**Exhibit**10.2**Sterling Chemicals, Inc.****Fifth Amended and Restated Key Employee Protection Plan**Preliminary Statements A. The Board (as defined below) of Sterling Chemicals, Inc., a Delaware corporation,has previously adopted that certain Fourth Amended and Restated Key Employee ProtectionPlan (the “*Existing Plan*”).  B. The Board desires to amend the Existing Plan in certain respects and to restate theExisting Plan as so amended in its entirety.          Now, Therefore, the Existing Plan is hereby amended and restated, effective as of theEffective Date (as defined below), to read in its entirety as follows:Article IDefinitions and Interpretations          Section 1.01. Definitions. Capitalized terms used in this Plan shall have thefollowing respective meanings, except as otherwise provided or as the context shall otherwiserequire:     “*Annual Compensation*” means, as of the Date of Computation with respect to anyParticipant, the sum of (a) the highest annual base salary of such Participant in effect atany 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 ofComputation.     “*Applicable Multiplier*” means (a) with respect to any Existing Participant, thenumber set forth opposite such Existing Participant’s name on Exhibit B attached hereto underthe heading “Applicable Multiplier” and (b) with respect to any other Participant, themultiplier specified in the Instrument of Designation executed and delivered by the Companyand such Participant in accordance with Section 2.01(b); *provided, however*, that in no eventshall the Applicable Multiplier of any Participant be less than 0.50 (except as provided inSection 2.03) or greater than 3.00.     “*Benefit Plan*” means any employee benefit plan (including any employee benefitplan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of1974), program, arrangement or practice maintained, sponsored or provided by the Company orany Subsidiary, including those relating to bonuses, incentive compensation, retirementbenefits, stock options, stock ownership or stock awards, healthcare or medical
 

 
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 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 affiliates’ managed funds or accounts(“*Resurgence*”), of Company securities if, immediately thereafter, such Person isthe beneficial owner (within the meaning of Rule 13d-3 promulgated under the ExchangeAct) of 50% or more of the combined voting power of the then-outstanding votingsecurities of the Company entitled to vote generally in the election of directors (the“*Outstanding Company Voting Securities*”); *provided, however,*that the followingacquisitions shall not constitute a Change of Control: (A) any acquisition by anyemployee benefit plan (or related trust) sponsored or maintained by the Company or anyof its affiliates; or (B) any acquisition by any corporation pursuant to a transactionthat complies with subclauses (c)(i), (c)(ii) and (c)(iii) of this definition;     (b) 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 Company’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;     (c) consummation of a reorganization, merger, statutory share exchange orconsolidation or similar corporate transaction involving the Company or any of itssubsidiaries, a disposition of assets by the Company or the acquisition of assets orstock of another entity by the Company or any of its subsidiaries (each, a “*BusinessCombination*”), in each case unless, following such Business Combination, (i) all orsubstantially all of the individuals and entities that were the beneficial owners of theOutstanding Company Voting Securities immediately prior to such Business Combinationbeneficially own, directly or indirectly, more than 50% of the then-outstanding votingsecurities entitled to vote generally in the election of directors of the corporationresulting from such Business Combination (including a corporation that, as a result ofsuch transaction, owns the Company or has purchased the Company’s assets in adisposition of assets either directly or through one or more subsidiaries) insubstantially the same proportions as their ownership immediately prior to such BusinessCombination of the Outstanding Company Voting Securities,
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(ii) no Person (excluding Resurgence or any employee benefit plan (or related trust) ofthe Company 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 (iii) at least a majority ofthe members 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     (d) approval by the stockholders or other relevant stakeholders of the Company of acomplete liquidation or dissolution of the Company.     “*Code*” means the Internal Revenue Code of 1986, as amended. Reference in thisPlan to any section of the Code shall be deemed to include any amendments or successorprovisions 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 occursthat results in a Participant terminating his or her employment for Good Reason and (b) theactual date of such Participant’s termination by the Company for any reason other thanMisconduct or Disability.     “*Disability*” means, with respect to any Participant, a physical or mentalcondition of such Participant that, in the opinion of a licensed physician reasonablyacceptable 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 anemployee of the Company , (b) has continued for at least 180 days during any periodof 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 EffectiveDate, 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 followingactions or failures to act:
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 (i) if (but only if) such Participant has an Applicable Multiplier of 2.00or higher, a material change in such Participant’s reporting responsibilities,titles or elected or appointed offices as in effect immediately prior to theeffective date of such change, including any change caused by the removal of suchParticipant from, or the failure to re-elect such Participant to, any materialcorporate office of the Company held by such Participant immediately prior to sucheffective date but excluding any such change that occurs in connection with suchParticipant’s death, disability or retirement;  (ii) if (but only if) such Participant has an Applicable Multiplier of 2.00or higher, the assignment to such Participant of duties and/orresponsibilities that are materially inconsistent with such Participant’s status,positions, duties, responsibilities and functions with the Company immediatelyprior to the effective date of such assignment;  (iii) a material reduction by the Company in such Participant’s totalcompensation 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 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 Company shall not constitute “Good Reason”hereunder if such amendment, modification or discontinuance applies generally to theCompany’s salaried work force and does not single out such Participant for disparatetreatment;  (v) any change of more than 75 miles (or, in the case of any Participantfor whom the Compensation Committee has approved a shorter distance, such shorterdistance) in the location of the principal place of employment of such Participantimmediately prior to the effective date of such change;  (vi) any purported termination of such Participant’s employment for Misconductor Disability not in accordance with the provisions of Section 3.02; or  (vii) any purported termination of such Participant’s participation in this Plannot 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 andinadvertent action not taken in bad faith by the Company and if it is remedied by the Companypromptly after receipt of notice thereof given by such Participant. For purposes of thisdefinition, any action or failure to act described in clauses (i) through (viii) above shallcease 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. Inthe event of any dispute between the Company, on the one hand, and any Participant, on theother hand, with respect to the amount of total compensation of such Participant for purposesof clause (iii) above or the aggregate value or level of any of such Participant’s benefitsfor purposes of clause (iv) above, the Company and such Participant shall use their bestefforts to resolve such dispute themselves. If they are unable to resolve the dispute within15 business days, Deloitte & Touche L.L.P., or such other nationally recognized accountingfirm or employee benefits firm acceptable to the Company and such Participant, shall beengaged by the Company to make its own determination with respect to the dispute and thedetermination by such firm shall be final and binding on the Company (including theCompensation Committee) and such Participant. If any firm is engaged with respect to anydispute as aforesaid, (A) such firm shall be instructed to make its determination as soon aspracticable and to use such materiality standard as such firm may determine to be reasonableunder the circumstances and (B) the disputants shall provide such firm with all books, recordsand other information relevant to such dispute as such firm may reasonably request. No firmengaged as aforesaid shall be liable or responsible to the Company (including the CompensationCommittee) 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 grossmisconduct which are demonstrably injurious to the Company (monetarily orotherwise) in any material respect;  (b) the failure of such Participant to observe and comply in all materialrespects 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 otherlawful published policy of the Company, but, in the case of any such failure thatis capable of being remedied, only if such failure shall have continued unremediedfor more than 30 days after written notice thereof is given to such Participant bythe Company;  (d) the willful failure of such Participant to observe and comply with alllawful and ethical directions and instructions of the Board or the Chief ExecutiveOfficer of the Company;  (e) the refusal or willful failure of such Participant to perform, in anymaterial respect, his or her duties with the Company, but only if such failure wasnot 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 theCompany; (f) the conviction of such Participant for a felony offense; or  (g) any willful conduct on the part of such Participant that prejudices, inany material respect, the reputation of the Company in the fields of business inwhich it is engaged or with the investment community or the public at large, butonly if such Participant knew, or should have known, that such conduct could havesuch result.For purposes of clauses (d), (e) and (g) above, no act or failure to act on the part of anyParticipant shall be considered “willful” if such act or failure to act was done or omitted tobe done by such Participant in good faith and with the reasonable belief that suchParticipant’s action or omission was in the best interest of the Company. In case of anydispute regarding whether or not any conduct by a Participant meets any of the standards setforth 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), theExisting Participants and those employees of the Company or any Subsidiary who are from timeto time designated by the Compensation Committee as Participants in accordance with Section2.01(b).     “*Plan*” means this Fourth Amended and Restated Key Employee Protection Plan, asamended, supplemented or modified from time to time in accordance with its terms.     “*Protection Period*” means (a) with respect to any Participant having anApplicable Multiplier that is greater than or equal to 1.5, the period commencing 180 daysprior to the date on which the relevant Change of Control occurs and ending two years afterthe date on which such Change of Control occurs, and (b) with respect to any Participanthaving an Applicable Multiplier that is less than 1.5, the period commencing 180 days prior tothe date on which the relevant Change of Control occurs and ending 18 months after the date onwhich 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 orother 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 bymultiplying (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 bonusplan for salaried employees.     “*Termination Date*” means, with respect to any Participant, the termination datespecified in the Termination Notice delivered by such Participant to the Company in accordancewith Section 3.01 or the actual date of termination of such Participant’s employment by theCompany for any reason other than Misconduct or Disability, as applicable.     “*Termination Notice*” means, as appropriate, (a) a notice from a Participant tothe Company purporting to terminate such Participant’s employment for Good Reason inaccordance with Section 3.01 or (b) a notice from the Company to a Participant purporting toterminate such Participant’s employment for Misconduct or Disability in accordance withSection 3.02.     “*Triggering Payment*” has the meaning specified in Section 2.05.          Section 1.02. Interpretation. In this Plan, unless a clear contrary intentionappears, (a) the words “*herein*,” “*hereof*” and “*hereunder*” and other words of similar import referto 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 thegenerality of any description preceding such term. The Article and Section headings herein are forconvenience only and shall not affect the construction hereof.Article IIEligibility and Benefits          Section 2.01. Eligible Employees. (a) This Plan is only for the benefit ofParticipants, and no other employees or personnel shall be eligible to participate in this Plan orto receive any rights or benefits hereunder.          (b) In addition to the Existing Participants, the Compensation Committee shall be authorizedfrom time to time after the Effective Date to designate one or more employees of the Company asParticipants. Each such designation shall be evidenced by an Instrument of Designation signed bythe Company and such Participant substantially in the form of Exhibit A hereto. Each suchInstrument 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 Participantis no longer a key employee of the Company and thus should not continue to participate in thisPlan, the Compensation Committee shall be permitted, subject to the limitations set forth below, toterminate such Participant’s participation in this Plan on such date as shall be specified in awritten 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 tothis Section 2.01(c). Upon the effective date of such termination, such Participant shall cease tobe a Participant and, accordingly, such Participant shall no longer be entitled to receive anyrights or benefits hereunder; *provided, however,*that such termination shall not affect the rightsor benefits of such Participant or the obligations of the Company accrued under this Plan as of theeffective date of such termination or the rights or benefits of such Participant or the obligationsof the Company accruing under this Plan after the effective date of such termination on account ofany Change of Control that occurred on or before such effective date or that occurs within 180 daysafter such effective date. Notwithstanding the foregoing, the Compensation Committee shall not bepermitted to terminate any Participant’s participation in this Plan unless the sole reason thereforis that, in the good faith opinion of the Compensation Committee, such Participant has ceased to bea key employee of the Company and thus should not continue to participate in this Plan. Withoutlimitation of the foregoing, the Compensation Committee may not terminate any Participant’sparticipation in this Plan if such termination is directly or indirectly related to, connectedwith, in anticipation of, in furtherance of, pursuant to the terms of or during the pendency of anyChange of Control or is for the purpose of directly or indirectly encouraging or facilitating aChange of Control. In case of any dispute regarding whether or not any purported termination ofany Participant’s participation in this Plan is permitted by, or satisfies any of the requirementsof, this paragraph (c), the burden of proof shall rest with the Company.          Section 2.02. Description of Benefits Triggered by Termination During the ProtectionPeriod. (a) Each Participant shall be entitled to receive the benefits described below if aChange of Control occurs and if, during the Protection Period for such Participant, either suchParticipant terminates or has terminated his or her employment for Good Reason in accordance withSection 3.01 or the Company terminates or has terminated such Participant’s employment for anyreason 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 30days after such Participant’s Termination Date or, in the event that such Participant’sTermination Date occurred within the 180-day period immediately preceding the occurrence of aChange of Control, within 30 days after such Change of Control, a lump sum cash payment equalto the sum of (A) an amount (the “*Severance Amount*”) equal to (subject to Section2.04(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 TerminationDate under the Company’s vacation policy, *plus*(C) all accrued but unpaid compensation earnedby such Participant as of such Participant’s Termination Date, *plus*(D) all unpaid vestedbenefits earned or accrued by such Participant as of such Participant’s Termination Date underany Benefit Plan (other than a “qualified plan” within the meaning of section 401(a) of theCode) 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 bereduced by an amount equal to the aggregate amount previously paid to such Participant by theCompany as severance (including payments previously made by the Company pursuant to thisSection 2.02(a)(i) or Section 2.03) and (*y*) if a Participant becomes entitled to benefitsunder 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 tothe greater of (1) the amount which would have been payable to the Participant under theExisting Plan or (2) the amount which would be payable to such Participant pursuant to Section2.03, determined as if such Change of Control had not occurred.     (ii) for a period of 24 months (including 18 months of COBRA coverage) following suchParticipant’s Termination Date (including any period during which such Participant was coveredby such plans and programs pursuant to Section 2.03), such Participant shall continue to becovered by all life, health care, medical and dental insurance plans and programs (excludingdisability) of the Company by which he or she was covered on his or her Termination Datenotwithstanding any subsequent termination or amendment of any such plan or programs andnotwithstanding any eligibility provisions thereof to the contrary, *provided*that (A) suchParticipant 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 orby COBRA, as the case may be.          (b) No Participant shall be entitled to receive any of the benefits described in this Section2.02 on account of any Change of Control unless (i) such Change of Control occurred (A) while suchParticipant was employed by the Company or (B) within 180 days after such Participant’s TerminationDate and (ii) either such Participant terminates or has terminated his or her employment for GoodReason in accordance with Section 3.01 or the Company terminates or has terminated suchParticipant’s employment for any reason other than Misconduct or Disability in accordance withSection 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 Participantwho has an Applicable Multiplier of 2.00 or higher is entitled to receive a Severance Amountpursuant to Section 2.02(a), up to 50% of the Severance Amount paid to such Participant shall besubject to repayment by such Participant if, within one year after the date of termination of suchParticipant’s employment with the Company, such Participant owns, manages, operates or controls (orjoins in the ownership, management, operation or control of), or becomes employed by or connectedin any manner with, any business engaged in the manufacture or sale of styrene, acrylonitrile oracetic acid anywhere in the world (each, a “*Competitive Position*”). In the event that aParticipant is required to repay any portion of his or her Severance Amount pursuant to thisparagraph (c), such portion shall be determined by multiplying 50% of his or her Severance Amountby a fraction, the numerator of which is the number of days from the date such Participant beginsin such Competitive Position until the first anniversary of the date of termination of suchParticipant’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 2.03unless such Severance Amount is later increased due to the subsequent occurrence of a Change ofControl within the relevant Participant’s Protection Period to the Severance Amount determined byusing 100% of such Participant’s Applicable Multiplier.          Section 2.03. Description of Benefits Triggered by Termination Outside the ProtectionPeriod. If any Participant terminates his or her employment for Good Reason in accordance withSection 3.01 or the Company terminates such Participant’s employment for any
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reason other than Misconduct or Disability in accordance with Section 3.02, and such terminationdoes not occur within such Participant’s Protection Period, then such Participant shall be entitledto receive, and the Company shall be obligated to pay and provide, all the benefits described inSection 2.02 to the same extent as if a Change of Control had occurred on the date which is 60 daysprior to the relevant Termination Date; *provided, however*, that, for purposes of calculating theSeverance Amount payable to such Participant under this Section 2.03, the Applicable Multiplier ofsuch Participant shall be reduced by 50%. In the case of each termination of employment covered bythis Section 2.03, a Change of Control shall be deemed to have occurred on the date which is 60days prior to the relevant Termination Date and, accordingly, all other provisions of this Planshall 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 continuethe benefits described in Section 2.02(a)(ii) for any Participant shall cease if and when suchParticipant becomes employed, on a full-time basis, by a third party which provides suchParticipant with substantially similar benefits.          (b) Notwithstanding anything to the contrary contained in this Plan, the Severance Amountpayable to any Participant under this Plan shall be reduced by the aggregate amount of allseparation, 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) anyapplicable law, statute, rule, regulation, order or decree (or other pronouncement having theeffect of law) of any nation or governmental authority.          Section 2.05. Certain Additional Payments by the Company. Anything in this Plan tothe contrary notwithstanding, in the event it shall be determined that any payment or distributionto or for the benefit of any Participant under this Plan (“*Triggering Payment*”) would besubject to the excise tax imposed by Section 4999 of the Code or any interest or penalties withrespect to such excise tax (such excise tax, together with any such interest or penalties, beingcollectively referred to below as the “*Excise Tax*”), then such Participant shall beentitled to receive from the Company an additional payment (the “*Gross-Up Payment*”) in anamount equal to the lesser of (a) an amount such that after payment by such Participant of alltaxes (including any interest or penalties imposed with respect to such taxes) including any ExciseTax imposed on the Gross-Up Payment, such Participant retains an amount of the Gross-Up Paymentequal to the Excise Tax imposed upon the Triggering Payment, and (b) 25% of such Participant’sAnnual Compensation. If a Participant is entitled to a Gross-Up Payment under this Section 2.05,the Company shall pay the Participant his or her Gross-Up Payment on or before March 15 of thecalendar year immediately following the calendar year in which the Participant’s employment wasterminated. All determinations required to be made under this Section 2.05 with respect to aparticular Participant shall be made by the independent accounting firm then retained by theCompany in the ordinary course of business (which firm shall provide detailed supportingcalculations to the Company and such Participant) and such determination shall be final and bindingon the Company (including the Compensation Committee) and all Participants.
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          Section 2.06. Cost of Plan; Plan Unfunded; Participant’s Rights Unsecured. The entirecost of this Plan shall be borne by the Company, and no contributions shall be required of theParticipants. The Company shall not be required to establish any special or separate fund or makeany other segregation of funds or assets to assure the payment of any benefit hereunder. The rightof any Participant to receive the benefits provided for herein shall be an unsecured claim againstthe general assets of the Company.Article IIITermination Notices          Section 3.01. Termination Notices from Participants. For purposes of this Plan, inorder for any Participant to terminate his or her employment for Good Reason, such Participant mustgive a written notice of termination to the Company, which notice shall (a) be in writing andsigned by such Participant, (b) specify the termination date, (c) state that the termination is fora Good Reason and (d) set forth in reasonable detail the facts and circumstances claimed to providea basis for such Good Reason. Any Termination Notice given by a Participant that is not incompliance, in all material respects, with the foregoing requirements shall be invalid andineffective for purposes of this Plan. If the Company receives from any Participant a TerminationNotice that it believes is invalid and ineffective as aforesaid, it shall promptly notify suchParticipant of such belief and the reasons therefor.          Section 3.02. Termination Notices from Company. For purposes of this Plan, in orderfor the Company to terminate any Participant’s employment for Misconduct, the Company must give awritten notice of termination to such Participant, which notice shall (a) specify the terminationdate, (b) state that the termination is for Misconduct and (c) set forth in reasonable detail thefacts and circumstances claimed to provide a basis for such termination for Misconduct. Forpurposes of this Plan, in order for the Company to terminate any Participant’s employment forDisability, the Company must give a written notice of termination to such Participant, which noticeshall (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 suchtermination 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 forpurposes of this Plan. Any Termination Notice purported to be given by the Company to anyParticipant after the death or retirement of such Participant shall be invalid and ineffective.Article IVDispute Resolution          Section 4.01. Negotiation. Subject to Section 4.03, in case a dispute or controversyshall 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 itwishes to resolve such dispute or controversy by negotiations, in which event the disputants shallattempt
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in good faith to negotiate a resolution of such dispute or controversy. If the dispute orcontroversy 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 inSection 4.02. All negotiations pursuant to this Section 4.01 shall be held at the Company’sprincipal 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 andstate rules of evidence and procedure.          Section 4.02. Arbitration. Subject to Section 4.03, any dispute or controversyarising out of or relating to this Plan which has not been resolved by negotiations in accordancewith Section 4.01 within 30 days of the effective date of the Dispute Notice shall, upon thewritten request of either disputant, be finally settled by arbitration conducted expeditiously inaccordance with the labor arbitration rules of the American Arbitration Association. Thearbitrator shall be not empowered to award damages in excess of compensatory damages and eachdisputant 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 theirsuccessors and assigns. The fees and expenses of the arbitrator shall be borne solely by theprevailing disputant or, in the event there is no clear prevailing disputant, as the arbitratordeems appropriate. All arbitration conferences and hearings shall be held in Houston, Texas.          Section 4.03. Exclusivity, etc. The dispute resolution procedures set forth inSections 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 employeebenefits firm. No legal action may be brought with respect to this Plan except for the purpose ofspecifically enforcing the provisions of this Article IV or for the purpose of enforcing anyarbitration award made pursuant to Section 4.02.Article VMiscellaneous Provisions          Section 5.01. Cumulative Benefits. Except as provided in Section 2.04(b), the rightsand 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 anyagreement between such Participant and the Company.          Section 5.02. No Mitigation. No Participant shall be required to mitigate the amountof any payment provided for in this Plan by seeking or accepting other employment following atermination of his or her employment with the Company or otherwise. The amount of any paymentprovided for in this Plan shall not be reduced by any compensation or benefit earned by aParticipant as the result of employment by another employer or by retirement benefits. TheCompany’s obligations to make payments to any Participant required under this Plan shall not beaffected by any set off, counterclaim, recoupment, defense or other claim, right or action that theCompany may have against such Participant.
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          Section 5.03. Amendment and Termination. (a) The Board shall be entitled to terminatethis Plan at any time and for any reason; *provided, however*, that in no event shall suchtermination become effective with respect to any Participant prior to 90 days after notice of suchtermination is given to such Participant.          (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 orprejudice the rights and benefits (whether accrued or unaccrued) of any Participant in any materialrespect (a “*Material Amendment*”) shall become effective with respect to any Participantprior to 90 days after notice of such amendment is given to such Participant. For purposes of thisparagraph (b), the termination of a Participant’s participation in this Plan in accordance withSection 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 shallbe effective with respect to, binding upon or reduce any benefits payable hereunder to any personwho at the time is a Participant if such termination or Material Amendment is (i) directly orindirectly related to, connected with, in anticipation of, in furtherance of, pursuant to the termsof or during the pendency of any Change of Control or is for the purpose of directly or indirectlyencouraging or facilitating a Change of Control or (ii) made on, after or within 180 days prior tothe date of any Change of Control.          (d) No termination or amendment of this Plan shall affect the rights or benefits of anyParticipant or the obligations of the Company accrued under this Plan as of the effective date ofsuch termination or amendment or any of the rights or benefits of such Participant or theobligations of the Company accruing under this Plan after the effective date of such termination oramendment on account of any Change of Control that occurred prior to such effective date or within180 days after such effective date. If any Participant shall become entitled to benefits underthis Plan during the term of this Plan, then, notwithstanding the termination or amendment of thisPlan, 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 ofthis Plan is permitted by, or satisfies any of the requirements of, this Section 5.03, the burdenof 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 wereset forth in their entirety in a written instrument executed and delivered by the Company and suchParticipant and (b) constitute a continuing offer to all present and future Participants. TheCompany, by its adoption of this Plan, (i) acknowledges and agrees that each present and futureParticipant 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 ofacceptance of, this Plan by the Participants and (iii) acknowledges and agrees that no present orfuture Participant shall be prejudiced in his or her right to enforce directly the provisions ofthis Plan in accordance with its terms by any act or failure to act on the part of the Company.
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          Section 5.05. Administration. (a) The Compensation Committee shall have full andfinal authority to make determinations with respect to the administration of this Plan, to construeand interpret its provisions and to take all other actions deemed necessary or advisable for theproper administration of this Plan, but such authority shall be subject to the provisions of thisPlan. No discretionary action by the Compensation Committee shall amend or supersede the expressprovisions of this Plan.          (b) The members of the Compensation Committee shall receive no additional compensation fortheir services relating to this Plan. Any expenses properly incurred by the Compensation Committeeincident to this Plan, including the cost of any bond required by applicable law, shall be paid bythe Company.          (c) The Company shall indemnify and hold harmless each member of the Compensation Committeeagainst and all expenses and liabilities arising out of his or her administrative functions orfiduciary responsibilities, including any expenses and liabilities that are caused by or resultfrom an act or omission of such member acting in good faith in the performance of such functions orresponsibilities. Expenses against which such member shall be indemnified hereunder shall includethe amounts of any settlement or judgment, costs, counsel fees and related charges reasonablyincurred 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 thisPlan, a Participant will be required to sign an agreement, to be prepared by the Company, in whichhe or she releases the Company and its successors, assigns, divisions, subsidiaries,representatives, agents, officers, directors, stockholders and employees from any claims, demandsand causes of action relating to or arising out of the termination of his or her employment withthe 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 TexasCommission on Human Rights Act.          Section 5.07. Assignability. The Company shall have the right to assign this Plan andto delegate its duties and obligations hereunder; *provided, however*, that no such assignment ordelegation shall relieve or discharge the Company of or from any of its obligations under thisPlan. Unless otherwise approved by the Compensation Committee, no Participant shall transfer orassign any of his or her rights under this Plan except by will or the laws of descent anddistribution.          Section 5.08. Consolidations, Mergers, Etc. The Company will require any person, firmor entity which becomes its Successor to expressly assume and agree to perform this Plan inwriting, in the same manner and to the same extent that the Company would be required to performhereunder if no such succession had taken place.          Section 5.09. Successors and Assigns. This Plan shall be binding upon and inure to thebenefit of the Company and its successors and assigns. This Plan and all rights of eachParticipant shall inure to the benefit of and be enforceable by such Participant and his or herpersonal or legal representatives, executors, administrators, heirs and permitted assigns. If any
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Participant should die while any amounts are due and payable to such Participant hereunder, allsuch amounts, unless otherwise provided herein, shall be paid in accordance with the terms of thisPlan 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.          Section 5.10. Notices. All notices and other communications provided for in this Planshall be in writing and shall be sent, delivered or mailed, addressed as follows: (a) if to theCompany or any Subsidiary, at the Company’s principal office address or such other address as theCompany may have designated by written notice to all Participants for purposes hereof, directed tothe attention of the General Counsel, and (b) if to any Participant, at his or her residenceaddress on the records of the Company or to such other address as he or she may have designated tothe Company in writing for purposes hereof. Each such notice or other communication shall bedeemed to have been duly given or mailed by United States registered mail, return receiptrequested, postage prepaid, except that any change of notice address shall be effective only uponreceipt.          Section 5.11. Tax Withholdings. The Company shall have the right to deduct from anypayment 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 theCompany or (b) subject to the rights and benefits of any Participant hereunder, interfere in anyway 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 lawsof the State of Texas and applicable federal law.          In Witness Whereof, and as conclusive evidence of the adoption of this Plan by theBoard, the Company has caused this Plan to be duly executed in its name and behalf by its properofficer thereunto duly authorized as of the Effective Date.         Sterling Chemicals, Inc.          By:           Printed Name:           Title:         
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Exhibit ASterling Chemicals, Inc.Instrument of Designation          This Instrument Of Designation is intended to evidence the designation by theCompensation Committee of the Board of Directors of Sterling Chemicals, Inc., a Delawarecorporation (the “*Corporation*”), of the undersigned employee as a “Participant” within themeaning of that certain Fourth Amended and Restated Key Employee Protection Plan of theCorporation, with an Applicable Multiplier (as defined therein) of                     .          In Witness Whereof, the Corporation has caused its duly authorized officer to executethis Instrument of Designation effective as of the date set forth below.           Dated:     Sterling Chemicals, Inc.                             By:                   Printed Name:                   Title:             Employee:        Printed Name:          A-i
 

 
Exhibit BParticipants as of the Effective Date     *Name* *Applicable Multiplier*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  B-i