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                                                                    EXHIBIT 10.1

                            STERLING CHEMICALS, INC.

            FOURTH AMENDED AND RESTATED KEY EMPLOYEE PROTECTION PLAN

                             PRELIMINARY STATEMENTS

       A.     Sterling Chemicals, Inc. is a Delaware corporation and the
              successor by merger to Sterling Chemicals Holdings, Inc., a
              Delaware corporation.

       B.     The Board (as defined below) has previously adopted that certain
              Third Amended and Restated Key Employee Protection Plan (the
              "Existing Plan").

       C.     The Board desires to amend the Existing Plan in certain respects
              and to restate the Existing Plan as so amended in its entirety.

              NOW, THEREFORE, the Existing Plan is hereby amended and restated,
effective as of the Effective Date (as defined below), to read in its entirety
as follows:

                                    ARTICLE I

                         Definitions and Interpretations

              Section 1.01. Definitions. Capitalized terms used in this Plan
shall have the following respective meanings, except as otherwise provided or as
the context shall otherwise require:

              "Annual Compensation" means, as of the Date of Computation with
       respect to any Participant, the sum of (a) the highest annual base salary
       of such Participant in effect at any time during the three-year period
       ending immediately prior to the Date of Computation plus (b) the Targeted
       Bonus, if any, of such Participant in effect immediately prior to the
       Date of Computation.

              "Applicable Multiplier" means (a) with respect to any Existing
       Participant, the number set forth opposite such Existing Participant's
       name on Exhibit B attached hereto under the heading "Applicable
       Multiplier" and (b) with respect to any other Participant, the multiplier
       specified in the Instrument of Designation executed and delivered by the
       Company and such Participant in accordance with Section 2.01(b);
       provided, however, that in no event shall the Applicable Multiplier of
       any Participant be less than 0.50 (except as provided in Section 2.03) or
       greater than 3.00.

              "Benefit Plan" means any employee benefit plan (including any
       employee benefit plan within the meaning of Section 3(3) of the Employee
       Retirement Income Security Act of 1974), program, arrangement or practice
       maintained, sponsored or provided by the Company or any Subsidiary,
       including those relating to bonuses, incentive compensation, retirement
       benefits, stock options, stock ownership or stock awards, healthcare or
       medical


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       benefits, disability benefits, death benefits, disability, life, accident
       or travel insurance, sick leave, vacation pay or termination pay.

              "Board" means the Board of Directors of the Company.

              "Change of Control" means the occurrence of any of the following
              events:

                    (a) 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 affiliates' managed funds or accounts
              ("Resurgence"), of Company 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 Company entitled to vote generally in the election of
              directors (the "Outstanding Company 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 Company or
              any of its affiliates; or (B) any acquisition by any corporation
              pursuant to a transaction that complies with subclauses (c)(i),
              (c)(ii) and (c)(iii) of this definition;

                    (b) the time at which individuals who, immediately following
              the Effective Date, constitute the Board (the "Incumbent Board")
              cease for any reason to constitute at least a majority of the
              Board; provided, however, that any individual becoming a director
              at any time following the Effective Date whose election, or
              nomination for election by the Company'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;

                    (c) consummation of a reorganization, merger, statutory
              share exchange or consolidation or similar corporate transaction
              involving the Company or any of its subsidiaries, a disposition of
              assets by the Company or the acquisition of assets or stock of
              another entity by the Company or any of its subsidiaries (each, a
              "Business Combination"), in each case unless, following such
              Business Combination, (i) all or substantially all of the
              individuals and entities that were the beneficial owners of the
              Outstanding Company 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 Company or has
              purchased the Company's assets in a disposition of assets either
              directly or through one or more subsidiaries) in substantially the
              same proportions as their ownership immediately


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              prior to such Business Combination of the Outstanding Company
              Voting Securities, (ii) no Person (excluding Resurgence or any
              employee benefit plan (or related trust) of the Company 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 (iii) 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

                    (d) approval by the stockholders or other relevant
              stakeholders of the Company of a complete liquidation or
              dissolution of the Company.

              "Code" means the Internal Revenue Code of 1986, as amended.
       Reference in this Plan to any section of the Code shall be deemed to
       include any amendments or successor provisions to such section and any
       regulations under such section.

              "Company" means Sterling Chemicals, Inc. and any Successor.

              "Compensation Committee" means the Compensation Committee of the
              Board.

              "Date of Computation" means the earlier of (a) the date on which
       an event occurs that results in a Participant terminating his or her
       employment for Good Reason and (b) the actual date of such Participant's
       termination by the Company for any reason other than Misconduct or
       Disability.

              "Disability" means, with respect to any Participant, a physical or
       mental condition of such Participant that, in the opinion of a licensed
       physician reasonably acceptable to the Company and such Participant or
       his or her legal representative, (a) prevents such Participant from being
       able to perform the services required of him or her as an employee of the
       Company, (b) has continued for at least 180 days during any period of 12
       consecutive months and (c) is reasonably expected to continue.

              "Effective Date" means March 12, 2004.

              "Excise Tax" has the meaning specified in Section 2.05.

              "Existing Participants" means the Participants in this Plan as of
       the Effective Date, each of whom is listed on Exhibit B attached hereto.

              "Existing Plan" has the meaning specified in the Preliminary
       Statements.

              "Good Reason" means, with respect to any Participant, any of the
       following actions or failures to act:


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              (i)   if (but only if) such Participant has an Applicable
                    Multiplier of 2.00 or higher, a material 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 Company 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)   if (but only if) such Participant has an Applicable
                    Multiplier of 2.00 or higher, the assignment to such
                    Participant of duties and/or responsibilities that are
                    materially inconsistent with such Participant's status,
                    positions, duties, responsibilities and functions with the
                    Company immediately prior to the effective date of such
                    assignment;

            (iii)   a material reduction by the Company in such Participant's
                    total compensation in effect immediately prior to the
                    effective date of such reduction;

             (iv)   the failure of the Company 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 Company shall not
                    constitute "Good Reason" hereunder if such amendment,
                    modification or discontinuance applies generally to the
                    Company's salaried work force and does not single out such
                    Participant for disparate treatment;

              (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;

             (vi)   any purported termination of such Participant's employment
                    for Misconduct or Disability not in accordance with the
                    provisions of Section 3.02; or

            (vii)   any purported termination of such Participant's
                    participation in this Plan not in accordance with the
                    provisions of Section 2.01(c).

       For purposes of this definition, none of the actions described in clauses
       (i) through (iii) above shall constitute a Good Reason with respect to
       any Participant if it was an isolated and inadvertent action not taken in
       bad faith by the Company and if it is remedied by the Company promptly
       after receipt of notice thereof given by such Participant. For purposes
       of this definition, any action or failure to act described in clauses (i)
       through (viii) above shall cease to be a Good Reason with respect to any
       Participant on the date which is 90


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       days after such Participant acquires actual knowledge of such action or
       failure to act unless, prior to such date, such Participant gives a
       Termination Notice pursuant to Section 3.01. In the event of any dispute
       between the Company, on the one hand, and any Participant, on the other
       hand, with respect to the amount of total compensation of such
       Participant for purposes of clause (iii) above or the aggregate value or
       level of any of such Participant's benefits for purposes of clause (iv)
       above, the Company and such Participant shall use their best efforts to
       resolve such dispute themselves. If they are unable to resolve the
       dispute within 15 business days, Deloitte & Touche L.L.P., or such other
       nationally recognized accounting firm or employee benefits firm
       acceptable to the Company and such Participant, shall be engaged by the
       Company to make its own determination with respect to the dispute and the
       determination by such firm shall be final and binding on the Company
       (including the Compensation Committee) and such Participant. If any firm
       is engaged with respect to any dispute as aforesaid, (A) such firm shall
       be instructed to make its determination as soon as practicable and to use
       such materiality standard as such firm may determine to be reasonable
       under the circumstances and (B) the disputants shall provide such firm
       with all books, records and other information relevant to such dispute as
       such firm may reasonably request. No firm engaged as aforesaid shall be
       liable or responsible to the Company (including the Compensation
       Committee) or any Participant for any determination made by such firm in
       good faith.

              "Gross-Up Payment" has the meaning specified in Section 2.05.

              "Misconduct" means, with respect to any Participant:

              (a)   the commission by such Participant of acts of dishonesty or
                    gross misconduct which are demonstrably injurious to the
                    Company (monetarily or otherwise) in any material respect;

              (b)   the failure of such Participant to observe and comply in all
                    material respects with the Company's published policies
                    relating to alcohol and drugs, harassment or compliance with
                    applicable laws;

              (c)   the failure of such Participant to observe and comply with
                    any other lawful published policy of the Company, 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 Company;

              (d)   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 Company;

              (e)   the refusal or willful failure of such Participant to
                    perform, in any material respect, his or her duties with the
                    Company, but only if such failure was not caused by
                    disability or incapacity and shall have continued unremedied
                    for more


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                    than 30 days after written notice thereof is given to such
                    Participant by the Company;

              (f)   the conviction of such Participant for a felony offense; or

              (g)   any willful conduct on the part of such Participant that
                    prejudices, in any material respect, the reputation of the
                    Company 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.

       For purposes of clauses (d), (e) and (g) above, no act or failure to act
       on the part of any Participant shall be considered "willful" if such act
       or failure to act was done or omitted to be done by such Participant in
       good faith and with the reasonable belief that such Participant's action
       or omission was in the best interest of the Company. In case of any
       dispute regarding whether or not any conduct by a Participant meets any
       of the standards set forth in clauses (a) through (g) above, the burden
       of proof shall rest with the Company.

              "Participants" means, except as otherwise provided in Section
       2.01(c), the Existing Participants and those employees of the Company or
       any Subsidiary who are from time to time designated by the Compensation
       Committee as Participants in accordance with Section 2.01(b).

              "Plan" means this Fourth Amended and Restated Key Employee
       Protection Plan, as amended, supplemented or modified from time to time
       in accordance with its terms.

              "Protection Period" means (a) with respect to any Participant
       having an Applicable Multiplier that is greater than or equal to 1.5, the
       period commencing 180 days prior to the date on which the relevant Change
       of Control occurs and ending two years after the date on which such
       Change of Control occurs, and (b) with respect to any Participant having
       an Applicable Multiplier that is less than 1.5, the period commencing 180
       days prior to the date on which the relevant Change of Control occurs and
       ending 18 months after the date on which such Change of Control occurs.

              "Severance Amount" has the meaning specified in Section
       2.02(a)(i).

              "Subsidiary" means any corporation, limited partnership, general
       partnership, limited liability company or other form of entity, a
       majority of any class of voting stock or other voting rights of which is
       owned, directly or indirectly, by the Company.

              "Successor" means a successor to all or substantially all of the
       capital stock, business, operations or assets of the Company (whether
       direct or indirect, by purchase, merger, consolidation or otherwise).

              "Targeted Bonus" means, with respect to any Participant, the
       amount determined by multiplying (a) the annual base salary of such
       Participant in effect immediately prior to the


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       Date of Computation times (b) such Participant's Bonus Percentage, if
       any, in effect at the "Target Payout Level" (i.e., 1x level) on the Date
       of Computation under the Company's bonus plan for salaried employees.

              "Termination Date" means, with respect to any Participant, the
       termination date specified in the Termination Notice delivered by such
       Participant to the Company in accordance with Section 3.01 or the actual
       date of termination of such Participant's employment by the Company for
       any reason other than Misconduct or Disability, as applicable.

              "Termination Notice" means, as appropriate, (a) a notice from a
       Participant to the Company purporting to terminate such Participant's
       employment for Good Reason in accordance with Section 3.01 or (b) a
       notice from the Company to a Participant purporting to terminate such
       Participant's employment for Misconduct or Disability in accordance with
       Section 3.02.

              "Triggering Payment" has the meaning specified in Section 2.05.

              Section 1.02. Interpretation. In this Plan, unless a clear
contrary intention appears, (a) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Plan as a whole and not to any
particular Article, Section or other subdivision, (b) reference to any Article
or Section, means such Article or Section hereof and (c) the words "including"
(and with correlative meaning "include") means including, without limiting the
generality of any description preceding such term. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.

                                   ARTICLE II

                            Eligibility and Benefits

              Section 2.01. Eligible Employees. (a) This Plan is only for the
benefit of Participants, and no other employees or personnel shall be eligible
to participate in this Plan or to receive any rights or benefits hereunder.

              (b) In addition to the Existing Participants, the Compensation
Committee shall be authorized from time to time after the Effective Date to
designate one or more employees of the Company as Participants. Each such
designation shall be evidenced by an Instrument of Designation signed by the
Company and such Participant substantially in the form of Exhibit A hereto. Each
such Instrument of Designation, and the designation evidenced thereby, shall be
binding on the Company.

              (c) In the event that the Compensation Committee determines in
good faith that any Participant is no longer a key employee of the Company and
thus should not continue to participate in this Plan, the Compensation Committee
shall be permitted, subject to the limitations set forth below, to terminate
such Participant's participation in this Plan on such date as shall be specified
in a written notice delivered to such Participant not less than 60 days prior to


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the date so specified, which notice shall state that it is a termination notice
given pursuant to this Section 2.01(c). Upon the effective date of such
termination, such Participant shall cease to be a Participant and, accordingly,
such Participant shall no longer be entitled to receive any rights or benefits
hereunder; provided, however, that such termination shall not affect the rights
or benefits of such Participant or the obligations of the Company accrued under
this Plan as of the effective date of such termination or the rights or benefits
of such Participant or the obligations of the Company accruing under this Plan
after the effective date of such termination on account of any Change of Control
that occurred on or before such effective date or that occurs within 180 days
after such effective date. Notwithstanding the foregoing, the Compensation
Committee shall not be permitted to terminate any Participant's participation in
this Plan unless the sole reason therefor is that, in the good faith opinion of
the Compensation Committee, such Participant has ceased to be a key employee of
the Company and thus should not continue to participate in this Plan. Without
limitation of the foregoing, the Compensation Committee may not terminate any
Participant's participation in this Plan if such termination is directly or
indirectly related to, connected with, in anticipation of, in furtherance of,
pursuant to the terms of or during the pendency of any Change of Control or is
for the purpose of directly or indirectly encouraging or facilitating a Change
of Control. In case of any dispute regarding whether or not any purported
termination of any Participant's participation in this Plan is permitted by, or
satisfies any of the requirements of, this paragraph (c), the burden of proof
shall rest with the Company.

              Section 2.02. Description of Benefits Triggered by Termination
During the Protection Period. (a) Each Participant shall be entitled to receive
the benefits described below if a Change of Control occurs and if, during the
Protection Period for such Participant, either such Participant terminates or
has terminated his or her employment for Good Reason in accordance with Section
3.01 or the Company terminates or has terminated such Participant's employment
for any reason other than Misconduct or Disability in accordance with Section
3.02:

              (i) subject to paragraph (c) below, the Company shall pay to such
       Participant, within 30 days after such Participant's Termination Date or,
       in the event that such Participant's Termination Date occurred within the
       180-day period immediately preceding the occurrence of a Change of
       Control, within 30 days after such Change of Control, a lump sum cash
       payment equal to the sum of (A) an amount (the "Severance Amount") equal
       to (subject to Section 2.04(b)) such Participant's Annual Compensation as
       of the applicable Date of Computation times such Participant's Applicable
       Multiplier as of the applicable Date of Computation, plus (B) all unused
       vacation time accrued by such Participant as of such Participant's
       Termination Date under the Company's vacation policy, plus (C) all
       accrued but unpaid compensation earned by such Participant as of such
       Participant's Termination Date, plus (D) all unpaid vested benefits
       earned or accrued by such Participant as of such Participant's
       Termination Date under any Benefit Plan (other than a "qualified plan"
       within the meaning of section 401(a) of the Code) in effect immediately
       prior to the date on which the Change of Control occurs; provided,
       however, that (x) any amounts payable to any Participant pursuant to this
       clause (i) shall be reduced by an amount equal to the aggregate amount
       previously paid to such Participant by the Company as severance
       (including payments previously made by the Company pursuant to this
       Section 2.02(a)(i) or Section 2.03) and (y) if a Participant becomes
       entitled to benefits under this Plan with respect to the Change of
       Control that occurred on December 19, 2002,


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       such Participant's Severance Amount due in respect of such Change in
       Control shall be equal to the greater of (1) the amount which would have
       been payable to the Participant under the Existing Plan or (2) the amount
       which would be payable to such Participant pursuant to Section 2.03,
       determined as if such Change of Control had not occurred.

             (ii) for a period of 24 months (including 18 months of COBRA
       coverage) following such Participant's Termination Date (including any
       period during which such Participant was covered by such plans and
       programs pursuant to Section 2.03), such Participant shall continue to be
       covered by all life, health care, medical and dental insurance plans and
       programs (excluding disability) of the Company by which he or she was
       covered on his or her Termination Date notwithstanding any subsequent
       termination or amendment of any such plan or programs and notwithstanding
       any eligibility provisions thereof to the contrary, provided that (A)
       such Participant makes a timely COBRA election following such
       Participant's Termination Date and (B) such Participant pays the regular
       employee premium required by such plans and programs or by COBRA, as the
       case may be.

              (b) No Participant shall be entitled to receive any of the
benefits described in this Section 2.02 on account of any Change of Control
unless (i) such Change of Control occurred (A) while such Participant was
employed by the Company or (B) within 180 days after such Participant's
Termination Date and (ii) either such Participant terminates or has terminated
his or her employment for Good Reason in accordance with Section 3.01 or the
Company terminates or has terminated such Participant's employment for any
reason other than Misconduct or Disability in accordance with Section 3.02, in
each case, during the Protection Period for such Participant.

              (c) Notwithstanding anything to the contrary contained in this
Section 2.02, if a Participant who has an Applicable Multiplier of 2.00 or
higher is entitled to receive a Severance Amount pursuant to Section 2.02(a), up
to 50% of the Severance Amount paid to such Participant shall be subject to
repayment by such Participant if, within one year after the date of termination
of such Participant's employment with the Company, such Participant owns,
manages, operates or controls (or joins in the ownership, management, operation
or control of), or becomes employed by or connected in any manner with, any
business engaged in the manufacture or sale of styrene, acrylonitrile or acetic
acid anywhere in the world (each, a "Competitive Position"). In the event that a
Participant is required to repay any portion of his or her Severance Amount
pursuant to this paragraph (c), such portion shall be determined by multiplying
50% of his or her Severance Amount by a fraction, the numerator of which is the
number of days from the date such Participant begins in such Competitive
Position until the first anniversary of the date of termination of such
Participant's employment with the Company, and the denominator of which is 365.
This paragraph (c) shall not be applicable to any Severance Amount paid to a
Participant pursuant to Section 2.03 unless such Severance Amount is later
increased due to the subsequent occurrence of a Change of Control within the
relevant Participant's Protection Period to the Severance Amount determined by
using 100% of such Participant's Applicable Multiplier.

              Section 2.03. Description of Benefits Triggered by Termination
Outside the Protection Period. If any Participant terminates his or her
employment for Good Reason in accordance with Section 3.01 or the Company
terminates such Participant's employment for any


                                      -9-
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reason other than Misconduct or Disability in accordance with Section 3.02, and
such termination does not occur within such Participant's Protection Period,
then such Participant shall be entitled to receive, and the Company shall be
obligated to pay and provide, all the benefits described in Section 2.02 to the
same extent as if a Change of Control had occurred on the date which is 60 days
prior to the relevant Termination Date; provided, however, that, for purposes of
calculating the Severance Amount payable to such Participant under this Section
2.03, the Applicable Multiplier of such Participant shall be reduced by 50%. In
the case of each termination of employment covered by this Section 2.03, a
Change of Control shall be deemed to have occurred on the date which is 60 days
prior to the relevant Termination Date and, accordingly, all other provisions of
this Plan shall be construed as if a Change of Control had actually occurred on
such date.

              Section 2.04. Additional Provisions Relating to Benefits under
Sections 2.02 and 2.03. (a) Anything in this Plan to the contrary
notwithstanding, the Company's obligation to continue the benefits described in
Section 2.02(a)(ii) for any Participant shall cease if and when such Participant
becomes employed, on a full-time basis, by a third party which provides such
Participant with substantially similar benefits.

              (b) Notwithstanding anything to the contrary contained in this
Plan, the Severance Amount payable to any Participant under this Plan shall be
reduced by the aggregate amount of all separation, severance or termination
payments due to such Participant under (i) any Benefit Plan (other than this
Plan), (ii) any agreement between such Participant and the Company or (ii) any
applicable law, statute, rule, regulation, order or decree (or other
pronouncement having the effect of law) of any nation or governmental authority.

              Section 2.05. Certain Additional Payments by the Company. Anything
in this Plan to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution to or for the benefit of any
Participant under this Plan ("Triggering Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest or
penalties, being collectively referred to below as the "Excise Tax"), then such
Participant shall be entitled to receive from the Company an additional payment
(the "Gross-Up Payment") in an amount such that after payment by such
Participant of all taxes (including any interest or penalties imposed with
respect to such taxes) including any Excise Tax imposed on the Gross-Up Payment,
such Participant retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Triggering Payment. Notwithstanding the foregoing, in no
event shall any Participant be entitled to receive a Gross-Up Payment greater
than 25% of such Participant's Annual Compensation. All determinations required
to be made under this Section 2.05 with respect to a particular Participant
shall be made by the independent accounting firm then retained by the Company in
the ordinary course of business (which firm shall provide detailed supporting
calculations to the Company and such Participant) and such determination shall
be final and binding on the Company (including the Compensation Committee) and
all Participants.

              Section 2.06. Cost of Plan; Plan Unfunded; Participant's Rights
Unsecured. The entire cost of this Plan shall be borne by the Company, and no
contributions shall be required of the Participants. The Company shall not be
required to establish any special or separate fund or


                                      -10-
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make any other segregation of funds or assets to assure the payment of any
benefit hereunder. The right of any Participant to receive the benefits provided
for herein shall be an unsecured claim against the general assets of the
Company.

                                   ARTICLE III

                               Termination Notices

              Section 3.01. Termination Notices from Participants. For purposes
of this Plan, in order for any Participant to terminate his or her employment
for Good Reason, such Participant must give a written notice of termination to
the Company, which notice shall (a) be in writing and signed by such
Participant, (b) specify the termination date, (c) state that the termination is
for a Good Reason and (d) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such Good Reason. Any Termination
Notice given by a Participant that is not in compliance, in all material
respects, with the foregoing requirements shall be invalid and ineffective for
purposes of this Plan. If the Company receives from any Participant a
Termination Notice that it believes is invalid and ineffective as aforesaid, it
shall promptly notify such Participant of such belief and the reasons therefor.

              Section 3.02. Termination Notices from Company. For purposes of
this Plan, in order for the Company to terminate any Participant's employment
for Misconduct, the Company must give a written notice of termination to such
Participant, which notice shall (a) specify the termination date, (b) state that
the termination is for Misconduct and (c) set forth in reasonable detail the
facts and circumstances claimed to provide a basis for such termination for
Misconduct. For purposes of this Plan, in order for the Company to terminate any
Participant's employment for Disability, the Company must give a written notice
of termination to such Participant, which notice shall (i) specify the
termination date, (ii) state that the termination is for Disability and (iii)
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for such termination for Disability. Any Termination Notice given by the
Company that is not in compliance, in all material respects, with the foregoing
requirements shall be invalid and ineffective for purposes of this Plan. Any
Termination Notice purported to be given by the Company to any Participant after
the death or retirement of such Participant shall be invalid and ineffective.

                                   ARTICLE IV

                               Dispute Resolution

              Section 4.01. Negotiation. Subject to Section 4.03, in case a
dispute or controversy shall arise between any Participant (or any person
claiming by, through or under any Participant) and the Company (including the
Compensation Committee) relating to or arising out of this Plan, either
disputant may give written notice to the other disputant ("Dispute Notice") that
it wishes to resolve such dispute or controversy by negotiations, in which event
the disputants shall attempt in good faith to negotiate a resolution of such
dispute or controversy. If the dispute or controversy is not so resolved within
30 days after the effective date of the Dispute Notice, subject to Section 4.03,
either disputant may initiate arbitration of the matter as provided in


                                      -11-
<PAGE>


Section 4.02. All negotiations pursuant to this Section 4.01 shall be held at
the Company's principal offices in Houston, Texas (or such other place as the
disputants shall mutually agree) and shall be treated as compromise and
settlement negotiations for the purposes of the federal and state rules of
evidence and procedure.

              Section 4.02. Arbitration. Subject to Section 4.03, any dispute or
controversy arising out of or relating to this Plan which has not been resolved
by negotiations in accordance with Section 4.01 within 30 days of the effective
date of the Dispute Notice shall, upon the written request of either disputant,
be finally settled by arbitration conducted expeditiously in accordance with the
labor arbitration rules of the American Arbitration Association. The arbitrator
shall be not empowered to award damages in excess of compensatory damages and
each disputant shall be deemed to have irrevocably waived any damages in excess
of compensatory damages. The arbitrator's decision shall be final and legally
binding on the disputants and their successors and assigns. The fees and
expenses of the arbitrator shall be borne solely by the prevailing disputant or,
in the event there is no clear prevailing disputant, as the arbitrator deems
appropriate. All arbitration conferences and hearings shall be held in Houston,
Texas.

              Section 4.03. Exclusivity, etc. The dispute resolution procedures
set forth in Sections 4.01 and 4.02 shall not apply to any matter which, by the
express provisions of this Plan, is to be finally determined by the Compensation
Committee or by an accounting firm or employee benefits firm. No legal action
may be brought with respect to this Plan except for the purpose of specifically
enforcing the provisions of this Article IV or for the purpose of enforcing any
arbitration award made pursuant to Section 4.02.

                                    ARTICLE V

                            Miscellaneous Provisions

              Section 5.01. Cumulative Benefits. Except as provided in Section
2.04(b), the rights and benefits provided to any Participant under this Plan are
cumulative of, and are in addition to, all of the other rights and benefits
provided to such Participant under any Benefit Plan or any agreement between
such Participant and the Company.

              Section 5.02. No Mitigation. No Participant shall be required to
mitigate the amount of any payment provided for in this Plan by seeking or
accepting other employment following a termination of his or her employment with
the Company or otherwise. The amount of any payment provided for in this Plan
shall not be reduced by any compensation or benefit earned by a Participant as
the result of employment by another employer or by retirement benefits. The
Company's obligations to make payments to any Participant required under this
Plan shall not be affected by any set off, counterclaim, recoupment, defense or
other claim, right or action that the Company may have against such Participant.

              Section 5.03. Amendment and Termination. (a) The Board shall be
entitled to terminate this Plan at any time and for any reason; provided,
however, that in no event shall such termination become effective with respect
to any Participant prior to 90 days after notice of such termination is given to
such Participant.


                                      -12-
<PAGE>


              (b) The Board shall be entitled to amend this Plan at any time and
for any reason; provided, however, that no amendment that would effectively
reduce, alter, suspend or otherwise impair or prejudice the rights and benefits
(whether accrued or unaccrued) of any Participant in any material respect (a
"Material Amendment") shall become effective with respect to any Participant
prior to 90 days after notice of such amendment is given to such Participant.
For purposes of this paragraph (b), the termination of a Participant's
participation in this Plan in accordance with Section 2.01(c) shall not be
deemed to be an amendment of this Plan.

              (c) Notwithstanding the foregoing, no termination of this Plan and
no Material Amendment shall be effective with respect to, binding upon or reduce
any benefits payable hereunder to any person who at the time is a Participant if
such termination or Material Amendment is (i) directly or indirectly related to,
connected with, in anticipation of, in furtherance of, pursuant to the terms of
or during the pendency of any Change of Control or is for the purpose of
directly or indirectly encouraging or facilitating a Change of Control or (ii)
made on, after or within 180 days prior to the date of any Change of Control.

              (d) No termination or amendment of this Plan shall affect the
rights or benefits of any Participant or the obligations of the Company accrued
under this Plan as of the effective date of such termination or amendment or any
of the rights or benefits of such Participant or the obligations of the Company
accruing under this Plan after the effective date of such termination or
amendment on account of any Change of Control that occurred prior to such
effective date or within 180 days after such effective date. If any Participant
shall become entitled to benefits under this Plan during the term of this Plan,
then, notwithstanding the termination or amendment of this Plan, the benefits
payable hereunder to such Participant shall be paid in full.

              (e) In case of any dispute regarding whether or not any purported
termination or amendment of this Plan is permitted by, or satisfies any of the
requirements of, this Section 5.03, the burden of proof shall rest with the
Company.

              Section 5.04. Enforceability. The provisions of this Plan (a) are
for the benefit of, and may be enforced directly by, each Participant the same
as if the provisions of this Plan were set forth in their entirety in a written
instrument executed and delivered by the Company and such Participant and (b)
constitute a continuing offer to all present and future Participants. The
Company, by its adoption of this Plan, (i) acknowledges and agrees that each
present and future Participant has relied upon and will continue to rely upon
the provisions of this Plan in becoming, and serving as, an employee of the
Company, (ii) waives reliance upon, and all notices of acceptance of, this Plan
by the Participants and (iii) acknowledges and agrees that no present or future
Participant shall be prejudiced in his or her right to enforce directly the
provisions of this Plan in accordance with its terms by any act or failure to
act on the part of the Company.

              Section 5.05. Administration. (a) The Compensation Committee shall
have full and final authority to make determinations with respect to the
administration of this Plan, to construe and interpret its provisions and to
take all other actions deemed necessary or advisable for the proper
administration of this Plan, but such authority shall be subject to the
provisions of this


                                      -13-
<PAGE>


Plan. No discretionary action by the Compensation Committee shall amend or
supersede the express provisions of this Plan.

              (b) The members of the Compensation Committee shall receive no
additional compensation for their services relating to this Plan. Any expenses
properly incurred by the Compensation Committee incident to this Plan, including
the cost of any bond required by applicable law, shall be paid by the Company.

              (c) The Company shall indemnify and hold harmless each member of
the Compensation Committee against and all expenses and liabilities arising out
of his or her administrative functions or fiduciary responsibilities, including
any expenses and liabilities that are caused by or result from an act or
omission of such member acting in good faith in the performance of such
functions or responsibilities. Expenses against which such member shall be
indemnified hereunder shall include the amounts of any settlement or judgment,
costs, counsel fees and related charges reasonably incurred in connection with a
claim asserted or a proceeding brought or settlement thereof.

              Section 5.06. Release of Claims. As a condition to receipt of the
benefits under this Plan, a Participant will be required to sign an agreement,
to be prepared by the Company, in which he or she releases the Company and its
successors, assigns, divisions, subsidiaries, representatives, agents, officers,
directors, stockholders and employees from any claims, demands and causes of
action relating to or arising out of the termination of his or her employment
with the Company, including any statutory claims under the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of 1990, the Civil
Rights Acts of 1964 and 1991 and the Texas Commission on Human Rights Act.

              Section 5.07. Assignability. The Company shall have the right to
assign this Plan and to delegate its duties and obligations hereunder; provided,
however, that no such assignment or delegation shall relieve or discharge the
Company of or from any of its obligations under this Plan. Unless otherwise
approved by the Compensation Committee, no Participant shall transfer or assign
any of his or her rights under this Plan except by will or the laws of descent
and distribution.

              Section 5.08. Consolidations, Mergers, Etc. The Company will
require any person, firm or entity which becomes its Successor to expressly
assume and agree to perform this Plan in writing, in the same manner and to the
same extent that the Company would be required to perform hereunder if no such
succession had taken place.

              Section 5.09. Successors and Assigns. This Plan shall be binding
upon and inure to the benefit of the Company and its successors and assigns.
This Plan and all rights of each Participant shall inure to the benefit of and
be enforceable by such Participant and his or her personal or legal
representatives, executors, administrators, heirs and permitted assigns. If any
Participant should die while any amounts are due and payable to such Participant
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to such Participant's devisees, legatees
or other designees or, if there be no such devisees, legatees or other
designees, to such Participant's estate.


                                      -14-
<PAGE>


              Section 5.10. Notices. All notices and other communications
provided for in this Plan shall be in writing and shall be sent, delivered or
mailed, addressed as follows: (a) if to the Company or any Subsidiary, at the
Company's principal office address or such other address as the Company may have
designated by written notice to all Participants for purposes hereof, directed
to the attention of the General Counsel, and (b) if to any Participant, at his
or her residence address on the records of the Company or to such other address
as he or she may have designated to the Company in writing for purposes hereof.
Each such notice or other communication shall be deemed to have been duly given
or mailed by United States registered mail, return receipt requested, postage
prepaid, except that any change of notice address shall be effective only upon
receipt.

              Section 5.11. Tax Withholdings. The Company shall have the right
to deduct from any payment hereunder all taxes (federal, state or other) that it
is required to withhold therefrom.

              Section 5.12. No Employment Rights Conferred. Nothing contained in
this Plan shall (a) confer upon any Participant any right with respect to
continuation of employment with the Company or (b) subject to the rights and
benefits of any Participant hereunder, interfere in any way with the right of
the Company to terminate such Participant's employment at any time.

              Section 5.13. Governing Law. This Plan shall be governed in
accordance with the laws of the State of Texas and applicable federal law.

              IN WITNESS WHEREOF, and as conclusive evidence of the adoption of
this Plan by the Board, the Company has caused this Plan to be duly executed in
its name and behalf by its proper officer thereunto duly authorized as of the
Effective Date.

                                       STERLING CHEMICALS, INC.



                                       By:
                                           -------------------------------------
                                       Printed Name:
                                                     ---------------------------
                                       Title:
                                              ----------------------------------


                                      -15-
<PAGE>


                                    EXHIBIT A

                            STERLING CHEMICALS, INC.

                            Instrument of Designation

              THIS INSTRUMENT OF DESIGNATION is intended to evidence the
designation by the Compensation Committee of the Board of Directors of Sterling
Chemicals, Inc., a Delaware corporation (the "Corporation"), of the undersigned
employee as a "Participant" within the meaning of that certain Fourth Amended
and Restated Key Employee Protection Plan of the Corporation, with an Applicable
Multiplier (as defined therein) of _____________.

              IN WITNESS WHEREOF, the Corporation has caused its duly authorized
officer to execute this Instrument of Designation effective as of the date set
forth below.

Dated:                                   STERLING CHEMICALS, INC.
       -------------------


                                         By:
                                             -----------------------------------
                                         Printed Name:
                                                       -------------------------
                                         Title:
                                               ---------------------------------


EMPLOYEE:



---------------------------------------
Printed Name:
             --------------------------


                                      A-i
<PAGE>



                                    EXHIBIT B

                      Participants as of the Effective Date

<Table>
<Caption>
                  Name                           Applicable Multiplier
<S>                                              <C>
       Richard K. Crump                                   2.75
       Paul G. Vanderhoven                                2.00
       Kenneth M. Hale                                    2.00
       John Beaver                                        1.00
       Eugene Kenyon                                      2.00
       Wayne R. Parker                                    2.00
       John S. Land                                       1.00
       Paul C. Rostek                                     1.00
       Robert W. Fransham                                 1.00
       Daniel R. Withers                                  1.00
       Walter B. Treybig                                  2.00
</Table>


                                      B-i