the final day
thereof. All Options not Vested as of the Participant's date of death shall
be forfeited.

(h)   Notwithstanding the foregoing provisions of this Section 4.1, in the
event a Phantom Share Option holder (i) takes a leave of absence for personal
reasons or as a result of entry into the Armed Forces of the United States,
or (ii) terminates employment for reasons which, in the judgment of the
Committee are deemed to be special circumstances, the Committee may consider
such circumstances and may take such action in respect of the related Grant
and Grant Agreement as it may deem appropriate, including reducing or
canceling such Grant, and accelerating and/or extending the time rights with
respect to previously granted Phantom Share Options may be exercised;
provided in no event may any Option be exercised after the expiration of the
term of the Option.

(i)   The Committee shall determine the Market Value of the Company as of each
Valuation Date. For purposes of such determination, the comparator group
shall be initially composed of the publicly-traded chemical companies set
forth in Exhibit A. The Committee, in its sole discretion and judgment, may
make such changes to the comparator group from time to time as it deems
advisable to reflect industry merger and acquisition activity, shifts in
market or business strategy, or other considerations which could influence
the Company's Market Value determination.

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(j)     The Market Value Per Share shall always be based upon the most recent
calculation as set forth in Section 4.1(i). The calculated Market Value Per
Share will always be in effect for a period of six (6) months and until such
time as a new calculation is made based upon publicly-available market and
financial data. The calculated Market Value Per Share shall be the prevailing
value for all grant and exercise activity pursuant to the Plan.

(k)     A Phantom Share Option holder desiring to exercise rights with
respect to an Option shall notify the Company in writing in such manner as
shall be specified in the Grant Agreement.

(l)     The Phantom Share Option holder must be Vested with respect to the
number of Phantom Share Options he elects to exercise as set forth in the
Grant Agreement and must make each election to exercise on or before the end
of the Option's term.

(m)     Upon the exercise of rights with respect to a Phantom Share Option,
the Participant will receive the appreciation in value, if any, between the
Company's Market Value Per Share on the Date of Grant and the date of
exercise. The Market Value Per Share on the date of exercise will be based
upon the same calculation methodology as is set forth in Section 4.1(i).
Except as otherwise provided, the appreciation in value, if any, will be paid
to the Participant in the form of cash as a lump sum as soon as is practicable
following the Participant's written notification to the Company of his
exercise election. Such cash payment will be made consistent with the
Company's regular payroll policy and procedures and will be subject to
applicable tax and withholding regulations and procedures in effect at that
time.

(n)     On a date at least six (6) months in advance of the Participant's
election to exercise a Grant, the Participant may voluntarily elect to defer
receipt of his Phantom Share appreciation and to cause such amount to be
credited to his account with the Company's nonqualified deferred compensation
plan for executives. The rules and procedures governing the nonqualified
deferred compensation plan shall govern and be binding upon any Participants
who elect to make such deferrals.

(o)     A Participant shall not make payment for or in any way contribute to
the exercise of a Phantom Share Option. Any applicable withholding and
payroll taxes may be taken from the applicable appreciation in Market Value
Per Share due to the Participant following exercise.

4.2     GRANT AND EXERCISE OF TARGET AWARDS

(a)     The Performance Schedule for each Target award shall be established
by the Committee at the time of Grant. At the conclusion of each Performance
Cycle, Grants shall, subject to the provisions of the Plan Documents, become
payable.

(b)     Each Performance Cycle, subject to the other limitations set forth in
the Plan, may extend for a period of up to three (3) years from the Date of
the Grant. The length of each

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Performance Cycle shall be determined by the Committee at the time of Grant;
provided, if no term is established by the Committee the term of the
Performance Cycle shall be three (3) years from the Date of Grant.

(c)     Except as provided in Sections 4.2(d) and 4.3(c), upon voluntary or
involuntary Termination of Service, the Participant's Target Award and all
rights thereunder shall terminate effective at the close of business on the
date the Participant's Date of Termination; provided, in the case of
termination due to Retirement, Disability or death, the Participant shall be
entitled to a pro-rated Performance Award based on the Relative Return of the
Company through the end of the year in which the Date of Termination occurs.

(d)     Notwithstanding Section 4.2(c), in the event a Participant (i) takes
a leave of absence from the Company for personal reasons or as a result of
entry into the Armed Forces of the United States, or (ii) terminates
employment for reasons which, in the judgment of the Committee, are deemed to
be special circumstances, the Committee may consider such circumstances and
may take such action in respect of the related Grant and Grant Agreement as
it may deem appropriate under the circumstances, including extending the
rights of a Participant to continue participation in the Plan beyond his Date
of Termination; provided in no event may participation be extended beyond the
term of the Performance Cycle.

(e)     At the end of each year, the Committee shall determine the Return on
Assets earned by the Company and each of the companies composing the group of
comparable chemical companies selected by the Committee for each complete
fiscal year covered by the relevant Performance Cycle. The comparator group
shall be initially composed of the chemical companies, or chemical segments
thereof, set forth in Exhibit B.

(f)     The statistical mean average of the Company's Return on Assets for
the duration of the Performance Cycle (the Average Return on Assets) will be
compared to those of each of the component companies of the group of
comparable companies selected by the Committee. The comparison of the
Company's results against those of the component companies will yield a
percentile ranking, which will be used to determine the amount of the
Performance Award as a percentage of Participants' Target Award. The
Committee may make such further adjustments in such calculations as it deems
appropriate with respect to individual Participants or to Participants in the
aggregate.

(g)     For purposes of assessing the Company's Relative Return, only
companies against which relative performance can be reasonably determined for
each component year of the Performance Cycle shall be considered.

(h)     Upon final determination of the Participants' Performance awards by
the Committee, Participants will become eligible to receive payment.
Performance Award amounts shall be paid in cash as a lump sum as soon as
practicable after the final determination by the Committee.


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(i)    On a date at least six (6) months in advance of the end of a given
Performance Cycle, the Participant may voluntarily elect to defer receipt of
his Performance Award and to cause such amount to be credited to his account
with the Company's nonqualified deferred compensation plan for executives. The
rules and procedures governing the nonqualified deferred compensation plan
shall govern and be binding upon any Participants who elect to make such
deferrals.

4.3    PROVISIONS COMMON TO OPTIONS AND PERFORMANCE AWARDS

(a)    Awards shall be nontransferable and nonassignable, except that such
Awards may be transferred (i) to such beneficiary as the Participant may
designate in the event of death, Disability or other incapacity, or (ii) by
testamentary instrument or by the laws of descent and distribution. The
Committee shall prescribe the form and manner in which beneficiary
designations shall be made, revoked or amended. Any valid beneficiary
designation on file with the Company shall take priority over any conflicting
provision of any testamentary or similar instrument.

(b)    The establishment of the Plan shall not confer any legal rights upon
any Employee or other person to continued of employment, nor shall it
interfere with the right of any Participating Employer (which right is hereby
reserved) to discharge any Employee and to treat him without regard to the
effect which that treatment might have upon him as a Participant or potential
Participant.

(c)    In the event that any Participant engages in any activity which the
Committee judges to be detrimental to the Company or any Participating
Employer, or otherwise fails to substantially perform his or her obligations
as an Employee, the Committee may, at any time prior to payment of an award to
a Participant, cancel or reduce the award in whole or in part.

5.     AMENDMENT OR DISCONTINUANCE

Subject to the limitations set forth in this Section 5, the Board may at any
time and from time to time, without the consent of the Participants, alter,
amend, revise, suspend, or discontinue the Plan in whole or in part. Any such
amendment shall, to the extent deemed necessary or advisable by the Committee,
be applicable to any outstanding Grants theretofore awarded under the Plan,
notwithstanding any contrary provisions contained in any Grant Agreement. In
the event of any such amendment to the Plan, the holder of any Grant
outstanding under the Plan shall, upon request of the Committee and as a
condition to the exercisability thereof, execute a conforming amendment in the
form prescribed by the Committee to any Grant Agreement relating thereto.
Notwithstanding anything contained in this Plan to the contrary, unless
required by law, no action contemplated or permitted by this Section 5 shall
adversely affect any rights of Participants or obligations of the Company to
Participants with respect to any award theretofore granted under the Plan
without the consent of the affected Participant.


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6.     RECAPITALIZATION, MERGER, AND CONSOLIDATION; CHANGE IN CONTROL

(a)    The existence of this Plan and the awards granted hereunder shall not
affect in any way the right or power of the Company or those entities holding
membership interests in the Company to make or authorize any or all
adjustments, reorganizations, or other changes in the Company's capital
structure and its business, or any merger or consolidation of the Company, or
the dissolution or liquidation of the Company, or any sale or transfer of all
or part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

(b)    In the event of a Change in Control, all Grants outstanding shall
thereupon automatically be accelerated and payable in full. In the case of
Performance Awards, payment shall be made at a Relative Return level
determined by the Committee, which shall be deemed payment in full. The
determination of the Committee that any of the foregoing conditions has been
met shall be binding and conclusive on all parties. Notwithstanding the
foregoing, in the event that, incident to a Change in Control, provision is
made for the transfer of rights under this Plan to another or successor Plan,
Participants shall be allowed to make such transfer.

7.     MISCELLANEOUS

(a)    Neither the adoption of this Plan nor any action of the Board or the
Committee shall be deemed to give any person any right to be granted an award
or any other rights except as may be evidenced by Grant Agreement, or any
amendment thereto, duly authorized by the Committee and executed on behalf of
the Company, and then only to the extent and upon the terms and conditions
expressly set forth therein.

(b)    The Company shall have the right to deduct from all amounts hereunder
paid in cash, any federal, state, local, or other taxes required by law to be
withheld with respect to such payments.

(c)    THE VALIDITY, CONSTRUCTION AND EFFECT OF THE PLAN, ANY PLAN DOCUMENTS,
AND ANY ACTIONS TAKEN OR RELATING TO THE PLAN SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN SUCH STATE.

(d)    The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, expressly to assume and agree to
perform the Company's obligations under this Plan in the same manner and to
the same extent that the Company would be required to perform them if no such
succession had taken place.

(e)    The Plan shall be unfunded. Neither the Company, any Participating
Employer, the Committee, nor the Board shall be required to segregate any
assets or secure any liability that may at any time be represented by Grants
made pursuant to the Plan.


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<Page>

(f)    The Plan shall have a term of ten (10) years from its effective date.
After termination of the Plan, no future Grants may be made.

































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<Page>

                                   EXHIBIT A

                              COMPARATOR COMPANIES
                                 OPTION AWARDS

The following companies shall be the initial comparator companies for the
purposes of Option awards:

1.  Air Products and Chemicals, Inc.

2.  The Dow Chemical Company

3.  E.I. du Pont de Nemours and Company

4.  Eastman Chemical Company

5.  Georgia Gulf Corporation

6.  Lyondell Chemical Company

7.  Millennium Chemicals Inc.

8.  NOVA Chemicals Corporation

9.  Rhome and Haas Company

10. Solutia Inc.















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<Page>

                                   EXHIBIT A

                              COMPARATOR COMPANIES
                               PERFORMANCE AWARDS

The following companies, or the chemicals segments thereof, shall be the
initial comparator companies for the purposes of Performance Awards:

1.  BP, p.l.c. (chemicals segment)

2.  Borealis (polyolefins & chemicals segment)

3.  The Dow Chemical Company

4.  Eastman Chemical Company

5.  Equistar Chemicals, LP

6.  ExxonMobil Corporation (chemicals segment)

7.  Georgia Gulf Corporation

8.  NOVA Chemicals Corporation

9.  Royal Dutch/Shell Group (Chemicals segment)

10. Solutia Inc.

11. Sunoco, Inc. (chemicals segment)












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