Exhibit
10.16
 
 
 2011 Bonus Plan
 
 March 2011




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Sterling Chemicals, Inc.
 2011 Bonus Plan
 Introduction:
 Bonus Plan Bonus Programs
 
    
    Corporate Performance Bonus Program  pays bonuses based on our
attainment of environmental and safety goals, our achievement of specified levels
of Operating Cash Flow and on individual performance; and
    
    Individual Performance Bonus Program  pays bonuses based on
individual performance, irrespective of our environmental or safety performance or
the amount of Operating Cash Flow we earn during the year.
 Eligible Employee Executives pro rata retired disabled
 Corporate Performance Bonus Program:
 General
 Bonus Target




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Corporate Performance Goals
  
    
    the number of Employee OSHA recordable injuries experienced during the
year;
    
    the number of Contractor OSHA recordable injuries experienced during
the year;
    
    the number of environmental and process safety management incidents
experienced during the year (subject to meeting all process safety management
regulations); and
    
    the amount of Operating Cash Flow earned during the year.
  Goal
    
    Threshold
    
    Target
    
    MaximumEmployee OSHA
Recordable Injuries(1)
    
    
    2
    
    
    
    1
    
    
    
    0
    
    
    
    10
    %Contractor OSHA
Recordable Injuries(1)
    
    
    2
    
    
    
    1
    
    
    
    0
    
    
    
    10
    %Environmental and
Process Safety
Incidents(1)(2)
    
    
    3
    
    
    
    2
    
    
    
    1
    
    
    
    10
    %Operating Cash Flow(3)
    
    
    $(1.0)M
    
    
    $
    10.0M
    
    
    $
    25.0M
    
    
    
    70
    %
 
 (1)
    
    No credit if incident results in a fine(2)
    
     Environmental Incident defined as: -
    
    A release of chemicals that results in a Superfund reportable event;-
    
    Any other environmental incident that requires immediate
notification to state or federal agencies (e.g., fire/explosion with potential
impact outside the facility); or-
    
    A violation resulting in a Notice of Enforcement that is not
resolved administratively. 
    
    Process Safety Incident defined as an incident in which a significant
fire, explosion, chemical release or injury occurred due to the direct involvement
of a chemical process. This includes a fire or explosion causing more than $50K in
direct cost to Sterling, a chemical release to the environment which impacts the
community or a serious injury attributed to such an event resulting in at least one
lost work day.
    
    All Process Safety Management regulations must be met to qualify.
    
    All incidents caused by Acts of God are excluded.(3)

    Operating Cash Flow means operating cash flow (from our cash flow statements)
minus maintenance capital expenditures and proceeds from the sale of non-PP&E assets
(excluding net interest payments, effects of bond repurchases, pension contributions
and any costs incurred by any special committees of our Board).  -2-




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times times
 
    
    $50,000 times10% (or $5,000) timesaggregate percentage earned during the year
times0.65, with the aggregate percentage being:
 Employee OSHA Recordable Injuries
    
    
    20
    %
    
    (10% @ 2X = 20%)Contractor OSHA Recordable Injuries
    
    
    20
    %
    
    (10% @ 2X = 20%)Environmental and Process Safety Incidents
    
    
    20
    %
    
    (10% @ 2X = 20%)Operating Cash Flow
    
    
    70
    %
    
    (70% @ 1X = 70%)Aggregate Percentage
    
    
    130
    %
 times times
 Individual Performance Goals
 times times
  -3-




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$50,000 times10% (or $5,000) timesaggregate percentage earned during the year times
0.35, with aggregate percentage being calculated as follows:
 Goal #1
    
    
    25
    %
    
    (25% @ 1.0 = 25%)Goal #2
    
    
    25
    %
    
    (25% @ 1.0 = 25%)Goal #3
    
    
    50
    %
    
    (25% @ 2.0 = 50%)Goal #4
    
    
    50
    %
    
    (25% @ 2.0 = 50%)Aggregate Percentage
    
    
    150
    %
 times times
 General Terms:
 Total Bonus Calculation and Payment .
  Payment Adjustments .
 etc
 -4-




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plus
 i.e.
 -5-