(vi) the conviction of such Participant for a felony offense; or     (vii) any willful conduct on the part of such Participant that prejudices, in anymaterial respect, the reputation of the Corporation in the fields of business in whichit is engaged or with the investment community or the public at large, but only if suchParticipant knew, or should have known, that such conduct could have such result.     “*Change in Control*” means the occurrence of one of the following events:     (i) the acquisition by any individual, entity or group (within the meaning ofSection 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the“*Exchange Act*”)) (a “*Person*”), other than Resurgence Asset Management,L.L.C. and/or any of its or its affiliated managed funds or accounts(“*Resurgence*”), of the Corporation’s securities if, immediately thereafter, suchPerson is the beneficial owner (within the meaning of Rule 13d-3 promulgated under theExchange Act) of 50% or more of the combined voting power of the then-outstanding votingsecurities of the Corporation entitled to vote generally in the election of directors(the “*Outstanding Corporation Voting Securities*”); *provided*, *however*, that thefollowing acquisitions shall not constitute a Change of Control: (A) any acquisition byany employee benefit plan (or related trust) sponsored or maintained by the Corporationor any of its affiliates; or (B) any acquisition by any corporation pursuant to atransaction that complies with subclauses (iii)(A), (iii)(B) and (iii)(C) of thisdefinition;     (ii) the time at which individuals who, within any 12 month period, constitute theBoard (the “*Incumbent Board*”) cease for any reason to constitute at least amajority of the Board; *provided, however,*that any individual whose election, ornomination for election by the Corporation’s stockholders, was approved by a vote of atleast a majority of the directors then comprising the Incumbent Board shall beconsidered as though such individual were a member of the Incumbent Board, butexcluding, for this purpose, any such individual whose initial assumption of officeoccurs as a result of an actual or threatened contest with respect to the election orremoval of directors or other actual or threatened solicitation of proxies or consentsby or on behalf of a Person other than the Board;     (iii) consummation of a reorganization, merger, statutory share exchange orconsolidation or similar corporate transaction involving the Corporation or any of itssubsidiaries, a disposition of assets by the Corporation or the acquisition of assets orstock of another entity by the Corporation or any of its subsidiaries (each, a“*Business Combination*”), in each case unless, following such BusinessCombination, (A) all or substantially all of the individuals and entities that were thebeneficial owners of the Outstanding Corporation Voting Securities immediately prior tosuch Business Combination beneficially own, directly or indirectly, more than 50% of thethen-outstanding voting securities entitled to vote generally in the election ofdirectors of the corporation resulting from such Business Combination (including acorporation that, as a result of such transaction, owns the Corporation or has purchasedthe
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Corporation’s assets in a disposition of assets either directly or through one or moresubsidiaries) in substantially the same proportions as their ownership immediately priorto such Business Combination of the Outstanding Corporation Voting Securities, (B) noPerson (excluding Resurgence or any employee benefit plan (or related trust) of theCorporation or such corporation resulting from such Business Combination) beneficiallyowns, directly or indirectly, 50% or more of the combined voting power of thethen-outstanding voting securities of such corporation, except to the extent that suchownership existed prior to the Business Combination, and (C) at least a majority of themembers of the board of directors of the corporation resulting from such BusinessCombination were members of the Incumbent Board at the time of the execution of theinitial agreement or of the action of the Board providing for such Business Combination;or     (iv) approval by the stockholders or other relevant stakeholders of the Corporationof a complete liquidation or dissolution of the Corporation.     “*Code*” means the Internal Revenue Code of 1986, as amended from time to time,including regulations thereunder and successor provisions thereto.     “*Committee*” means a committee composed of at least two members of the Board whoqualify as “outside directors” within the meaning of Section 162(m) of the Code.     “*Corporation*” means Sterling Chemicals, Inc., a Delaware corporation, and anyentity that succeeds to all or substantially all of its business.     “*Disability*” means, with respect to any Participant, either (i) such Participantis unable to engage in any substantial gainful activity by reason of any medicallydeterminable physical or mental impairment that can be expected to result in death or can beexpected to last for a continuous period of not less than 12 months, or (ii) such Participantis, by reason of any medically determinable physical or mental impairment that can be expectedto result in death or can be expected to last for a continuous period of not less than 12months, receiving income replacement benefits for a period of not less than three months underan accident and health plan covering employees of the service provider’s employer.     “*Effective Date*” means August 7, 2009.     “*Eligible Employee*” means the Chief Executive Officer, the President and eachSenior Vice President of the Corporation and other key employees of the Corporation or any ofits subsidiaries selected by the Committee.     “*GAAP*” means accounting principles generally accepted in the United States.     “*Good Reason*” means, with respect to any Participant, the occurrence, and afailure by the Corporation to cure within 30 days after receiving notice (which notice must bewithin 30 days of such occurrence), of any of the following:
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     (i) a material and adverse change in such Participant’s reporting responsibilities,titles or elected or appointed offices as in effect immediately prior to the effectivedate of such change, including any change caused by the removal of such Participantfrom, or the failure to re-elect such Participant to, any material corporate office ofthe Corporation held by such Participant immediately prior to such effective date butexcluding any such change that occurs in connection with such Participant’s death,disability or retirement;     (ii) the assignment to such Participant of duties or responsibilities that arematerially inconsistent with such Participant’s status, positions, duties,responsibilities and functions with the Corporation immediately prior to the effectivedate of such assignment;     (iii) a material reduction by the Corporation in such Participant’s basecompensation and bonus opportunity in effect immediately prior to the effective date ofsuch reduction;     (iv) the failure of the Corporation to maintain employee benefit plans, programs,arrangements and practices entitling such Participant to benefits that, in theaggregate, are at least as favorable to such Participant as those available to suchParticipant under the benefit plans in which he or she was a participant immediatelyprior to the effective date of such failure: *provided, however*, that the amendment,modification or discontinuance of any or all such employee benefit plans, programs,arrangements or practices by the Corporation shall not constitute “Good Reason”hereunder if such amendment, modification or discontinuance applies generally to theCorporation’s salaried work force and does not single out such Participant for disparatetreatment; or     (v) any change of more than 75 miles (or, in the case of any Participant for whomthe Compensation Committee has approved a shorter distance, such shorter distance) inthe location of the principal place of employment of such Participant immediately priorto the effective date of such change.     “*Participant*” means an Eligible Employee designated by the Committee toparticipate in this Plan for a designated Performance Period.     “*Performance Goals*” means or may be expressed in terms of any of the followingbusiness criteria: revenue, earnings before interest, taxes, depreciation and amortization(“*EBITDA*”), free cash flow, funds from operations, funds from operations per share,operating income (loss), pre or after tax income (loss), cash available for distribution, cashavailable for distribution per share, cash and/or cash equivalents available for operations,net earnings (loss), earnings (loss) per share, return on equity, return on assets, shareprice performance, improvements in the Corporation’s attainment of expense levels,implementing or completion of critical projects, including, without limitation,
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implementation of strategic plan(s), improvement in investor relations, marketing andmanufacturing of key products, improvement in cash-flow (before or after tax), development ofcritical projects or product development, or progress relating to research and development. APerformance Goal may be measured over a Performance Period on a periodic, annual, cumulativeor average basis and may be established on a corporate-wide basis or established with respectto one or more operating units, divisions, subsidiaries, acquired businesses, minorityinvestments, partnerships or joint ventures. Unless otherwise determined by the Committee byno later than the earlier of the date that is ninety days after the commencement of thePerformance Period or the day prior to the date on which 25% of the Performance Period haselapsed, the Performance Goals will be determined by not accounting for a change in GAAPduring a Performance Period.     “*Performance Objective*” means the level or levels of performance required to beattained with respect to specified Performance Goals in order that a Participant shall becomeentitled to specified rights in connection with an Award.     “*Performance Period*” means one or more periods of time, as the Committee mayselect, over which the attainment of one or more Performance Goals will be measured for thepurpose of determining a Participant’s right to, and the payment of, an Award.     “*Plan*” means this Long-Term Incentive Plan, as amended from time to time.     3. Administration. (a) Authority. This Plan shall be administered by theCommittee. The Committee is authorized, subject to the provisions of this Plan, in its solediscretion, from time to time to (i) select Participants, (ii) grant Awards under this Plan, (iii)determine the type, terms and conditions of, and all other matters relating to, Awards, (iv)prescribe Award agreements (which need not be identical) or otherwise communicate the terms ofAwards, (v) establish, modify or rescind such rules and regulations as it deems necessary for theproper administration of this Plan and (vi) make such determinations and interpretations and totake such steps in connection with this Plan or the Awards granted thereunder as it deems necessaryor advisable. All such actions by the Committee under this Plan or with respect to the Awardsgranted thereunder shall be final and binding on all persons.     (b) Manner of Exercise of Committee Authority. The Committee may delegate itsresponsibility with respect to the administration of this Plan to one or more officers of theCorporation, to one or more members of the Committee or to one or more members of the Board;*provided, however*, that the Committee may not delegate its responsibility (i) to make Awards toexecutive officers of the Corporation, (ii) to make Awards that are intended to constitute“qualified performance-based compensation” under Section 162(m) of the Code or (iii) to certify thesatisfaction of Performance Objectives pursuant to Section 5(g) in accordance with Section 162(m)of the Code. The Committee may also appoint agents to assist in the day-to-day administration ofthis Plan and may delegate the authority to execute documents under this Plan to one or moremembers of the Committee or to one or more officers of the Corporation.
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     (c) Limitation of Liability. The Committee may appoint agents to assist it inadministering this Plan. The Committee and each member thereof shall be entitled to, in goodfaith, rely or act upon any report or other information furnished to him or her by any officer oremployee of the Corporation, the Corporation’s independent certified public accountants,consultants or any other agent assisting in the administration of this Plan. Members of theCommittee and any officer or employee of the Corporation acting at the direction or on behalf ofthe Committee shall not be personally liable for any action or determination taken or made in goodfaith with respect to this Plan, and shall, to the extent permitted by law, be fully indemnifiedand protected by the Corporation with respect to any such action or determination.     4. Types of Awards. Subject to the provisions of this Plan, the Committee has thediscretion to grant Awards described in Section 5 to Participants.     5. Awards. (a) Form of Award. The Committee is authorized to grant Awardspursuant to this Section 5. An Award shall represent the conditional right of the Participant toreceive cash or other property based upon achievement of one or more pre-established PerformanceObjectives during a Performance Period, subject to the terms of this Section 5 and the otherapplicable terms of this Plan. Awards shall be subject to such conditions as shall be specified bythe Committee. Awards may be granted as cash awards, units or other property as the Committee maydetermine.     (b) Performance Objectives. The Committee shall establish the PerformanceObjective(s) for each Award, consisting of one or more Performance Goals, and the amount or amountspayable or other rights that the Participant will be entitled to upon achievement of suchPerformance Objective(s). The Performance Objective(s) shall be established by the Committee priorto, or reasonably promptly following the inception of, a Performance Period but, to the extentrequired by Section 162(m) of the Code, by no later than the earlier of the date that is 90 daysafter the commencement of the Performance Period or the day prior to the date on which 25% of thePerformance Period has elapsed (or, if longer or shorter, within the maximum period allowed underSection 162(m) of the Code).     (c) Additional Provisions Applicable to Awards. A Performance Objective mayincorporate one or more Performance Goals, in which case achievement with respect to eachPerformance Goal may be assessed individually or in combination with each other. The Committeemay, in connection with establishing Performance Objectives for a Performance Period, establish amatrix setting forth the relationship between performance on two or more Performance Goals and theamount of the Award payable for that Performance Period. The Performance Objectives with respectto a Performance Goal may be established as absolute terms, as relative to performance in priorperiods, as compared to the performance of one or more comparable companies or an index coveringmultiple companies, or as otherwise determined by the Committee. Performance Objectives shall beobjective and shall otherwise meet the requirements of Section 162(m) of the Code. PerformanceObjectives may differ for Awards granted to any one Participant or to different Participants.
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     (d) Duration of the Performance Period. The Committee shall establish the duration ofeach Performance Period at the time that it sets the Performance Objectives applicable to thatPerformance Period. The Committee shall be authorized to permit overlapping or consecutivePerformance Periods.     (e) Adjustment. To the extent necessary to preserve the intended economic effects ofthis Plan to the Corporation and the Participants, the Committee shall adjust PerformanceObjectives, the Awards or both to take into account (i) a change in corporate capitalization, (ii)a corporate transaction, such as any merger of the Corporation or any subsidiary into anothercorporation, any consolidation of the Corporation or any subsidiary into another corporation, anyseparation of the Corporation or any subsidiary (including a spinoff or the distribution of stockor property of the Corporation or any subsidiary), any reorganization of the Corporation or anysubsidiary or a large, special and non-recurring dividend paid or distributed by the Corporation(whether or not such reorganization comes within the definition of Section 368 of the Code), (iii)any partial or complete liquidation of the Corporation or any subsidiary or (iv) a change inaccounting or other relevant rules or regulations (any adjustment pursuant to this clause (iv)shall be subject to the timing requirements of the last sentence of Section 5(b) of this Plan);*provided, however*, that no adjustment hereunder shall be authorized or made if and to the extentthat the Committee determines that such authority or the making of such adjustment would cause theAwards to fail to qualify as “qualified performance-based compensation” under Section 162(m) of theCode.     (f) Maximum Amount Payable Per Participant Under This Section 5. With respect toAwards to be settled in cash or property, a Participant shall not be granted Awards for all of thePerformance Periods commencing in a calendar year that permit such Participant in the aggregate toearn a cash payment or payment in other property, in excess of $5,000,000.     (g) Payment of Performance Compensation Awards.     (i) Condition to Receipt of Payment. Except as otherwise provided at the time ofgrant, a Participant must be employed by the Corporation on the last day of a PerformancePeriod to be eligible for payment in respect of an Award for such Performance Period.      (ii) Limitation. Except as otherwise provided at the time of grant, aParticipant shall be eligible to receive payment in respect of an Award only to the extentthat the threshold level of the Performance Objectives for such Performance Period areachieved.     (iii) Certification. Following the completion of a Performance Period, theCommittee shall review and certify in writing whether, and to what extent, the PerformanceObjectives for the Performance Period have been achieved and, if so, calculate and certify inwriting that amount of the Awards earned for such Performance Period. The Committee shallthen determine the amount of each Participant’s Award actually payable for the PerformancePeriod.     (iv) Timing of Award Payments. Except as otherwise provided at the time ofgrant, Awards granted for a Performance Period shall be paid to Participants as soon as
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administratively practicable, but in no event later than 15 days following completion of thecertifications required by this Section 5; which certification and payment will occur no laterthan February 27 of the calendar year immediately following the last day of the relevantPerformance Period.     (v) Change In Control. In the event of a Change in Control, any incompletePerformance Periods applicable to Awards under this Section 5 in effect on the date the Changein Control occurs shall end on the date of such change, and the Committee shall pay eachParticipant an Award as provided for at the time of grant. Notwithstanding Section 5(e), inthe event of a Change in Control, the Committee shall not be authorized to reduce or eliminatethe Award. Any resulting amount hereunder due to a Participant shall be paid in a cash lumpsum no later than 15 days after the relevant Change in Control.     (vi) Death/Disability of the Participant. In the event of the death orDisability of a Participant, any incomplete Performance Period applicable to such Participantin effect on the date of his or her death or Disability shall end on the date of such death orDisability, and the Committee shall pay each Participant an Award as provided for at the timeof grant.     6. General Provisions. (a) Termination of Employment. Except as otherwiseprovided at the time of grant, in the event a Participant’s employment terminates for any reasonprior to the end of a Performance Period, he or she (or his or her beneficiary, in the case ofdeath) shall not be entitled to receive any Award for such Performance Period unless the Committee,in its sole and absolute discretion, elects to pay an Award to such Participant.     (b) Death of the Participant. Subject to Section 6(a), in the event of the death of aParticipant, any payments hereunder due to such Participant shall be paid to his or her beneficiaryas designated in writing to the Committee or, failing such designation, to his or her estate. Nobeneficiary designation shall be effective unless it is in writing and received by the Committeeprior to the date of death of the Participant.     (c) Taxes. The Corporation is authorized to withhold from any Award granted, anypayment relating to an Award under this Plan, or any payroll or other payment to a Participant,amounts of withholding and other taxes due in connection with any transaction involving an Award,and to take such other action as the Committee may deem advisable to enable the Corporation andParticipants to satisfy obligations for the payment of withholding taxes and other tax obligationsrelating to any Award. This authority shall include authority for the Corporation to withhold orreceive other property and to make cash payments in respect thereof in satisfaction of aParticipant’s tax obligations, either on a mandatory or elective basis in the discretion of theCommittee.     (d) Limitations on Rights Conferred under Plan and Beneficiaries. Neither status as aParticipant nor receipt or completion of a deferral election form shall be construed as acommitment that any Award will become payable under this Plan. Nothing contained in this Plan orin any documents related to this Plan or to any Award shall confer upon any Eligible Employee orParticipant any right to continue as an Eligible Employee or Participant for any
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future Performance Period or in the employ of the Corporation or constitute any contract oragreement of employment, or interfere in any way with the right of the Corporation to reduce suchperson’s compensation, to change the position held by such person or to terminate the employment ofsuch Eligible Employee or Participant, with or without cause, but nothing contained in this Plan orany document related thereto shall affect any other contractual right of any Eligible Employee orParticipant. No benefit payable under, or interest in, this Plan shall be transferable by aParticipant except by will or the laws of descent and distribution or otherwise be subject in anymanner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge.     (e) Changes to this Plan and Awards. Notwithstanding anything herein to the contrary,the Board, or a committee designated by the Board, may, at any time, terminate or, from time totime, amend, modify or suspend this Plan; *provided, however*, that no termination or amendment ormodification of this Plan shall affect the rights or benefits of any Participant or the obligationsof the Corporation under this Plan under any Awards made prior to the effective date of suchtermination or amendment or modification. No Award may be granted during any suspension of thisPlan or after its termination. Any such amendment may be made without stockholder approval.     (f) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitutean “unfunded” plan for incentive and deferred compensation. With respect to any amounts payable toa Participant pursuant to an Award, nothing contained in this Plan (or in any documents relatedthereto), nor the creation or adoption of this Plan, the grant of any Award, or the taking of anyother action pursuant to this Plan shall give any such Participant any rights that are greater thanthose of a general creditor of the Corporation; *provided*, *however*, that the Committee may authorizethe creation of trusts and deposit therein cash or other property or make other arrangements, tomeet the Corporation’s obligations under this Plan. Such trusts or other arrangements shall beconsistent with the “unfunded” status of this Plan unless the Committee otherwise determines withthe consent of each affected Participant. The trustee of such trusts may be authorized to disposeof trust assets and reinvest the proceeds in alternative investments, subject to such terms andconditions as the Committee may specify in accordance with applicable law.     (g) Non-Exclusivity of this Plan. Neither the adoption of this Plan by the Board (ora committee designated by the Board) nor submission of this Plan or provisions thereof to thestockholders of the Corporation for approval shall be construed as creating any limitations on thepower of the Board to adopt such other incentive arrangements as it may deem necessary.     (h) Governing Law. The validity, construction, and effect of this Plan, any rules andregulations relating to this Plan, and any Award shall be determined in accordance with the laws ofthe State of Delaware, without giving effect to principles of conflicts of laws, and applicableFederal law.     (i) Exemption Under Section 162(m) of the Code. The Plan, and all Awards issuedthereunder, are intended to be exempt from the application of Section 162(m) of the Code, which
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restricts under certain circumstances the Federal income tax deduction for compensation paid by apublic corporation to named executives in excess of $1 million per year. The Committee may,without stockholder approval, amend this Plan retroactively or prospectively to the extent itdetermines necessary in order to comply with any subsequent clarification of Section 162(m) of theCode required to preserve the Corporation’s Federal income tax deduction for compensation paidpursuant to this Plan.     (j) Effective Date. The Plan is effective on the Effective Date and shall remain ineffect until it has been terminated pursuant to Section 6(e).     (k) ERISA. The Plan is not intended and shall not be construed to be a retirement,welfare or other employee benefit plan and shall not be governed by the Employee Retirement IncomeSecurity Act of 1974, as amended.     (l) Headings. The titles and headings of the sections in this Plan are forconvenience of reference only, and in the event of any conflict, the text of this Plan, rather thansuch titles or headings shall control.
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