Document:

exv10w2

 

EXHIBIT 10.2

 

STERLING CHEMICALS

 

Sterling Chemicals, Inc.

Amended And Restated

Hourly Paid Employees’ Pension Plan

 

Effective as of January 1, 2007

 

 

 

Amended And Restated

Salaried Employees’ Pension Plan

Table of Contents

Preamble 

	 	 	 	 	 	 	 
	 

	 	Article I 	 	 	 	 
	 

	 	Definitions 	 	 	 	 
	 
	1.1

	 	Plan Definitions
	 	 	1	 
	1.2

	 	Construction
	 	 	9	 
	 
	 

	 	Article II 	 	 	 	 
	 

	 	Hours of Service 	 	 	 	 
	 
	2.1

	 	Crediting of Hours of Service
	 	 	9	 
	2.2

	 	Hours of Service Equivalencies
	 	 	11	 
	2.3

	 	Determination of Non-Duty Hours of Service
	 	 	11	 
	2.4

	 	Allocation of Hours of Service to Service Computation Periods
	 	 	12	 
	2.5

	 	Department of Labor Rules
	 	 	13	 
	 
	 

	 	Article III 	 	 	 	 
	 

	 	Service & Credited Service 	 	 	 	 
	 
	3.1

	 	Service
	 	 	13	 
	3.2

	 	Credited Service
	 	 	14	 
	3.3

	 	Transfers
	 	 	15	 
	3.4

	 	Retirement or Termination and Reemployment
	 	 	15	 
	3.5

	 	Finality of Determinations
	 	 	17	 
	 
	 

	 	Article IV 	 	 	 	 
	 

	 	Eligibility For Participation 	 	 	 	 
	 
	4.1

	 	Participation
	 	 	17	 
	4.2

	 	Termination of Participation
	 	 	17	 
	4.3

	 	Participation Upon Reemployment
	 	 	18	 
	4.4

	 	Finality of Determinations
	 	 	18	 

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Article V 

Normal Retirement 

	 	 	 	 	 	 	 
	5.1

	 	Eligibility
	 	 	18	 
	5.2

	 	Amount
	 	 	18	 
	5.3

	 	Special Calculation For Participants Who Transferred From The Salaried Plan 20	 	 	 	 
	5.4

	 	Adjustment to Normal Retirement Benefit for Employment After Normal Retirement Date
	 	 	20	 
	5.5

	 	Payment
	 	 	21	 
	 
	 

	 	Article VI 	 	 	 	 
	 

	 	Early Retirement 	 	 	 	 
	 
	6.1

	 	Eligibility
	 	 	21	 
	6.2

	 	Amount
	 	 	22	 
	6.3

	 	Payment
	 	 	22	 
	 
	 

	 	Article VII 	 	 	 	 
	 

	 	Vested Rights 	 	 	 	 
	 
	7.1

	 	Vesting
	 	 	22	 
	7.2

	 	Eligibility for Deferred Vested Retirement Benefit
	 	 	23	 
	7.3

	 	Amount of Deferred Vested Retirement Benefit
	 	 	23	 
	7.4

	 	Payment
	 	 	23	 
	7.5

	 	Election of Former Vesting Schedule
	 	 	23	 
	 
	 

	 	Article VIII 	 	 	 	 
	 

	 	Disability 	 	 	 	 
	 
	8.1

	 	Eligibility for Disability Accruals
	 	 	24	 
	8.2

	 	Disability Accrual
	 	 	24	 
	 
	 

	 	Article IX 	 	 	 	 
	 

	 	Forms of Payment 	 	 	 	 
	 
	9.1

	 	Normal Form of Payment
	 	 	24	 
	9.2

	 	Optional Forms of Payment
	 	 	25	 
	9.3

	 	Designation of Beneficiary and Beneficiary in
Absence of Designated Beneficiary
	 	 	29	 
	9.4

	 	Notice Regarding Forms of Payment
	 	 	29	 
	9.5

	 	Election Period
	 	 	30	 
	9.6

	 	Spousal Consent Requirements
	 	 	30	 
	9.7

	 	Death Prior to Annuity Starting Date
	 	 	31	 
	9.8

	 	Effect of Reemployment on Form of Payment
	 	 	31	 

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	 	Article X 	 	 	 	 
	 

	 	Survivor Benefits 	 	 	 	 
	 
	10.1

	 	Eligibility for Qualified Preretirement Survivor Annuity
	 	 	31	 
	10.2

	 	Amount of Qualified Preretirement Survivor Annuity
	 	 	32	 
	10.3

	 	Payment of Qualified Preretirement Survivor Annuity
	 	 	32	 
	 
	 

	 	Article XI 	 	 	 	 
	 

	 	General Provisions & Limitations Regarding Benefits 	 	 	 	 
	 
	11.1

	 	Suspension of Benefits for Rehired Retired Participants
	 	 	33	 
	11.2

	 	Exception to Suspension of Benefits Rule
	 	 	33	 
	11.3

	 	Non-Alienation of Retirement Rights or Benefits
	 	 	33	 
	11.4

	 	Payment of Benefits to Others
	 	 	34	 
	11.5

	 	Payment of Small Benefits; Deemed Cashout
	 	 	34	 
	11.6

	 	Direct Rollovers
	 	 	35	 
	11.7

	 	Limitations on Commencement
	 	 	35	 
	11.8

	 	Post Age 70 1/2 Payments
	 	 	36	 
	11.9

	 	Offset to Accrual After Normal Retirement Date
	 	 	36	 
	 
	 

	 	Article XII 	 	 	 	 
	 

	 	Maximum Retirement Benefits 	 	 	 	 
	 
	12.1

	 	Definitions
	 	 	37	 
	12.2

	 	Maximum Limitation on Annual Benefits
	 	 	40	 
	12.3

	 	Manner of Reduction
	 	 	40	 
	 
	 

	 	Article XIII 	 	 	 	 
	 

	 	Pension Fund 	 	 	 	 
	 
	13.1

	 	Pension Fund
	 	 	40	 
	13.2

	 	Contributions by the Employers
	 	 	40	 
	13.3

	 	Expenses of the Plan
	 	 	41	 
	13.4

	 	No Reversion
	 	 	41	 
	13.5

	 	Forfeitures Not to Increase Benefits
	 	 	42	 
	13.6

	 	Change of Funding Medium
	 	 	42	 
	 
	 

	 	Article XIV 	 	 	 	 
	 

	 	Administration 	 	 	 	 
	 
	14.1

	 	Authority of the Sponsor
	 	 	42	 
	14.2

	 	Action of the Sponsor
	 	 	43	 
	14.3

	 	Claims Review Procedure
	 	 	43	 
	14.4

	 	Qualified Domestic Relations Orders
	 	 	44	 
	14.5

	 	Indemnification
	 	 	44	 
	14.6

	 	Actions Binding
	 	 	44	 

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	 	Article XV 	 	 	 	 
	 

	 	Adoption By Other Entities 	 	 	 	 
	 
	15.1

	 	Adoption by Affiliated Companies
	 	 	45	 
	15.2

	 	Effective Plan Provisions
	 	 	45	 
	 
	 

	 	Article XVI 	 	 	 	 
	 

	 	Amendment & Termination of Plan 	 	 	 	 
	 
	16.1

	 	Sponsor’s Right of Amendment
	 	 	45	 
	16.2

	 	Termination of the Plan
	 	 	46	 
	16.3

	 	Adjustment of Allocation
	 	 	47	 
	16.4

	 	Assets Insufficient for Allocation
	 	 	47	 
	16.5

	 	Assets Insufficient for Allocation Under Paragraph (c) of Section 16.2
	 	 	47	 
	16.6

	 	Allocations Resulting in Discrimination
	 	 	48	 
	16.7

	 	Residual Assets
	 	 	48	 
	16.8

	 	Meanings of Terms
	 	 	48	 
	16.9

	 	Payments by the Funding Agent
	 	 	48	 
	16.10

	 	Residual Assets Distributable to the Employers
	 	 	48	 
	16.11

	 	Withdrawal of an Employer
	 	 	49	 
	 
	 

	 	Article XVII 	 	 	 	 
	 

	 	Miscellaneous 	 	 	 	 
	 
	17.1

	 	No Commitment as to Employment
	 	 	49	 
	17.2

	 	Claims of Other Persons
	 	 	49	 
	17.3

	 	Governing Law
	 	 	49	 
	17.4

	 	Nonforfeitability of Benefits Upon Termination or Partial Termination
	 	 	50	 
	17.5

	 	Merger, Consolidation, or Transfer of Plan Assets
	 	 	50	 
	17.6

	 	Funding Agreement
	 	 	50	 
	17.7

	 	Benefit Offsets for Overpayments
	 	 	50	 
	17.8

	 	Internal Revenue Requirements
	 	 	50	 
	17.9

	 	Veterans Reemployment Rights
	 	 	51	 
	 
	 

	 	Addendum A 	 	 	 	 
	 
	 

	 	Section I 	 	 	 	 
	 

	 	Definitions 	 	 	 	 
	 
	1.1

	 	Definitions 53	 	 	 	 
	 
	 

	 	Section II 	 	 	 	 
	 

	 	General Rules 	 	 	 	 
	 
	2.1

	 	Effective Date
	 	 	53	 
	2.2

	 	Precedence
	 	 	54	 
	 

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	2.3

	 	Requirements of Treasury Regulations Incorporated
	 	 	53	 
	2.4

	 	TEFRA Section 242(b)(2) Elections
	 	 	54	 
	 
	 

	 	Section III 	 	 	 	 
	 

	 	Time and Manner of Distribution 	 	 	 	 
	 
	3.1

	 	Required Beginning Date
	 	 	54	 
	3.2

	 	Death of Participant Before Distributions Begin
	 	 	54	 
	3.3

	 	Form of Distribution
	 	 	55	 
	 
	 

	 	Section IV 	 	 	 	 
	 

	 	Determination of Amount To Be Distributed Each Year 	 	 	 	 
	 
	4.1

	 	General Annuity Requirements
	 	 	55	 
	4.2

	 	Amount Required to be Distributed by Required Beginning Date
	 	 	56	 
	4.3

	 	Additional Accruals After First Distribution Calendar Year
	 	 	56	 
	 
	 

	 	Section V 	 	 	 	 
	 

	 	Requirements For Annuity Distributions 	 	 	 	 
	 

	 	That Commence During Participant’s Lifetime 	 	 	 	 
	 
	5.1

	 	Joint Life Annuities Where the Beneficiary Is Not the Participant’s Spouse
	 	 	56	 
	5.2

	 	Period Certain Annuities
	 	 	57	 
	 
	 

	 	Section VI 	 	 	 	 
	 

	 	Requirements For Minimum Distributions 	 	 	 	 
	 

	 	Where Participant Dies Before Date Distributions Begin 	 	 	 	 
	 
	6.1

	 	Participant Survived by Designated Beneficiary
	 	 	57	 
	6.2

	 	No Designated Beneficiary
	 	 	58	 
	6.3

	 	Death of Surviving Spouse Before Distributions to Surviving Spouse Begin
	 	 	58	 
	 

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Preamble

The Sterling Chemicals, Inc. Amended and Restated Hourly Paid Employees’ Pension Plan was
originally established effective August 1, 1986. The Plan was amended effective June 1, 2004, to
close participation in the Plan. The Plan is hereby amended and restated in its entirety. The
Plan, as amended and restated hereby, is intended to qualify as a defined benefit pension plan
under Code Section 401(a). The Plan is maintained for the exclusive benefit of eligible employees
and their beneficiaries.

Except as otherwise specifically provided in the Plan, this amended and restated Plan shall be
effective as of January 1, 2007, and the rights of any person who did not have an Hour of Service
under the Plan on or after January 1, 2007, shall generally be determined in accordance with the
terms of the Plan as in effect on the date for which he was last credited with an Hour of Service.

Notwithstanding any other provision of the Plan to the contrary, a Participant’s vested interest in
his Accrued Benefit under the Plan on and after the effective date of this amendment and
restatement shall be not less than his vested interest in his Accrued Benefit on the day
immediately preceding the effective date.

Article I

Definitions

1.1 Plan Definitions

As used herein, the following words and phrases, when they appear with initial letters capitalized
as indicated below, have the meanings hereinafter set forth:

A Participant’s “Accrued Benefit” as of any date means the portion of his monthly normal
retirement benefit accrued as of that date determined as provided in Article V, based on
his years of Credited Service and the benefit rate in effect on that date; provided,
however, that effective July 1, 2007, a Participant’s Accrued Benefit means his benefit
accrued as of July 1, 2007, as determined under the terms of the Plan in effect on that
date.

The “Actuarial Equivalent” of a value means the actuarial equivalent determined using the
1971 Towers, Perrin, Forster & Crosby Forecast Mortality Table with ages set back one year
for Participants and ages set back five years for Beneficiaries and an interest rate of
seven percent, except that in determining present value for purposes of a single sum
payment, the following factors shall be used: (i) the table prescribed by the Secretary of
the Treasury, which shall be based on the prevailing commissioners’ standard table,
described in Code Section 807(d)(5)(A), used to determine reserves for group annuity
contracts issued on the date as of which present value is being determined (without regard
to any other
subparagraph of Code Section 807(d)(5)) and (ii) the annual rate of interest on 30-year
Treasury securities for the second calendar month preceding the Plan Year in

 

 

which the distribution is made. For any single sum payment with an Annuity Starting Date on or after
December 31, 2002, the applicable mortality table is the table specified in Revenue Ruling
2001-62.

Notwithstanding the foregoing, for distributions made prior to October 1, 2000, for
purposes of determining present value, the following factors were applicable: (i) the
mortality rates used by the Pension Benefit Guaranty Corporation for terminating
single-employer plans and (ii) the “PBGC interest rate”. For any distribution made on or
after October 1, 2000, but before February 22, 2003, present value was determined using the
factors in this paragraph or the immediately preceding paragraph, whichever provided a
greater benefit.

For purposes of this section, the “PBGC interest rate” means the immediate and deferred
rates, as applicable, utilized by the Pension Benefit Guaranty Corporation for purposes of
determining the present value of a lump sum distribution on plan termination as in effect
at the beginning of the Plan Year in which present value is being determined.

For a Participant who has reached Normal Retirement Date at the time present value is being
determined, the present value of his Accrued Benefit shall be calculated based on the
immediate annuity payable to the Participant as of his Annuity Starting Date. For a
Participant who has not yet reached Normal Retirement Date at the time present value is
being determined, the present value of his Accrued Benefit shall be calculated based on a
deferred annuity payable commencing at Normal Retirement Date. For purposes of this
paragraph, immediate and deferred annuities will be in the normal form applicable to
unmarried Participants under Section 9.1 of the Plan.

The “Actuary” means an independent actuary selected by the Sponsor, who is an enrolled
actuary as defined in Code Section 7701(a)(35), or a firm or corporation of actuaries
having such a person on its staff, which person, firm, or corporation is to serve as the
actuarial consultant for the Plan.

The “Administrator” means the Sponsor unless the Sponsor designates another person or
persons to act as such.

An “Affiliated Company” means any corporation or business, other than an Employer, which
would be aggregated with an Employer for a relevant purpose under Code Section 414.

A Participant’s, or Beneficiary’s, if the Participant has died, “Annuity Starting Date”
means the first day of the first period for which an amount is paid as an annuity or, in
the case of a single sum payment, the first day on which all events
have occurred which entitle the Participant, or his Beneficiary, if applicable, to such
benefit.

If a Participant whose Annuity Starting Date has occurred is reemployed by an Employer or
an Affiliated Company resulting in a suspension of benefits in accordance with the
provisions of Section 11.1, for purposes of determining the form of payment of such

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Participant’s benefit upon his subsequent retirement, such prior Annuity Starting Date
shall apply to benefits accrued prior to the Participant’s reemployment. Such prior
Annuity Starting Date shall also apply to benefits accrued following the Participant’s
reemployment if such prior Annuity Starting Date occurred on or after the Participant’s
Normal Retirement Date. Such prior Annuity Starting Date shall not apply to
benefits accrued following the Participant’s reemployment if such prior Annuity Starting
Date occurred prior to the Participant’s Normal Retirement Date.

A Participant’s “Beneficiary” means any beneficiary who is entitled to receive a benefit
under the Plan upon the death of the Participant.

A “Break in Service” with respect to any Employee means any Service Computation Period
during which he completes fewer than 501 Hours of Service, except that no Employee shall
incur a Break in Service solely by reason of temporary absence from work not exceeding 12
months resulting from illness, layoff, or other cause if authorized in advance by an
Employer pursuant to its uniform leave policy, if his employment is not otherwise
terminated during the period of such absence.

The “Code” means the Internal Revenue Code of 1986, as amended from time to time.
Reference to a Code section shall include (i) such section and any comparable section or
sections of any future legislation that amends, supplements, or supersedes such section and
(ii) all rulings, regulations, notices, announcements, and other pronouncements issued by
the U.S. Treasury Department, the Internal Revenue Service, and any court of competent
jurisdiction that relate to such section.

A Participant’s “Credited Service” means his period of service for purposes of determining
the amount of any benefit for which he is eligible under the Plan, as computed in
accordance with the provisions of Article III.

A Participant is “Disabled” if the Participant meets the eligibility requirements in
Section 8.1.

“Early Retirement Date” means the following:

	 	(1)	 	for a Participant who elects to commence payments while his employment
continues, as permitted under Section 6.1 of the Plan, the first day of the month
following the latest of (i) the month in which he meets the
eligibility requirements in Section 6.1, (ii) the month in which he attains age 62,
or (iii) the month in which he makes written application for an early retirement
benefit; or
	 
	 	(2)	 	for a Participant who does not elect to commence payments while his
employment continues, the first day of the month following the later of the month in
which he retires after meeting the eligibility requirements in Section 6.1 or the
month in which he makes written application for an early retirement benefit, but not
later than his Normal Retirement Date.

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An “Employee” means any hourly-paid employee on the payroll of an Employer who is
characterized or treated by the Employer as a common law employee and who is covered by a
collective bargaining agreement with the Union. Any employee who becomes an Employee as a
result of reclassification by the Employer as a common law employee shall become an
Employee effective as of the date of such reclassification.

Notwithstanding the foregoing, the term “Employee” shall not include the following:

	 	(1)	 	any nonresident alien who does not receive United States source income;
	 
	 	(2)	 	any temporary worker who is engaged through or employed by a temporary or
leasing agency; or
	 
	 	(3)	 	any leased employee or any person who is an independent contractor or who is
employed by another company while providing services to the Employer.

For purposes of the Plan with respect to the provisions of Code Sections 401(a)(3), (4),
(7) and (16), and 408(k), 410, 411, 415 and 416, any “leased employee,” other than an
excludable leased employee, shall be treated as an employee of an Employer or any other
Affiliated Company; provided, however, that no “leased employee” shall become an Employee
or shall accrue a benefit hereunder based on service as a “leased employee”.

A “leased employee” means any person who performs services for an Employer or an Affiliated
Company (the “recipient”) (other than an employee of the recipient) pursuant to an
agreement between the recipient and any other person (the “leasing organization”) on a
substantially full-time basis for a period of at least one year, provided that such
services are performed under the primary direction or control of the recipient. An
“excludable leased employee” means any leased employee of the recipient who is covered by a
money purchase pension plan maintained by the leasing organization which provides for (i) a
nonintegrated employer contribution on behalf of each participant in the plan equal to at
least ten percent of compensation, (ii) full and immediate vesting, and (iii) immediate
participation by employees of the leasing organization (other than employees who perform
substantially all of their services for the leasing organization or whose compensation from
the leasing organization in each plan year during the four-year period ending with the plan
year is less than $1,000); provided, however, that leased employees do not constitute more
than 20 percent of the recipient’s nonhighly compensated work force. For purposes of this
Section, contributions or benefits provided to a leased employee by the leasing
organization that are attributable to services performed for the recipient shall be treated
as provided by the recipient.

An “Employer” means the Sponsor and any entity which has adopted the Plan as provided under
Article XV.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time. Reference to a section of ERISA shall include such section and any

-4-

 

comparable section or sections of any future legislation that amends, supplements, or supersedes such
section.

A Participant’s “Final Average Pay” means the sum of his Average Base Pay, Average Overtime
Pay, and Average Shift Premium for the Averaging Period described in (1) or (2) below,
whichever provides the greater dollar amount:

	 	(1)	 	the last 36 calendar months during which he has Base Pay immediately
preceding the earlier of:

	 	(a)	 	the date the Participant’s employment terminates (or the
Participant’s period of employment, if shorter); or

	 	(b)	 	July 1, 2007; or

	 	(2)	 	his highest three calendar years during the five consecutive calendar years
immediately preceding the earlier of:

	 	(a)	 	the calendar year during which the Participant’s employment
terminates, or;

	 	(b)	 	January 1, 2007.

For purposes of this Section, the following terms have the following meanings:

	 	(3)	 	A Participant’s “Average Base Pay” means his average Base Pay on the last day
of each month during the applicable Averaging Period multiplied by 2,080.
	 
	 	(4)	 	A Participant’s “Average Overtime Pay” means his Base Pay multiplied by the
average number of overtime hours worked by all Employees at the location at which the Participant is employed during the applicable Averaging
Period. For this purpose, overtime hours are considered worked during the month in
which an Employee is paid for such hours.
	 
	 	(5)	 	A Participant’s “Average Shift Premium” means his total shift premium paid
for regularly scheduled hours during the applicable Averaging Period divided by 3. For
this purpose, shift premium pay is considered attributable to hours worked during the
month in which the shift premium is paid.
	 
	 	(6)	 	“Base Pay” means a Participant’s regular, base, straight time rate of hourly
compensation, exclusive of any premium. If on the last day of a month a Participant is
receiving only accident or sickness pay or disability income from a welfare plan
maintained by his Employer, his Base Pay for the month shall be equal to his Base Pay
on his last day worked. If during an Averaging Period a Participant is voluntarily or
involuntarily transferred to a different job resulting in a reduction in his Base Pay,
the Participant’s Base Pay for each month following

-5-

 

	 	 	 	the transfer will be equal to the greater of (i) his Base Pay immediately preceding the
transfer or (ii) his Base Pay for any subsequent month during the Averaging Period.

In no event, shall the pay of a Participant taken into account for purposes of determining
Final Average Pay hereunder for any 12-consecutive-month period (the “limitation period”)
exceed (1) $200,000 for limitation periods beginning before January 1, 1994, or (2)
$150,000 for limitation periods beginning on or after January 1, 1994. Notwithstanding the
foregoing, for any Participant who is credited with at least one Hour of Service on or
after January 1, 2002, the pay of such Participant taken into account in determining Final
Average Pay for any limitation period beginning after December 31, 2001 shall not exceed
$200,000. For purposes of determining Final Average Pay in a Plan Year beginning after
December 31, 2001, pay for any prior limitation period shall be limited to $200,000.

The limitations set forth in the preceding paragraph shall be subject to adjustment
annually as provided in Code Section 401(a)(17)(B) and Code Section 415(d); provided,
however, that the dollar increase in effect on January 1 of any calendar year, if any, is
effective for limitation periods beginning in such calendar year.

Notwithstanding any other provision of the Plan to the contrary, pay for employment after
July 1, 2007 shall not be included in determining a Participant’s Final Average Pay.

The “Funding Agent” means the person or persons which at the time shall be designated,
qualified, and acting under the Funding Agreement and shall include (i) any trustee for a
trust established pursuant to the Funding Agreement, (ii) any insurance company that issues
an annuity or insurance contract pursuant to the
Funding Agreement, or (iii) any person holding assets in a custodial account pursuant to
the Funding Agreement. The Sponsor may designate a person or persons other than the
Funding Agent to perform any responsibilities of the Funding Agent under the Plan, other
than trustee responsibilities as defined in ERISA Section 405(c)(3), and the Funding Agent
shall not be liable for the performance of such person in carrying out such
responsibilities except as otherwise provided by ERISA. The term Funding Agent shall
include any delegate of the Funding Agent as may be provided in the Funding Agreement.

The “Funding Agreement” means the agreement entered into between the Sponsor and the
Funding Agent relating to the holding, investment, and reinvestment of the assets of the
Plan, together with all amendments thereto, and shall include any agreement establishing a
trust, a custodial account, an annuity contract, or an insurance contract (other than a
life, health or accident, property, casualty, or liability insurance contract) for the
investment of assets; provided, however, that any custodial account or contract established
hereunder meets the requirements of Code Section 401(f).

A “Highly Compensated Employee” means any Employee or former Employee who is a highly
compensated active employee or a highly compensated former employee as defined hereunder.

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A “highly compensated active employee” includes any Employee who performs services for an
Employer or any Affiliated Company during the Plan Year and who (i) was a five percent owner
at any time during the Plan Year or the look back year or (ii) received compensation from
the Employers and Affiliated Companies during the look back year in excess of $80,000
(subject to adjustment annually at the same time and in the same manner as under Code
Section 415(d)). The dollar amount in (ii) shall be pro-rated for any Plan Year of fewer
than 12 months.

A “highly compensated former employee” includes any Employee who (i) separated from service
from an Employer and all Affiliated Companies (or is deemed to have separated from service
from an Employer and all Affiliated Companies) prior to the Plan Year, (ii) performed no
services for an Employer or any Affiliated Company during the Plan Year, and (iii) for
either the separation year or any Plan Year ending on or after the date the Employee attains
age 55, was a highly compensated active employee, as determined under the rules in effect
under Code Section 414(q) for such year.

The determination of who is a Highly Compensated Employee hereunder shall be made in
accordance with the provisions of Code Section 414(q) and regulations issued thereunder.

For purposes of this definition, the following terms have the following meanings:

	(1)	 	An employee’s “compensation” means Compensation as defined in Section 12.1.
	 
	(2)	 	The “look back year” means the 12-month period immediately preceding the Plan
Year.

An “Hour of Service” with respect to any Employee means an hour which is determined and
credited as such in accordance with the provisions of Article II.

“LTD Plan” means the Employer’s long-term disability plan.

A Participant’s “Normal Retirement Date” for purposes of benefit eligibility means the later
of (i) the date on which he attains age 65 or (ii) the earlier of (A) the date he completes
5 years of Service or (B) the fifth anniversary of the date he commenced participation in
the Plan. For all other purposes, Normal Retirement Date means the first day of the month
immediately following such date.

A “Participant” means any person who becomes eligible to participate in the Plan in
accordance with the provisions of Article IV and who retains an Accrued Benefit under the
Plan.

The “Pension Fund” means the fund or funds maintained under the Funding Agreement for
purposes of accumulating contributions made by the Employers and paying benefits under the
Plan.

-7-

 

The “Plan” means this Sterling Chemicals, Inc. Amended and Restated Hourly Paid Employees’
Pension Plan, established effective August 1, 1986, as amended and restated by this
instrument, with all amendments, modifications, and supplements hereafter made.

A “Plan Year” on and after January 1, 2004 means the 12-consecutive-month period ending each
December 31. The Plan Year that began on October 1, 2003 ended on December 31, 2003. Prior
to October 1, 2003, the Plan Year meant the 12-consecutive-month period ending each
September 30. The first Plan Year began on August 1, 1986 and ended on September 30, 1986.

“Prior Monsanto Participant” means each employee of an Employer as of August 1, 1986 who was
previously an employee of the Monsanto Company (whether or not just prior to formation of
the Employer) and was a participant in the Monsanto Company Salaried Employees’ Pension Plan
or the Monsanto Company Hourly Paid Employees’ Pension Plan during such employment with the
Monsanto Company.

A “Qualified Joint and Survivor Annuity” is an immediate annuity payable to the Participant
for his life with a survivor benefit payable upon the death of the Participant to the
Participant’s Spouse (determined as of his Annuity Starting Date) for the remainder of such
Spouse’s lifetime. The amount of the survivor benefit payable under a Qualified Joint and
Survivor Annuity shall be equal to at least 50 percent of the amount the Participant was
receiving on his date of death.

A “Qualified Preretirement Survivor Annuity” is an annuity payable to the surviving Spouse
of a Participant for such Spouse’s life as provided in Article X.

A Participant’s “Required Beginning Date” on and after December 31, 1998 means the April 1
following the calendar year in which occurs the later of (i) the Participant’s attainment of
age 70 1/2 or (ii) the date the Participant retires; provided, however, that clause
(ii) shall not apply to a Participant who is a five percent owner, as defined in Code
Section 416(i), with respect to the Plan Year ending with or within the calendar year in
which the Participant attains age 70 1/2. The Required Beginning Date of a Participant who
is a five percent owner hereunder shall not be redetermined if the Participant ceases to be
a five percent owner with respect to any subsequent Plan Year.

A Participant’s “Service” means his period of service for purposes of determining his
eligibility for a benefit under the Plan, as computed in accordance with the provisions of
Article III.

A “Service Computation Period” means the period used for determining an Employee’s years of
Service and years of Credited Service.

The Service Computation Period for determining an Employee’s years of Service is the
following: (i) prior to January 1, 1996, the 12-consecutive-month period ending each

-8-

 

September 30; (ii) the period beginning October 1, 1995 and ending September 30, 1996; and
(iii) beginning January 1, 1996, the calendar year.

The Service Computation Period for determining an Employee’s years of Credited Service is
the following: (i) prior to October 1, 1996, the 12-consecutive-month period ending each
September 30; (ii) the period beginning October 1, 1996 and ending December 31, 1996; and
(iii) beginning January 1, 1997, the calendar year.

The “Sponsor” means Sterling Chemicals, Inc., and any successor thereto.

A Participant’s “Spouse” means the person who is the Participant’s lawful spouse.

The “Union” means the Texas City, Texas Metal Trades Council, AFL-CIO.

1.2 Construction

Where required by the context, the noun, verb, adjective, and adverb forms of each defined term
shall include any of its other forms. Wherever used herein, the masculine pronoun shall include
the feminine, the singular shall include the plural, and the plural shall include the singular.

Article II

Hours of Service

2.1 Crediting of Hours of Service

An Employee shall be credited with an Hour of Service under the Plan for:

	(a)	 	Each hour for which he is paid, or entitled to payment, for the performance of duties for an
Employer as an Employee; provided, however, that hours paid for at a premium rate shall be
treated as straight-time hours.
	 
	(b)	 	Each hour for which he is paid, or entitled to payment, by an Employer on account of a period
of time during which no duties as an Employee are performed (irrespective of whether he
remains an Employee) due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, or leave of absence, up to a maximum of eight hours per day
and 40 hours per week; provided, however, that no more than 501 Hours of Service shall be
credited to an Employee on account of any single continuous period during which he performs no
duties (whether or not such period occurs in a single Service Computation Period); provided,
further, that no Hours of Service shall be credited for payment which is made or due under a
program maintained solely for the purpose of complying with applicable Workers’ Compensation,
unemployment compensation, or disability insurance laws; and provided, further, that no Hours
of

-9-

 

	 	 	Service shall be credited to an Employee for payment which is made or due solely as
reimbursement for medical or medically related expenses incurred by him.
	 
	(c)	 	Each hour for which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by an Employer; provided, however, that the crediting of Hours of Service for back
pay awarded or agreed to with respect to periods of employment or absence from employment
described in any other paragraph of this Section shall be subject to the limitations set forth
therein and, if applicable, in Section 2.3 and Section 2.4.
	 
	(d)	 	Each hour for which he would have been scheduled to work for an Employer during the period of
time that he is absent from work because of service with the armed forces of the United
States, up to a maximum of eight hours per day and 40 hours per week, but only if he is
eligible for reemployment rights under the Uniformed Services Employment and Reemployment
Rights Act of 1994 and he returns to work with an Employer within the period during which he
retains such reemployment rights.
	 
	(e)	 	Each hour, determined as provided herein, during the period of time that he is absent from
work because of disability for which he is eligible for or receiving disability benefits under
the LTD Plan. For purposes of this paragraph, an eligible Participant shall be credited with
95 Hours of Service for each half month, or 190 Hours of Service for each full month, during
which he is eligible for or receives benefits under the LTD Plan.
	 
	(f)	 	Each hour for which he would have been scheduled to work for an Employer during the period of
time that he is absent from work on leave approved by the Employer in order to conduct
business on behalf of the Union.
	 
	(g)	 	Each hour for which he would have been scheduled to work for an Employer during the period of
time that he is absent from work because of an approved leave of absence or such shorter
period as may be specified by the Employer.
	 
	(h)	 	Each hour for which he would have been scheduled to work for an Employer during the first 12
months of any absence from work because of temporary layoff.
	 
	(i)	 	Each hour, determined as provided herein, during the first 12 months of any absence from work
because of non-occupational illness or disability that is not yet determined to be a long-term
disability for which he is eligible for disability benefits under the LTD Plan. For purposes
of this paragraph, an eligible Participant shall be credited with 95 Hours of Service for each
half month, or 190 Hours of Service for each full month, during which he is absent because of
such illness or disability.
	 
	(j)	 	Each hour, determined as provided herein, during the period of time that he is absent from
work because of occupational illness or disability that is not yet determined to be a
long-term disability for which he is eligible for disability benefits under the LTD Plan. For
purposes of this paragraph, an eligible Participant shall be credited with 95 Hours of Service
for each half month, or 190 Hours of Service for each full month, during which he is absent
because of such illness or disability.

-10-

 

	(k)	 	Solely for purposes of determining whether he has incurred a Break in Service, each hour for
which he would have been scheduled to work for an Employer during the period of time that he
is absent from work because of the birth of a child, pregnancy, the adoption of a child, or
the caring for a child for the period beginning following the birth or adoption of such child,
up to a maximum of eight hours per day and 40 hours per week so that, when added to Hours of
Service credited under any other paragraph of this Section, he shall be credited with not
fewer than 501 total Hours of Service under the Plan for the Service Computation Period in
which his absence commenced or the immediately following Service Computation Period; provided,
however, that he shall be credited with Hours of Service under this paragraph for the Service
Computation Period in which his absence from employment commenced only if necessary to prevent
a Break in Service; and provided, further, that he shall be credited with Hours of Service
under this paragraph for the Service Computation Period immediately following the Service
Computation Period in which his absence from employment commenced only if he is not credited
with Hours of Service under this paragraph for the Service Computation Period in which his
absence from employment commenced.
	 
	(l)	 	Solely for purposes of determining whether he has incurred a Break in Service, each hour for
which he would be scheduled to work for an Employer during the period of time that he is
absent from work on an approved leave of absence pursuant to the Family and Medical Leave Act
of 1993; provided, however, that Hours of Service shall not be credited to an Employee under
this paragraph if the Employee fails to return to employment with an Employer following such
leave.

Notwithstanding anything to the contrary contained in this Section, no more than one Hour of
Service shall be credited to an Employee for any one hour of his employment or absence from
employment.

2.2 Hours of Service Equivalencies

Notwithstanding any other provision of the Plan to the contrary, if an Employer does not maintain
records that accurately reflect actual hours of service with respect to an Employee, such Employee
shall be credited with 95 Hours of Service for each semi-monthly payroll period, which results in a
credit of 190 Hours of Service for each month in which he performs an Hour of Service.

2.3 Determination of Non-Duty Hours of Service

In the case of a payment which is made or due from an Employer on account of a period during which
an Employee performs no duties, and which results in the crediting of Hours of Service, or in the
case of an award or agreement for back pay, to the extent that such award or agreement is made with
respect to a period during which an Employee performs no duties, the number of Hours of Service to
be credited shall be determined as follows:

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	(a)	 	In the case of a payment made or due which is calculated on the basis of units of time, such
as hours, days, weeks, or months, the number of Hours of Service to be credited shall be the
number of regularly scheduled working hours included in the units of time on the basis of
which the payment is calculated.
	 
	(b)	 	In the case of a payment made or due which is not calculated on the basis of units of time,
the number of Hours of Service to be credited shall be equal to the amount of the payment
divided by the Employee’s most recent hourly rate of compensation immediately prior to the
period to which the payment relates.
	 
	(c)	 	Notwithstanding the provisions of paragraphs (a) and (b), no Employee shall be credited on
account of a period during which no duties are performed with a number of Hours of Service
that is greater than the number of regularly scheduled working hours during such period.
	 
	(d)	 	If an Employee is without a regular work schedule, the number of “regularly scheduled working
hours” shall mean the average number of hours worked by Employees in the same job
classification during the period to which the payment relates, or if there are no other
Employees in the same job classification, the average number of hours worked by the Employee
during an equivalent, representative period.

For the purpose of crediting Hours of Service for a period during which an Employee performs no
duties, a payment shall be deemed to be made by or due from an Employer (i) regardless of whether
such payment is made by or due from an Employer directly, or indirectly through (among others) a
trust fund or insurer to which the Employer contributes or pays premiums, and (ii) regardless of
whether contributions made or due to such trust fund, insurer, or other entity are for the benefit
of particular persons or are on behalf of a group of persons in the aggregate.

2.4 Allocation of Hours of Service to Service Computation Periods

Hours of Service credited under Section 2.1 shall be allocated to the appropriate Service
Computation Period as follows:

	(a)	 	Hours of Service described in paragraph (a) of Section 2.1 shall be allocated to the Service
Computation Period in which the duties are performed.
	 
	(b)	 	Hours of Service credited to an Employee for a period during which an Employee performs no
duties shall be allocated as follows:

	 	(1)	 	Hours of Service credited to an Employee on account of a payment which is
calculated on the basis of units of time, such as hours, days, weeks, or months, shall
be allocated to the Service Computation Period or Periods in which the period during
which no duties are performed occurs, beginning with the first unit of time to which
the payment relates.

-12-

 

	 	(2)	 	Hours of Service credited to an Employee on account of a payment which is not
calculated on the basis of units of time shall be allocated to the Service Computation
Period or Periods in which the period during which no duties are performed occurs, or,
if such period extends beyond one Service Computation Period, such Hours of Service
shall be allocated equally between the first two such Service Computation Periods.
	 
	 	(3)	 	Hours of Service credited to an Employee for a period of absence during which
the Employee performs no duties and for which no payment is due from his Employer shall
be allocated to the Service Computation Period or Periods during which such absence
occurred.
	 
	 	(4)	 	Hours of Service credited to an Employee because of an award or agreement for
back pay shall be allocated to the Service Computation Period or Periods to which the
award or agreement for back pay pertains, rather than to the Service Computation Period
in which the award, agreement, or payment is made.

2.5 Department of Labor Rules

The rules set forth in paragraphs (b) and (c) of Department of Labor Regulation Section
2530.200b-2, which relate to determining Hours of Service attributable to reasons other than the
performance of duties and crediting Hours of Service to Service Computation Periods, are hereby
incorporated into the Plan by reference.

Article III

Service & Credited Service

3.1 Service

Each person who is an employee of the Employer shall be credited with Service for determining his
vested interest in his Accrued Benefit as follows:

	(a)	 	For periods on and after October 1, 1993, with the exception of the periods described in item
(b) below, he shall be credited with a year of Service for each Service Computation Period for
which he is credited with at least 1,000 Hours of Service; provided, however, that if he is
credited with fewer than 1,000 Hours of Service for a Service Computation Period, he shall be
credited with a partial year of Service in the ratio that his Hours of Service for the Service
Computation Period bears to 1,000.
	 
	(b)	 	An employee who is credited with at least 1,000 Hours of Service in the Service Computation
Period that began on October 1, 1995 and ended on September 30, 1996 and in the Service
Computation Period that began January 1, 1996 shall be credited with a year of Service for
each such Service Computation Period.

-13-

 

	(c)	 	A Participant who meets the requirements of Section 8.1, entitled “Eligibility for Disability
Accruals” who has not elected to cease payments under the LTD Plan and receive retirement
benefits under the Plan in accordance with Section 8.1 will continue to accrue Service while
eligible for benefits under the Employer’s LTD Plan, in accordance with Section 8.2.
	 
	(d)	 	For periods prior to October 1, 1993, Service was credited in accordance with the provisions
of the Plan as constituted prior to such date.
	 
	(e)	 	For Prior Monsanto Participants, Service is credited on August 1, 1986 in an amount that is
not less than the Service credited to the Participant under the Monsanto Company Salaried
Employees’ Pension Plan and/or the Monsanto Company Hourly Paid Employees’ Pension Plan as of
August 1, 1986.

3.2 Credited Service

There shall be no Credited Service credited under the Plan after July 1, 2007, except for purposes
of determining a Participant’s eligibility for Disability accruals in accordance with the
provisions of Section 8.1.

Each person who was an Employee on or prior to July 1, 2007 shall be credited with Credited Service
for determining the amount of his Accrued Benefit as follows:

	(a)	 	For periods on and after October 1, 1993, subject to any limitations set forth in Article V,
with the exception of the periods described in item (b) below, he shall be credited with a
year of Credited Service for each Service Computation Period for which he is credited with at
least 2,080 Hours of Service.
	 
	 	 	If the Participant is credited with fewer than 2,080 Hours of Service, he shall be credited
with a partial year of Credited Service in the ratio that his Hours of Service for the
Service Computation Period bears to 2,080.
	 
	(b)	 	For the Service Computation Period that began on October 1, 1995 and ended on December 31,
1995, a Participant shall be credited with a fractional year of Credited Service for such
Service Computation Period in the ratio that his Hours of Service for the Service Computation
Period bears to 2,080.
	 
	(c)	 	A Participant who meets the requirements of Section 8.1, entitled “Eligibility for Disability
Accruals” who has not elected to cease payments under the LTD Plan and receive retirement
benefits under the Plan in accordance with Section 8.1 will continue to accrue Credited
Service while eligible for benefits under the Employer’s LTD Plan, in accordance with Section
8.2, at the rate of 190 Hours of Service per month.
	 
	(d)	 	For periods prior to October 1, 1993, Service was credited in accordance with the provisions
of the Plan as constituted prior to such date.

-14-

 

	(e)	 	For Prior Monsanto Participants, Credited Service is credited on August 1, 1986 in an amount
that is not less than the Credited Service credited to the Participant under the Monsanto
Company Salaried Employees’ Pension Plan and/or the Monsanto Company Hourly Paid Employees’
Pension Plan as of August 1, 1986.

3.3 Transfers

Notwithstanding the provisions of Sections 3.1 and 3.2, Service and Credited Service credited to a
person shall be subject to the following, provided, however, no Employee shall become a Participant
on or after June 1, 2004.

	(a)	 	Any person who transfers or retransfers to employment with an Employer as an Employee
directly from other employment with an Employer in a capacity other than as an Employee, shall
be credited with Service and Credited Service for such other employment as if such other
employment were employment with an Employer as an Employee.
	 
	(b)	 	Any person who transfers from employment with an Employer as an Employee directly to other
employment with an Employer in a capacity other than as an Employee shall be deemed by such
transfer not to lose his Service or Credited Service, and shall be deemed not to retire or
otherwise terminate his employment as an Employee until such time as he is no longer in the
employment of an Employer, at which time he shall become entitled to benefits if he is
otherwise eligible therefore under the provisions of the Plan and shall receive credit for
Service and Credited Service for such other employment as if such other employment were
employment with an Employer as an Employee.
	 
	(a)	 	Any person who transfers or retransfers to employment with an Employer as an Employee
directly from other employment with any other Affiliated Company, shall be credited with
Service, but not Credited Service, for such other employment as if such other employment were
employment with an Employer as an Employee.
	 
	(b)	 	Any person who transfers from employment with an Employer as an Employee directly to
employment with any other Affiliated Company, shall be deemed by such transfer not to lose his
Service or Credited Service; provided, however, that up to the time he is no longer in the
employment of any other Affiliated Company, he shall receive credit for Service, but not for
Credited Service, for such other employment as if such other employment were employment with
an Employer as an Employee.

Notwithstanding any other provision of this Section, there shall be no Credited Service credited
under the Plan after July 1, 2007, except for purposes of determining a Participant’s eligibility
for Disability accruals in accordance with the provisions of Section 8.1.

3.4 Retirement or Termination and Reemployment

     If an Employee retires or otherwise terminates employment with the Employers and all Affiliated
Companies, his eligibility for and the amount of any benefit to which he may be entitled under

-15-

 

the
Plan shall be determined based upon the Service and Credited Service with which he is credited at
the time of such retirement or other termination of employment. If such retired or former Employee
is reemployed by an Employer or any Affiliated Company, the Service and Credited Service with which
he was credited at the time of such prior retirement or other termination of employment shall be
aggregated with the Service and Credited Service with which he is credited following his
reemployment for purposes of determining his eligibility for and the amount of any benefit to which
he may be entitled under the Plan upon his subsequent retirement or other termination of employment
if:

	(a)	 	he is reemployed before incurring a Break in Service; or
	 
	(b)	 	he is reemployed following a Break in Service and he satisfies the requirements of (1) or (2)
below, as applicable:

	 	(1)	 	he was eligible for any retirement benefit at the time of his previous
retirement or other termination of employment and he satisfies any one of the
following:

	 	(i)	 	he completes a year of Service following his return to
employment; or
	 
	 	(ii)	 	his Break in Service was due to layoff and he is reemployed
following such layoff; or
	 
	 	(iii)	 	his Break in Service was due to Disability and the Participant
was eligible for benefits under the Employer’s LTD Plan, as described in
Section 8.1, and upon cessation of the LTD Plan benefits, the Participant
returns to active employment with the Employer as an Employee.

	 	(2)	 	he terminated his employment before satisfying the conditions of eligibility
for any retirement benefit under the Plan and he satisfies any one of the following:

	 	(i)	 	he completes a year of Service following reemployment and
either (A) the aggregate number of his years of Service (not including any
years of Service not required to be aggregated because of previous Breaks in
Service) is greater than the number of his consecutive one-year Breaks in
Service or (B) the number of his consecutive one-year Breaks in Service is less
than five; or
	 
	 	(ii)	 	his Break in Service was due to layoff and he is reemployed
within the 3-year period following commencement of such layoff; or
	 
	 	(iii)	 	his Break in Service was due to Disability and the Participant
was eligible for benefits under the Employer’s LTD Plan, as described in
Section 8.1, and upon cessation of the LTD Plan benefits, the Participant
returns to active employment with the Employer as an Employee; or
	 
	 	(iv)	 	he completes 10 years of Service following reemployment.

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Notwithstanding the foregoing, if the Participant received a single sum payment of the present
value of his vested Accrued Benefit as provided in Section 11.5, other than a deemed distribution,
because of his prior retirement or termination of employment, his Credited Service credited at the
time of such prior retirement or termination of employment shall be lost and shall not be
aggregated with the Credited Service credited to the Participant following his reemployment.
Payment of the present value of a Participant’s vested Accrued Benefit is deemed to be made because
of his prior retirement or termination of employment if it is made before the end of the second
Plan Year following the Plan Year in which such retirement or termination occurred.

Notwithstanding any other provision of this Section, if a retired or former Employee returns to
employment in a capacity other than as an Employee, his period of employment shall be treated for
the purposes of the Plan solely in accordance with the transfer provisions of this Article III.

3.5 Finality of Determinations

All determinations with respect to the crediting of Service and Credited Service under the Plan
shall be made on the basis of the records of the Employers, and all determinations so made shall be
final and conclusive upon Employees, former Employees, and all other persons claiming a benefit
interest under the Plan. Notwithstanding anything to the contrary contained in this Article, there
shall be no duplication of Service and Credited Service.

Article IV

Eligibility For Participation

4.1 Participation

Participation in the Plan was frozen effective June 1, 2004. Any Employee who was a Participant on
that date shall continue as a Participant hereunder. No other Employee shall become a Participant
hereunder after that date.

Prior to June 1, 2004, an employee became a Participant on the day the employee became an Employee;
provided no employee became a Participant any earlier than the date their Employer adopted the
Plan.

Prior Monsanto Participants became Participants in the Plan on the date they became an Employee.

4.2 Termination of Participation

A person shall remain a Participant as long as he retains an Accrued Benefit under the Plan.

- 17 -

 

4.3 Participation Upon Reemployment

If a former Employee who was a Participant hereunder is reemployed as an Employee on or after June
1, 2004, he shall not again accrue benefits hereunder.

4.4 Finality of Determinations

All determinations with respect to the eligibility of an Employee to become a Participant under the
Plan shall be made on the basis of the records of the Employers, and all determinations so made
shall be final and conclusive for all Plan purposes. Each Employee who becomes a Participant shall
be entitled to the benefits, and be bound by all the terms, provisions, and conditions of the Plan
and the Funding Agreement.

Article V

Normal Retirement

5.1 Eligibility

Each Participant who retires from employment with the Employers on or after his Normal Retirement
Date shall be eligible for a normal retirement benefit.

5.2 Amount

Notwithstanding any other provision of the Plan, benefits under the Plan are frozen effective July
1, 2007. No further benefits shall accrue after that date.

Effective for Participants whose employment with an Employer ceases on or after December 31, 1998,
an eligible Participant’s monthly normal retirement benefit shall be equal to the product of the
applicable dollar amount, determined from the chart below based on the Participant’s Final Average
Pay, multiplied by the Participant’s number of years and partial years of Credited Service at
retirement.

	 	 	 
	Final Average Pay	 	Applicable Dollar Amount
	Less than $35,500
	 	$35
	 
	At least $35,500, but less than $36,500
	 	$36
	 
	At least $36,500, but less than $37,500
	 	$37
	 
	At least $37,500, but less than $38,500
	 	$38
	 
	At least $38,500, but less than $39,500
	 	$39

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	Final Average Pay	 	Applicable Dollar Amount
	At least $39,500, but less than $40,500
	 	$40
	 
	At least $40,500, but less than $41,500
	 	$41
	 
	At least $41,500, but less than $42,500
	 	$42
	 
	At least $42,500, but less than $43,500
	 	$43
	 
	At least $43,500, but less than $44,500
	 	$44
	 
	At least $44,500, but less than $45,500
	 	$45
	 
	At least $45,500, but less than $46,500
	 	$46
	 
	At least $46,500, but less than $47,500
	 	$47
	 
	At least $47,500, but less than $48,500
	 	$48
	 
	At least $48,500, but less than $49,500
	 	$49
	 
	At least $49,500, but less than $50,500
	 	$50
	 
	At least $50,500, but less than $51,500
	 	$51
	 
	At least $51,500, but less than $52,500
	 	$52
	 
	At least $52,500, but less than $53,500
	 	$53
	 
	At least $53,500, but less than $54,500
	 	$54
	 
	At least $54,500, but less than $55,500
	 	$55
	 
	At least $55,500, but less than $56,500
	 	$56
	 
	At least $56,500, but less than $57,500
	 	$57
	 
	At least $57,500, but less than $58,500
	 	$58
	 
	At least $58,500, but less than $59,500
	 	$59
	 
	$59,500 or more
	 	$60

Notwithstanding anything to the contrary contained above, a Participant’s monthly normal retirement
benefit determined above will be offset by such Participant’s vested Accrued Benefit payable under
the Monsanto Company Salaried Employees’ Pension Plan or the Monsanto Company Hourly Paid
Employees’ Pension Plan, if any.

- 19 -

 

In no event will a reduction in a Participant’s [Average Monthly Earnings] [Final Average
Pay?]reduce the normal retirement benefit payable to him below the amount that would have been
payable to him under the same form of payment had he retired prior to his Normal Retirement Date
when eligible for an early retirement benefit.

5.3 Special Calculation For Participants Who Transferred From The Salaried Plan

The total Accrued Benefit (due to participation in both plans) of a Participant who transferred to
employment covered under the Plan from employment covered under the Sterling Chemicals, Inc.
Amended and Restated Salaried Employees’ Pension Plan (the “Salaried Plan’) will be the greater of
(a) or (b):

	(a)	 	the Accrued Benefit under the Plan, calculated using the total years and partial years of
Credited Service under both plans; or
	 
	(b)	 	The sum of (1) and (2):

	 	(1)	 	The Accrued Benefit under the Plan, calculated using only the Benefit Service
earned under the Plan, plus
	 
	 	(2)	 	The Accrued Benefit payable to him from the Salaried Plan, calculated using only
the Credited Service earned under the Salaried Plan, and the formula in effect in the
Salaried Plan at the time he ceased to be a participant in the Salaried Plan.

5.4 Adjustment to Normal Retirement Benefit for Employment After Normal Retirement Date

The monthly normal retirement benefit payable with respect to each Participant who continues in
employment with his Employer or an Affiliated Company after his Normal Retirement Date shall be
determined as provided in paragraph (a), and, if applicable, (b).

	(a)	 	For the period beginning on the Participant’s Normal Retirement Date and ending on the April
1 of the calendar year following the calendar year in which he reaches age 70 1/2, his benefit
shall be the greater of (1) or (2):

	 	(1)	 	the Participant’s Accrued Benefit as of the date such benefit is being determined
(taking into account that benefits under the Plan are frozen effective July 1, 2007); or
	 
	 	(2)	 	the Participant’s Accrued Benefit as of his Normal Retirement Date (taking into
account that benefits under the Plan are frozen effective July 1, 2007), increased,
using the Actuarial Equivalent as of his Annuity Starting Date (but no later than the
April 1 following the calendar year in which the Participant attains age 70 1/2).

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	(b)	 	For the period beginning on the April 1 of the calendar year following the calendar year in
which he reaches age 70 1/2, the Participant’s monthly retirement benefit shall be adjusted as
of each “determination date” (as defined in this Section). His benefit shall be the greater
of (1) or (2):

	 	(1)	 	the Participant’s Accrued Benefit as of the “determination date”; or
	 
	 	(2)	 	the Actuarial Equivalent on the “determination date” of the Participant’s
“adjusted normal retirement benefit” determined under this Section for the prior
“determination date” (as defined in this Section).

	 	 	For purposes of this Section, a “determination date” means the last day of each calendar year
during the period beginning with the calendar year following the calendar year in which the
Participant attains age 70 1/2 and ending on the earlier of (i) the date the Participant
retires from employment with his Employer and all Affiliated Companies, or (ii) his Annuity
Starting Date, except that the first “determination date” is the April 1 following the
calendar year in which the Participant attains age 70 1/2.

No further adjustments shall be made to a Participant’s monthly normal retirement benefit as
provided in paragraphs (a)(2) and (b)(2) after the earlier of (i) the date the Participant retires
from employment with his Employer and all Affiliated Companies, or (ii) his Annuity Starting Date,
and, if he continues to accrue benefits under the Plan, such continued accruals shall be reduced as
provided in Section 11.9.

5.5 Payment

A monthly normal retirement benefit shall be paid to an eligible Participant commencing as of the
first day of the month following the month in which he retires, but not later than the date
specified in Section 11.7.

Article VI

Early Retirement

6.1 Eligibility

Each Participant who retires from employment with the Employers at or after age 55, but prior to
his Normal Retirement Date and who has at least five years of Service and who is not eligible for
or does not elect to receive LTD Plan benefits in accordance with the provisions of Article VIII or
who ceases to receive LTD Plan benefits and meets the age and Service requirement above as of the
date LTD Plan benefits cease shall be eligible for an early retirement benefit.

In addition, a Participant who continues in employment with the Employers after satisfying the
conditions in the preceding paragraph shall be eligible for an early retirement benefit upon
attaining age 62 and while his employment continues, if he so elects.

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6.2 Amount

An eligible Participant’s monthly early retirement benefit shall be equal to his vested Accrued
Benefit on his Early Retirement Date; provided, however, that the amount of such benefit shall be
adjusted as provided below:

	(a)	 	Except as otherwise provided in paragraph (b) below, the amount of such benefit shall be
reduced by 1/4 of one percent for each full calendar month by which his Annuity Starting Date
precedes his Normal Retirement Date.
	 
	(b)	 	If a Participant attains the age 55 prior to the termination of his employment with the
Employers and the sum of a Participant’s age and years of Service equals or exceeds 80 as of
the first day of the month next following the month in which his employment terminates, the
reduction in the preceding paragraph will not apply on his Early Retirement Date.

If an eligible Participant elects to receive his early retirement benefit while continuing in
active employment, as permitted under Section 6.1, the amount of the benefit payable to the
Participant shall be determined in accordance with the provisions of this Section based upon the
Participant’s age and years of Service as of his Early Retirement Date. The amount of such benefit
shall not be adjusted during the term of the Participant’s employment.

A Participant’s vested interest in his Accrued Benefit shall be determined in accordance with the
schedule provided in Section 7.1.

6.3 Payment

A monthly early retirement benefit shall be paid to an eligible Participant commencing as of his
Early Retirement Date.

Article VII

Vested Rights

7.1 Vesting

A Participant’s vested interest in his Accrued Benefit shall be determined in accordance with the
following schedule, based upon the number of full years of Service credited to him; provided,
however, that a Participant’s vested interest in his Accrued Benefit shall be 100 percent if he is
employed by an Employer or an Affiliated Company on his Normal Retirement Date, regardless of
whether he has completed the number of years of Service required under the schedule for 100 percent
vesting.

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	Years of Service	 	Vested Interest
	less than five
	 	0%
	 
	five or more
	 	100%

7.2 Eligibility for Deferred Vested Retirement Benefit

Each Participant who terminates employment with his Employer and all Affiliated Companies, who has
a vested interest in his Accrued Benefit, and who is not eligible for a normal, early, or
disability retirement benefit under the Plan shall be eligible for a deferred vested retirement
benefit.

7.3 Amount of Deferred Vested Retirement Benefit

An eligible Participant’s monthly deferred vested retirement benefit shall be equal to his vested
Accrued Benefit on the date of his termination of employment; provided, however, that if the
Participant is eligible to elect to begin benefit payments before his Normal Retirement Date as
provided in Section 7.4, the amount of such benefit shall be reduced for early commencement in the
same way as provided in Section 6.2(a) with respect to an early retirement benefit.

7.4 Payment

A monthly deferred vested retirement benefit shall be paid to an eligible Participant commencing as
of his Normal Retirement Date; provided, however, that a Participant may elect to begin benefit
payments as of the first day of any month following the month in which he attains age 55.

7.5 Election of Former Vesting Schedule

In the event the Sponsor adopts an amendment to the Plan that changes the vesting schedule under
the Plan, including any amendment which directly or indirectly affects the computation of the
nonforfeitable interest of Participants’ rights to Accrued Benefits, any Participant with three or
more years of Service shall have a right to have his nonforfeitable interest in his Accrued Benefit
continue to be determined under the vesting schedule in effect prior to such amendment rather than
under the new vesting schedule, unless the nonforfeitable interest of such Participant in his
Accrued Benefit under the Plan, as amended, at any time is not less than such interest determined
without regard to such amendment. Such Participant shall exercise such right by giving written
notice of his exercise thereof to the Administrator within 60 days after the latest of (i) the date
he receives notice of such amendment from the Administrator, (ii) the effective date of the
amendment, or (iii) the date the amendment is adopted. Notwithstanding the foregoing provisions of
this Section, the vested interest of each Participant on the effective date of such amendment shall
not be less than his vested interest under the Plan as in effect immediately prior to the effective
date thereof.

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Article VIII

Disability

8.1 Eligibility for Disability Accruals

Each Participant who ceases active employment with the Employers prior to his Normal Retirement
Date due to an illness or disability after meeting the requirements for long-term disability
payments under the provisions of the LTD Plan is considered to be Disabled and is eligible to
accrue additional Service and Credited Service while receiving payments from the LTD Plan in
accordance with the provisions of Sections 3.1 and 3.2 provided the Participant has been credited
with at least two and one-half years of Credited Service at the time he becomes eligible for
payments under the LTD Plan.

A Participant who is receiving LTD Plan payments may elect to cease such payments prior to his
Normal Retirement Date and receive an early retirement or deferred vested retirement benefit in
accordance with the
provisions of Article VI or VII, provided he meets the eligibility requirements thereunder at the
time of the election.

8.2 Disability Accrual

A Participant who meets the requirements of Section 8.1 will accrue Service and Credited Service
during the period he is eligible for benefits under the LTD Plan; provided, such Disability accrual
ceases on the earliest of:

	(a)	 	the first day of the month after he ceases to meet the requirements of Section 8.1;
	 
	(b)	 	the first day of the month after he elects, in writing, to cease his LTD Plan payments in
order to elect retirement benefits under the Plan;
	 
	(c)	 	the date of his death;
	 
	(d)	 	his Normal Retirement Date; or
	 
	(e)	 	for purposes of further accruals of Credited Service only, July 1, 2007.

Article IX

Forms of Payment

9.1 Normal Form of Payment

A Participant who is eligible to receive any retirement benefit under Section 5.1, 6.1, or 7.2 of
the Plan shall receive payment of such benefit in accordance with one of the following normal forms
of payment:

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	(a)	 	A Participant who is not married on his Annuity Starting Date shall receive such benefit in
the form of a single life annuity. Such Participant shall receive a monthly retirement
benefit payable for his lifetime, the last monthly payment being for the month in which his
death occurs.
	 
	(b)	 	A Participant who is married on his Annuity Starting Date shall receive such benefit in the
form of a 50 percent Qualified Joint and Survivor Annuity. Such Participant shall receive a
reduced monthly retirement benefit payable for his lifetime, the last monthly payment being
for the month in which his death occurs. If the Participant’s Spouse survives him, then
commencing with the month following the month in which the Participant’s death occurs, his
Spouse shall receive a monthly benefit for his or her remaining lifetime equal to one-half of
the reduced amount payable during the Participant’s lifetime, the last payment being for the
month in which the Spouse’s death occurs. A married Participant may elect to increase the
survivor benefit payable to his Spouse under the Qualified Joint and Survivor Annuity to 100
percent or 75 percent of the reduced amount payable during the Participant’s lifetime. Any
such election must be made during the election period described in Section 9.5.
	 
	 	 	The reduced monthly payments to be made to the Participant under this paragraph shall be in
an amount which, on the date of commencement thereof, is the Actuarial Equivalent of the
monthly benefit otherwise payable to the Participant under the form of payment described in
paragraph (a).

To receive a benefit under the Qualified Joint and Survivor Annuity form of payment described in
paragraph (b) above, a Participant’s Spouse must be the same Spouse to whom the Participant was
married on his Annuity Starting Date. Once a Participant’s Annuity Starting Date occurs and
retirement benefit payments commence under one of the normal forms of payment, the form of payment
will not change even if the Participant’s marital status changes; provided, however, that if the
Participant is reemployed by an Employer or an Affiliated Company, any benefits he accrues under
the Plan following such reemployment with respect to which a separate Annuity Starting Date occurs
shall be payable in the form elected by the Participant as of such separate Annuity Starting Date.

Subject to the requirements of Section 9.6, a Participant may waive the normal form of payment
applicable to him and elect to receive payment of his benefit in one of the optional forms of
payment provided in Section 9.2.

9.2 Optional Forms of Payment

Within the election period described in Section 9.5, a Participant who is eligible to receive a
normal, early, or deferred vested retirement benefit may elect to receive payment of such benefit
in accordance with any one of the following options. If the Participant is married on his Annuity
Starting Date, any such election must satisfy the requirements of Section 9.6.

- 25 -

 

If the Participant’s Beneficiary under an optional form of payment dies prior to the Participant’s
Annuity Starting Date, the election shall become inoperative and ineffective, and benefit payments,
if any, shall be made under the normal form of payment provided in Section 9.1, unless the
Participant elects another optional form of payment provided under the Plan prior to his Annuity
Starting Date. Once a Participant’s Annuity Starting Date occurs, however, the optional form of
payment elected by the Participant will not change even if the Participant’s marital status changes
or his Beneficiary predeceases him; provided, however, that if the Participant is reemployed by an
Employer or an Affiliated Company, any benefits he accrues under the Plan following his
reemployment with respect to which a separate Annuity Starting Date occurs shall be payable in the
form elected by the Participant as of such separate Annuity Starting Date.

The monthly payments made under any optional form of payment hereunder shall be the Actuarial
Equivalent of the monthly benefit otherwise payable to the Participant in the single life annuity
form described in paragraph (a) of Section 9.1.

	(a)	 	Single Life Annuity. The Participant shall receive a monthly retirement benefit payable for
his lifetime, the last monthly payment being for the month in which his death occurs.
	 
	(b)	 	100% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement
benefit payable for his lifetime, the last monthly payment being for the month in which his
death occurs. If the Participant’s Beneficiary survives him, then commencing with the month
following the month in which the Participant’s death occurs, his Beneficiary shall receive a
monthly benefit for his or her remaining lifetime equal to the reduced amount payable during the Participant’s lifetime, the last
monthly payment being for the month in which the Beneficiary’s death occurs.
	 
	(c)	 	75% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement
benefit payable for his lifetime, the last monthly payment being for the month in which his
death occurs. If the Participant’s Beneficiary survives him, then commencing with the month
following the month in which the Participant’s death occurs, his Beneficiary shall receive a
monthly benefit for his or her remaining lifetime equal to three-quarters of the reduced
amount payable during the Participant’s lifetime, the last monthly payment being for the month
in which the Beneficiary’s death occurs.
	 
	(d)	 	50% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement
benefit payable for his lifetime, the last monthly payment being for the month in which his
death occurs. If the Participant’s Beneficiary survives him, then commencing with the month
following the month in which the Participant’s death occurs, his Beneficiary shall receive a
monthly benefit for his or her remaining lifetime equal to one-half of the reduced amount
payable during the Participant’s lifetime, the last monthly payment being for the month in
which the Beneficiary’s death occurs.
	 
	(e)	 	25% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement
benefit payable for his lifetime, the last monthly payment being for the month in which his death
occurs. If the Participant’s Beneficiary survives him, then

- 26 -

 

commencing with the month following the month in which the Participant’s death occurs, his
Beneficiary shall receive a monthly benefit for his or her remaining lifetime equal to
one-quarter of the reduced amount payable during the Participant’s lifetime, the last
monthly payment being for the month in which the Beneficiary’s death occurs.

	(f)	 	Pop-Up 100% Joint and Survivor Annuity. The Participant shall receive a reduced monthly
retirement benefit payable for his lifetime, the last monthly payment being for the month in
which his death occurs. If the Participant’s Beneficiary survives him, then commencing with
the month following the month in which the Participant’s death occurs, his Beneficiary shall
receive a monthly benefit for his or her remaining lifetime equal to the reduced amount
payable during the Participant’s lifetime, the last monthly payment being for the month in
which the Beneficiary’s death occurs.

If the Beneficiary’s death occurs prior to the death of the Participant, then commencing
with the month following the month in which the Beneficiary’s death occurs, the Participant
shall receive an increase in the amount of his monthly benefit for the remainder of his or
her remaining lifetime equal to the amount that would be payable under a Single Life
Annuity, the last monthly payment being for the month in which the Participant’s death
occurs.

	(c)	 	Pop-Up 75% Joint and Survivor Annuity. The Participant shall receive a reduced monthly
retirement benefit payable for his lifetime, the last monthly payment being for the month in
which his death occurs. If the Participant’s Beneficiary survives him, then commencing with
the month following the month in which the Participant’s death occurs, his Beneficiary shall
receive a monthly benefit for his or her remaining lifetime equal to three-quarters of the
reduced amount payable during the Participant’s lifetime, the last monthly payment being for
the month in which the Beneficiary’s death occurs.

If the Beneficiary’s death occurs prior to the death of the Participant, then commencing
with the month following the month in which the Beneficiary’s death occurs, the Participant
shall receive an increase in the amount of his monthly benefit for the remainder of his or
her remaining lifetime equal to the amount that would be payable under a Single Life
Annuity, the last monthly payment being for the month in which the Participant’s death
occurs.

	(d)	 	Pop-Up 50% Joint and Survivor Annuity. The Participant shall receive a reduced monthly
retirement benefit payable for his lifetime, the last monthly payment being for the month in
which his death occurs. If the Participant’s Beneficiary survives him, then commencing with
the month following the month in which the Participant’s death occurs, his Beneficiary shall
receive a monthly benefit for his or her remaining lifetime equal to one-half of the reduced
amount payable during the Participant’s lifetime, the last monthly payment being for the month
in which the Beneficiary’s death occurs.

If the Beneficiary’s death occurs prior to the death of the Participant, then commencing
with the month following the month in which the Beneficiary’s death occurs, the Participant
shall receive an increase in the amount of his monthly benefit for the

-27-

 

remainder of his or her remaining lifetime equal to the amount that would be payable under a
Single Life Annuity, the last monthly payment being for the month in which the Participant’s
death occurs.

	(e)	 	Pop-Up 25% Joint and Survivor Annuity. The Participant shall receive a reduced monthly
retirement benefit payable for his lifetime, the last monthly payment being for the month in
which his death occurs. If the Participant’s Beneficiary survives him, then commencing with
the month following the month in which the Participant’s death occurs, his Beneficiary shall
receive a monthly benefit for his or her remaining lifetime equal to one-quarter of the
reduced amount payable during the Participant’s lifetime, the last monthly payment being for
the month in which the Beneficiary’s death occurs.

If the Beneficiary’s death occurs prior to the death of the Participant, then commencing
with the month following the month in which the Beneficiary’s death occurs, the Participant
shall receive an increase in the amount of his monthly benefit for the remainder of his or
her remaining lifetime equal to the amount that would be payable under a Single Life
Annuity, the last monthly payment being for the month in which the Participant’s death
occurs.

	(g)	 	Ten-Year Certain and Life Annuity. The Participant shall receive a reduced monthly
retirement benefit payable for his lifetime, the last monthly payment being for the month in
which his death occurs. If the Participant’s death occurs prior to the end of the ten-year
period commencing with his Annuity Starting Date, his Beneficiary shall receive a continued
monthly benefit equal to such reduced amount for the remainder of such ten-year period. If
the Participant’s Beneficiary dies after becoming eligible to receive a benefit hereunder, but
prior to the end of the ten-year period, the unpaid monthly benefit shall be paid to the
Beneficiary designated by the Participant to receive payment in such event or, if none, in
accordance with the provisions of Section 9.3. If the Participant’s Beneficiary dies while
the Participant is living and before 120 payments have been made, the Participant may name
another Beneficiary.

	(h)	 	Social Security Adjustment Annuity. The Participant shall receive an increased monthly
retirement benefit prior to a specified date, which shall be the first day of the month
following the date the Participant reaches age 62 or age 65, as elected by the Participant,
and a reduced monthly retirement benefit thereafter, so that the adjusted benefit, when
combined with the Primary Insurance Benefits under the Federal Social Security Act expected to
become payable as of such specified date, will produce, as nearly as practicable, a level
monthly income, the last monthly payment being for the month in which the Participant’s death
occurs.

The Participant may elect the Social Security Adjustment Annuity in conjunction with the
Single Life Annuity optional form of payment, one of the Joint and Survivor Annuity optional
forms of payment or in conjunction with Ten-Year Certain and Life Annuity optional form of
payment. The Participant’s shall receive a reduced monthly retirement benefit in accordance
with the Joint and Survivor or Certain and Life Annuity option, in addition to the
adjustment for Social Security described in the previous paragraph.

-28-

 

The Social Security Adjustment Annuity is not available in conjunction with any of the
Pop-Up Joint and Survivor optional forms of payment.

Notwithstanding any other provision of the Plan to the contrary, distribution under an optional
form of payment shall be made in accordance with Code Section 401(a)(9) and regulations issued
thereunder, including the minimum distribution incidental benefit requirement. If a Participant
designates a person other than his Spouse as his Beneficiary under an optional form of payment, and
if payments under the optional form elected would not meet the minimum distribution incidental
benefit requirement, the election shall be ineffective and benefit payments, if any, shall be made
under the normal form of payment provided in Section 9.1, unless the Participant elects another
optional form of payment provided under the Plan prior to his Annuity Starting Date.

	9.3	 	Designation of Beneficiary and Beneficiary in Absence of Designated Beneficiary

A Participant’s Beneficiary may be any individual or, in the case of a Beneficiary to receive
payments for the remainder of a period-certain under the form of payment elected by the
Participant, any individuals, trust, or estate selected by the Participant. A Participant’s
designation of a Beneficiary is subject to the spousal consent requirements of Section 9.6.

If payment is to be made to a Participant’s surviving Beneficiary for the remainder of a
period-certain under the form of payment elected by the Participant and no Beneficiary survives or
the Participant has not designated a Beneficiary, the Participant’s Beneficiary shall be the
Participant’s surviving Spouse or, if none, the Participant’s surviving children in equal shares
or, if none, the Participant’s estate.

	9.4	 	Notice Regarding Forms of Payment

The Administrator shall provide a Participant with a written description of (i) the terms and
conditions of the normal forms of payment provided in Section 9.1, (ii) the optional forms of
payment provided in Section 9.2 and their relative value in comparison to one or both of the normal
forms, (iii) the Participant’s right to waive the normal form of payment provided in Section 9.1
and to elect an optional form of payment and the effect thereof, (iv) the rights of the
Participant’s Spouse with respect to the Qualified Joint and Survivor Annuity form of payment, and
(v) the Participant’s right to revoke a waiver of the normal form of payment or to change his
election of an option and the effect thereof. The explanation shall notify the Participant of his
right to defer payment of his retirement benefit under the Plan until his Normal Retirement Date,
or such later date as may be provided under the Plan, and the consequences if the Participant does
not elect to postpone payment. The Administrator shall provide such explanation no fewer than 30
days and no more than 90 days before a Participant’s Annuity Starting Date.

Notwithstanding the foregoing, a Participant’s Annuity Starting Date may occur fewer than 30 days
after receipt of such explanation if the Administrator clearly informs the Participant:

-29-

 

	(a)	 	of his right to consider his form of payment election for a period of at least 30 days
following his receipt of the explanation;
	 
	(b)	 	the Participant, after receiving the explanation, affirmatively elects an early Annuity
Starting Date, with his Spouse’s written consent, if necessary;
	 
	(c)	 	the Participant’s Annuity Starting Date occurs after the date the explanation is provided to
him;
	 
	(d)	 	the election period described in Section 9.5 does not end until the later of his Annuity
Starting Date or the expiration of the seven-day period beginning the day after the date the
explanation is provided to him; and
	 
	(e)	 	actual payment of the Participant’s retirement benefit does not begin to the Participant
before such revocation period ends.

	9.5	 	Election Period

A Participant may waive or revoke a waiver of the normal form of payment provided in Section 9.1
and elect, modify, or change an election of an optional form of payment provided in Section 9.2 by
written notice delivered to the Administrator at any time during the election period; provided,
however, that no waiver of the normal form of payment and election of an optional form of payment
shall be valid unless the Participant has received the written explanation described in Section
9.4. Subject to the provisions of Section 9.4 extending a Participant’s election period under
certain circumstances, a Participant’s “election period” means the 90-day period ending on his
Annuity Starting Date.

The form in which a Participant shall receive payment of his retirement benefit shall be determined
upon the later of his Annuity Starting Date or the date his election period ends, based upon any
waiver and election in effect on such date. Except as otherwise specifically provided in the Plan,
in no event shall the form in which a Participant’s retirement benefit is paid be changed on or
after such date.

	9.6	 	Spousal Consent Requirements

A married Participant’s waiver of the normal Qualified Joint and Survivor Annuity form of payment
and his election, modification, or change of an election of an optional form of payment must
include the written consent of the Participant’s Spouse. A Participant’s Spouse shall be deemed to
have given written consent to the Participant’s waiver and election if the Participant establishes
to the satisfaction of a Plan representative that such consent cannot be obtained because of any of
the following circumstances:

	(a)	 	the Spouse cannot be located,
	 
	(b)	 	the Participant is legally separated or has been abandoned within the meaning of local law,
and the Participant has a court order to that effect, or

-30-

 

	(c)	 	other circumstances set forth in Code Section 401(a)(11) and regulations issued thereunder.

Notwithstanding the foregoing, written spousal consent shall not be required if the Participant
elects an optional form of payment that is a Qualified Joint and Survivor Annuity.

Any written spousal consent given pursuant to this Section shall acknowledge the effect of the
waiver of the Qualified Joint and Survivor Annuity form of payment and of the election of an
optional form of payment, shall specify the optional form of payment selected by the Participant
and that such form may not be changed (except to a Qualified Joint and Survivor Annuity) without
written spousal consent, shall specify any Beneficiary designated by the Participant and that such
Beneficiary may not be changed without written spousal consent, and shall be witnessed by a Plan
representative or a notary public. Any written consent given or deemed to be given by a
Participant’s Spouse shall be irrevocable and shall be effective only with respect to such Spouse
and not with respect to any subsequent Spouse.

	9.7	 	Death Prior to Annuity Starting Date

Notwithstanding any other provision of the Plan to the contrary, should a Participant die prior to
his Annuity Starting Date neither he nor any person claiming under or through him shall be entitled
to any retirement benefit under the Plan; and no benefit shall be paid under the Plan with respect
to such Participant (except any survivor benefit payable under the provisions of Article X).

	9.8	 	Effect of Reemployment on Form of Payment

Notwithstanding any other provision of the Plan, if a former Employee is reemployed, his prior
election of a form of payment hereunder shall become ineffective, except to the extent that the
Participant’s Annuity Starting Date occurred prior to such reemployment and such prior Annuity
Starting Date is preserved with respect to a portion or all of the Participant’s retirement
benefit.

Article X

Survivor Benefits

	10.1	 	Eligibility for Qualified Preretirement Survivor Annuity

If a Participant dies before his Annuity Starting Date, his surviving Spouse shall be eligible for
a Qualified Preretirement Survivor Annuity if all of the following requirements are met on the
Participant’s date of death:

	(a)	 	the Participant has a Spouse; and

	(b)	 	the Participant has a vested Accrued Benefit.

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	10.2	 	Amount of Qualified Preretirement Survivor Annuity

The monthly amount of the Qualified Preretirement Survivor Annuity payable to a surviving Spouse
shall be equal to the survivor benefit that would have been payable to the Spouse if the
Participant had:

	(a)	 	separated from service on the earlier of his actual separation from service date or his date
of death; and

	(b)	 	survived to the date as of which payment of the Qualified Preretirement Survivor Annuity to
his surviving Spouse commences; and

	(c)	 	elected to commence retirement benefits as of the date described in paragraph (b) above in
the form of a 50 percent Qualified Joint and Survivor Annuity; and

	(d)	 	died on his Annuity Starting Date.

Notwithstanding the foregoing, if prior to a Participant’s death the Participant elected an
optional form of payment in accordance with the provisions of Article IX that is a Qualified Joint
and Survivor Annuity, for purposes of determining the amount of the Qualified Preretirement
Survivor Annuity, the optional form of payment elected by the Participant shall be substituted for
the 50 percent Qualified Joint and Survivor Annuity in paragraph (c) above.

	10.3	 	Payment of Qualified Preretirement Survivor Annuity

Payment of a Qualified Preretirement Survivor Annuity to a Participant’s surviving Spouse shall
commence as of the first day of the month following (a) or (b) below, as applicable:

	(a)	 	if the Participant dies (1) while employed by the Employer and after (i) completing at least
20 years of Service or (ii) completing at least 5 years of Service and reaching age 50 or (2)
while receiving benefits under the LTD Plan and after competing at least 10 years of Service,
the month in which the Participant dies; or

	(b)	 	if the Participant does not satisfy the requirements of (a), the later of (1) the month in
which the Participant dies or (2) the month in which the Participant would have attained
earliest retirement age (as defined herein) under the Plan.

Notwithstanding the foregoing, a Participant’s surviving Spouse may elect to defer commencement of
payment of the Qualified Preretirement Survivor Annuity to a date no later than the Participant’s
Normal Retirement Date. If a Participant’s surviving Spouse dies before the date as of which
payment of the Qualified Preretirement Survivor Annuity is to commence to such Spouse, no Qualified
Preretirement Survivor Annuity shall be payable hereunder.

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Payment of a Qualified Preretirement Survivor Annuity shall continue to a Participant’s surviving
Spouse for such Spouse’s lifetime, the last monthly payment being for the month in which the
Spouse’s death occurs.

For purposes of this Article, a Participant’s “earliest retirement age” means the earliest age at
which the Participant could have elected to commence retirement benefits under the Plan if he had
survived, but based on his years of Service on his date of death.

Article XI

General Provisions & Limitations Regarding Benefits

	11.1	 	Suspension of Benefits for Rehired Retired Participants

Except as otherwise provided in Sections 11.2, 11.7, and 11.8, if a retired or former Employee is
reemployed by an Employer, any benefits payable to such Participant under the Plan shall be
suspended during the period of such reemployment, provided that the notice requirements of
Department of Labor Regulations Section 2530.203-3(b)(4) are met, if applicable, unless such
Participant or retired or former Employee elects to receive an early retirement benefit while
employed, as provided in Section 6.1. If a retired or former Employee whose Annuity Starting Date
occurred prior to reemployment again becomes eligible to receive benefits under the Plan, the
amount of benefit payable to the Participant shall be reduced to its Actuarial Equivalent to
reflect the value of any benefit payments made to the Participant prior to his reemployment.

	11.2	 	Exception to Suspension of Benefits Rule

Notwithstanding any other provision of the Plan to the contrary, a retired former Employee who is
reemployed by an Employer or an Affiliated Company after his Annuity Starting Date shall be
eligible for a retirement benefit for any month in which he is employed for fewer than 40 hours or
such other amount of time that does not constitute ERISA Section 203(a)(3)(B) service. The Plan
may provide an Actuarial Equivalent increase to the benefit for any such month in lieu of stopping
and starting payments to the Participant on a month-by-month basis.

	11.3	 	Non-Alienation of Retirement Rights or Benefits

Except as provided in Code Section 401(a)(13)(B) (relating to qualified domestic relations orders),
Code Sections 401(a)(13)(C) and (D) (relating to offsets ordered or required under a criminal
conviction involving the Plan, a civil judgment in connection with a violation or alleged violation
of fiduciary responsibilities under ERISA, or a settlement agreement between the Participant and
the Department of Labor in connection with a violation or alleged violation of fiduciary
responsibilities under ERISA), Section 1.401(a)-13(b)(2) of the Treasury Regulations (relating to
Federal tax levies), or as otherwise required by law, no benefit under the Plan at any time shall
be subject in any manner to anticipation, alienation, assignment (either at law or in equity),
encumbrance, garnishment, levy, execution, or other legal or equitable process; and no person shall
have the power in any manner to anticipate, transfer, assign (either at law or in

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equity), alienate or subject to attachment, garnishment, levy, execution, or other legal or
equitable process, or in any way encumber his benefits under the Plan, or any part thereof, and any
attempt to do so shall be void.

	11.4	 	Payment of Benefits to Others

If any person to whom a retirement benefit is payable is unable to care for his affairs because of
illness or accident, any payment due (unless prior claim therefore shall have been made by a duly
qualified guardian or other legal representative) may be paid to the spouse, parent, brother or
sister of such person, or any other individual deemed by the Administrator to be maintaining or
responsible for the maintenance of such person. The monthly payment of a retirement benefit to a
person for the month in which he dies shall, if not paid to such person prior to his death, be paid
to his spouse, parent, brother, sister, or estate as the Administrator shall determine. Any
payment made in accordance with the provisions of this Section shall be a complete discharge of any
liability of the Plan with respect to the benefit so paid.

	11.5	 	Payment of Small Benefits; Deemed Cashout

If the Actuarially Equivalent present value of any retirement benefit payable under Section 5.1,
6.1, or 7.2 or any survivor benefit is $5,000 or less, such Actuarially Equivalent present value
shall be paid to the Participant, or his Beneficiary, if applicable, in a single sum payment, in
lieu of all other benefits under the Plan, as soon as practicable following the date of the
Participant’s retirement, death, or other termination of employment and he shall cease to be a
Participant under the Plan as of the date of such payment.

Notwithstanding any other provision of this Section, if the Actuarially Equivalent present value of
any retirement benefit payable under the Plan to a Participant is greater than $1,000, such
Actuarially Equivalent present value shall not be paid to the Participant in a single sum payment
prior to the later of (i) the date the Participant attains age 62 or (ii) the Participant’s Normal
Retirement Date, unless the Participant consents in writing to such distribution. The provisions of
this paragraph shall not apply to a distribution to a Participant’s surviving Spouse or an
alternate payee under a qualified domestic relations order.

If the nonforfeitable Accrued Benefit of a Participant is zero, such Participant shall be deemed to
have received distribution of his entire vested Accrued Benefit under the Plan, in lieu of all
other benefits under the Plan, as of the date of his termination of employment with his Employer
and all Affiliated Companies and he shall cease to be a Participant under the Plan as of such date.

A former Participant who received a distribution hereunder, other than a deemed distribution,
because of his retirement or other termination of employment shall lose the Credited Service with
which he was credited at the time of his prior termination of employment or retirement. If such
former Participant is reemployed, such prior Credited Service shall not be reinstated.

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	11.6	 	Direct Rollovers

Notwithstanding any other provision of the Plan to the contrary, in lieu of receiving a single sum
payment as provided in Section 11.5, a “qualified distributee” may elect in writing, in accordance
with rules prescribed by the Sponsor, to have any portion or all of such payment that is an
“eligible rollover distribution” paid directly by the Plan to the “eligible retirement plan”
designated by the “qualified distributee”; provided, however, that this provision shall not apply
if the total distribution is less than $200 and that a “qualified distributee” may not elect this
provision with respect to any partial distribution that is less than $500. Any such payment by the
Plan to another “eligible retirement plan” shall be a direct rollover. For purposes of this
Section, the following terms have the following meanings:

	(a)	 	An “eligible retirement plan” means an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), a qualified trust described in Code Section 401(a) that
accepts rollovers, an annuity contract described in Code Section 403(b), or an eligible plan
under Code Section 457(b) which is maintained by a state, political subdivision of a state, or
any agency or instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such plan from the Plan.

	(b)	 	An “eligible rollover distribution” means any distribution of all or any portion of a
Participant’s Accrued Benefit or a distribution of all or any portion of a survivor benefit
under Article X; provided, however, that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic payments made not
less frequently than annually for the life or life expectancy of the qualified distributee or
the joint lives or joint life expectancies of the qualified distributee and the qualified
distributee’s designated beneficiary, or for a specified period of ten years or more; and any
distribution to the extent such distribution is required under Code Section 401(a)(9).

	(c)	 	A “qualified distributee” means a Participant, his surviving Spouse, his Spouse or former
Spouse who is an alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), or, on and after January 1, 2008, a Participant’s non-spouse beneficiary
who is his designated beneficiary within the meaning of Code Section 401(a)(9)(E).

	11.7	 	Limitations on Commencement

Notwithstanding any other provision of the Plan to the contrary, payment of a Participant’s
retirement benefit shall commence not later than the earlier of:

	(a)	 	the 60th day after the end of the Plan Year in which occurs the Participant’s Normal
Retirement Date, the tenth anniversary of the date on which he first became a Participant, or
the Participant’s retirement or other termination of employment, whichever is latest; or

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	(b)	 	his Required Beginning Date.

Distributions required to commence under this Section shall be made in accordance with Code Section
401(a)(9) and regulations issued thereunder, as described in Addendum A to the Plan. If payment of
a Participant’s retirement benefit does not commence until his Required Beginning Date, his
Required Beginning Date shall be considered his Annuity Starting Date for all purposes of the Plan.

Subject to the requirements of Code Sections 401(a)(9) and 411(d)(6), no benefit payments shall
commence under the Plan until the Participant, or his surviving Spouse, if applicable, makes
written application therefore on a form satisfactory to the Administrator. If the amount of a
monthly retirement benefit payable to a Participant cannot be determined for any reason (including
lack of information as to whether the Participant is still living or his marital status) on the
date payment of such benefit is to commence under this Section, payment shall be made retroactively
to such date no later than 60 days after the date on which the amount of such monthly retirement
benefit can be determined.

	11.8	 	Post Age 70 1/2 Payments

Notwithstanding any other provision of the Plan to the contrary, a Participant who attains age
70 1/2 on or after December 31, 1998, will receive distribution of his retirement benefit beginning
as of his Required Beginning Date.

A Participant who is receiving retirement benefits under the Plan while employed by an Employer or
an Affiliated Company because his required beginning date occurred under the provisions of the Plan
as in effect prior to January 1, 1998, shall continue to receive retirement benefits hereunder.

A Participant who is a five percent owner (as defined in Code Section 416(i)) with respect to the
Plan Year ending with or within the calendar year in which he attains age 70 1/2 and who continues
employment with an Employer or any Affiliated Company shall receive distribution of his retirement
benefit beginning as of the April 1 of the calendar year following the calendar year in which he
attains age 70 1/2.

	11.9	 	Offset to Accrual After Normal Retirement Date

The amount of benefit accrued by an Employee for each year of Credited Service that he completes
after the date retirement income becomes payable to him by reasons other than his retirement or
termination of employment shall be reduced (but not below zero) by the Actuarial Equivalent of the
retirement benefits paid to the Employee for the period for which he accrues such year of Credited
Service.

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Article XII

Maximum Retirement Benefits

12.1 Definitions

For purposes of this Article, the following terms have the following meanings.

An “Affiliated Employer” means any corporation or business, other than an Employer, which
would be aggregated with an Employer for a relevant purpose under Code Section 414 as
modified by Code Section 415(h).

A Participant’s “Aggregate Annual Retirement Benefit” includes his Annual Retirement Benefit
and his annual retirement benefit, if any, under any and all other defined benefit plans
(whether or not terminated) maintained by an Employer or any Affiliated Employer. Effective
for Limitation Years beginning after December 31, 2001, for purposes of applying the
compensation limit in Code Section 415(b)(1)(B), a Participant’s Aggregate Annual Retirement
Benefit shall not include the Participant’s accrued benefit under a multiemployer plan, if
any.

A Participant’s “Annual Retirement Benefit” means the amount of retirement benefit
attributable to Employer contributions which is payable to him annually under the Plan. A
Participant’s Aggregate Annual Retirement Benefit includes his Annual Retirement Benefit and
his Annual Retirement Benefit, if any, under any and all other defined benefit plans
(whether or not terminated) maintained by an Employer or any Affiliated Employer.

The “Applicable Interest Rate” means the annual rate of interest on 30-year Treasury
securities for the second calendar month preceding the Plan Year in which the distribution
is made.

The “Applicable Mortality Table” means the table prescribed by the Secretary of the
Treasury, which shall be based on the prevailing commissioners’ standard table, described in
Code Section 807(d)(5)(A), used to determine reserves for group annuity contracts issued on
the date as of which present value is being determined (without regard to any other
subparagraph of Code Section 807(d)(5)). For any distribution with an Annuity Starting Date
prior to December 31, 2002, the Applicable Mortality Table is the table specified in Revenue
Ruling 95-6. For any distribution with an Annuity Starting Date on or after December 31,
2002, the Applicable Mortality Table is the table specified in Revenue Ruling 2001-62.

A Participant’s “Compensation” means his compensation as defined in IRS Regulations Section
1.415-2(d)(10); provided, however, that for Limitation Years beginning on and after January
1, 1998, Compensation includes any elective deferral, as defined in Code Section 402(g)(3),
and any amount contributed or deferred by the Employer at the Employee’s election that is
not includable in the Employee’s gross income by reason of

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Code Section 125 or 457; and provided, further, that for Limitation Years beginning on and
after January 1, 2001, Compensation includes any amount contributed or deferred by the
Employer at the Employee’s election that is not includable in the Employee’s gross income by
reason of Code Section 132(f)(4). Compensation does not include amounts received by a
Participant following termination of employment unless such amounts are paid before the
later of (1) the end of the Plan Year in which the Participant’s termination occurs or (2)
within 2 1/2 months of termination, such amounts would have been paid to the Participant in
the course of employment, and such amounts are (i) regular compensation for services by the
Participant or commissions, bonuses or other similar compensation that would be included in
compensation if paid period to termination, (ii) payments for accrued bona fide sick or
vacation leave that the Participant would have been able to use if the Participant’s
employment had continued, or (iii) amounts received from a non-qualified, unfunded deferred
compensation plan that would have been payable at the same time if the Participant had
continued employment, but only to the extent includable in gross income.

“Defined Benefit Plan” has the meaning given such term in Code Section 415(k).

The “Defined Benefit Compensation Limitation” for Limitation Years ending after December 31,
2001 means 100 percent of a Participant’s average Compensation for his highest three years.

The “Defined Benefit Dollar Limitation” for Limitation Years ending after December 31, 2001
means $160,000, as adjusted, effective January 1 of each year, under Code Section 415(d) in
such manner as the Secretary of Treasury shall prescribe, and payable in the form of a
straight life annuity. A limitation as adjusted under Code Section 415(d) will apply to
Limitation Years ending with or within the calendar year for which the adjustment applies.

The “Limitation Year” means the calendar year.

The “Maximum Permissible Benefit” is the lesser of the Defined Benefit Dollar Limitation or
the Defined Benefit Compensation Limitation (both adjusted where required, as provided in
(a) and, if applicable, in (b) or (c) or (d) below).

	 	(a)	 	If the Participant has fewer than 10 years of participation in the Plan, the
Defined Benefit Dollar Limitation shall be multiplied by a fraction, (i) the numerator
of which is the number of years (or part thereof) of participation in the Plan and (ii)
the denominator of which is 10. In the case of a Participant who has fewer than 10
years of service with the employer, the Defined Benefit Compensation Limitation shall
be multiplied by a fraction, (A) the numerator of which is the number of years (or part
thereof) of service with the employer and (B) the denominator of which is 10.
	 
	 	(b)	 	If the benefit of a Participant begins prior to age 62, the Defined Benefit
Dollar Limitation applicable to the Participant at such earlier age is an annual
benefit

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payable in the form of a straight life annuity beginning at the earlier age that is
the actuarial equivalent of the Defined Benefit Dollar Limitation applicable to the
Participant at age 62 (adjusted under (a) above, if required). The Defined Benefit
Dollar Limitation applicable at an age prior to age 62 is determined as the lesser
of (i) the actuarial equivalent (at such age) of the Defined Benefit Dollar
Limitation computed using the interest rate and mortality table (or other tabular
factor) specified in the definition of Actuarial Equivalent and (ii) the actuarial
equivalent (at such age) of the Defined Benefit Dollar Limitation computed using a
five percent interest rate and the Applicable Mortality Table. Any decrease in the
Defined Benefit Dollar Limitation determined in accordance with this paragraph (b)
shall not reflect a mortality decrement if benefits are not forfeited upon the death
of the Participant. If any benefits are forfeited upon death, the full mortality
decrement is taken into account.

	 	(c)	 	If the benefit of a Participant begins after the Participant attains age 65,
the Defined Benefit Dollar Limitation applicable to the Participant at the later age is
the annual benefit payable in the form of a straight life annuity beginning at the
later age that is actuarially equivalent to the Defined Benefit Dollar Limitation
applicable to the Participant at age 65 (adjusted under (a) above, if required). The
actuarial equivalent of the Defined Benefit Dollar Limitation applicable at an age
after age 65 is determined as (i) the lesser of the actuarial equivalent (at such age)
of the Defined Benefit Dollar Limitation computed using the interest rate and mortality
table (or other tabular factor) specified in the definition of Actuarial Equivalent and
(ii) the actuarial equivalent (at such age) of the Defined Benefit Dollar Limitation
computed using a five percent interest rate assumption and the Applicable Mortality
Table. For these purposes, mortality between age 65 and the age at which benefits
commence shall be ignored.
	 
	 	(d)	 	If (i) the Participant’s retirement benefit includes contributions made by the
Participant or rollover contributions or (ii) payment is to be made in a form other
than to the Participant for his life only or as a qualified joint and survivor annuity,
the Maximum Permissible Benefit shall be adjusted to an actuarially equivalent amount
determined using the following factors:

	 	(1)	 	If such form is not subject to the requirements of Code Section
417(e)(3), the following factors shall be used: (i) the Applicable Mortality
Table and (ii) an interest rate equal to the greater of five percent or the
rate specified in the definition of Actuarial Equivalent for purposes other
than calculating the value of a single sum payment.
	 
	 	(2)	 	If payment is to be made to the Participant in a form that is
subject to the requirements of Code Section 417(e)(3), the following factors
shall be used: (i) the Applicable Mortality Table and (ii) an interest rate
equal to the greater of the Applicable Interest Rate or the rate specified in
the definition of Actuarial Equivalent for purposes other than calculating the
value of a single sum payment. Notwithstanding the foregoing, for

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Limitation Years beginning on or after January 1, 2004, 5.5% shall be
substituted for the Applicable Interest Rate in the preceding sentence;
provided, however, that for a Participant receiving a distribution after
December 31, 2003 and before January 1, 2005, such substitution shall not
reduce the benefit payable to the Participant below the amount determined
using the Applicable Interest Rate in effect as of the last day of the last
Limitation Year beginning before January 1, 2004.

12.2 Maximum Limitation on Annual Benefits

The Aggregate Annual Retirement Benefit accrued or payable to a Participant may not at any time
within any Limitation Year exceed the Maximum Permissible Benefit. For purposes of applying the
limitations contained in this Section, benefit increases resulting from the increase in the
limitations under Code Section 415(b) effective for Limitation Years beginning after December 31,
2001 shall be provided only to those Employees participating in the Plan who have one Hour of
Service on or after the first day of the first Limitation Year ending after December 31, 2001.

12.3 Manner of Reduction

If the Participant’s Aggregate Annual Retirement Benefit exceeds the limitations specified in this
Article, the reduction in the amount of his Annual Retirement Benefit shall be equal to the amount
by which his Aggregate Annual Retirement Benefit exceeds the limitations of this Article multiplied
by a fraction, the numerator of which is his Annual Retirement Benefit (determined without regard
to this Article) and the denominator of which is his Aggregate Annual Retirement Benefit
(determined without regard to the limitations of this Article or any corresponding limitation in
any other defined benefit plan maintained by an Employer or any Affiliated Employer in which he
participates).

Article XIII

Pension Fund

13.1 Pension Fund

The Pension Fund is maintained by the Funding Agent for the Plan under a Funding Agreement with the
Sponsor. Subject to the provisions of Title IV of ERISA, benefits under the Plan shall be only
such as can be provided by the assets of the Pension Fund, and no liability for payment of benefits
shall be imposed upon the Employers or any Affiliated Company, or any of their officers, employees,
directors, or stockholders.

13.2 Contributions by the Employers

So long as the Plan continues, contributions will be made by the Employers at such times and in
such amounts as the Sponsor in its sole discretion shall from time to time determine, based on the

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advice of the Actuary and consistent with the funding policy for the Plan. Subject to the
provisions of Section 13.5, all such contributions shall be delivered to the Funding Agent for
deposit in the Pension Fund. Participants shall make no contributions under the Plan.

13.3 Expenses of the Plan

The expenses of administration of the Plan, including the expenses of the Administrator and fees of
the Funding Agent and any investment advisor, shall be paid from the Pension Fund, unless the
Sponsor or an Employer elects to make payment.

13.4 No Reversion

The Pension Fund shall be for the exclusive benefit of Participants and persons claiming under or
through them. All contributions pursuant to Section 13.2 hereof shall be based on the facts then
understood by the Sponsor, shall be conditioned upon the initial qualification of the Funding
Agreement and Plan under Code Sections 401 and 501(a), and, unless otherwise specified by the
Sponsor, shall be conditioned upon deductibility of the contributions under Code Section 404 in the
year for which such contributions were made. All such contributions shall be irrevocable and such
contributions as well as the Pension Fund, or any portion of the principal or income thereof, shall
never revert to or inure to the benefit of the Employers or any Affiliated Company except that:

	(a)	 	the residual amounts specified in Article XVI may be returned to the Employers;
	 
	(b)	 	any contributions which are made under a mistake of fact may be returned to the Employers
within one year after the contributions were made;
	 
	(c)	 	any contributions made for years during which the Funding Agreement and Plan were not
initially qualified under Code Sections 401 and 501(a) may be returned to the Employers within
one year after the date of denial of initial qualification, but only if an application for
determination was filed within the period of time prescribed under ERISA Section 403(c)(2)(B);
and
	 
	(d)	 	any contributions, which are not, in whole or in part, deductible under Code Section 404 for
the year for which they were made, may to the extent such contributions were not so
deductible, be returned to the Employers within one year after the disallowance of the
deduction.

The Sponsor shall determine, in its sole discretion, whether the contributions described above,
other than the residual amounts described in paragraph (a), shall be returned to an Employer. If
any such contributions are to be returned, the Sponsor shall so direct the Funding Agent, in
writing, no later than ten days prior to the last day upon which they may be returned.

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13.5 Forfeitures Not to Increase Benefits

Any forfeitures arising from the termination of employment or death of an Employee, or for any
other reason, shall be used to reduce Employer contributions to the Pension Fund, and shall not be
applied to increase the benefits any Participant otherwise would receive under the Plan at any time
prior to the termination of the Plan.

13.6 Change of Funding Medium

The Sponsor shall have the right to change at any time the means through which benefits under the
Plan shall be provided. No such change shall constitute a termination of the Plan or result in the
diversion to the Employers of any funds previously contributed in accordance with the Plan.

Article XIV

Administration

14.1 Authority of the Sponsor

The Sponsor, which shall be the administrator for purposes of ERISA and the plan administrator for
purposes of the Code, shall have all the powers and authority expressly conferred upon it herein
and further shall have the sole discretionary right, authority, and power to interpret and construe
the Plan, and to determine any disputes arising thereunder, subject to the provisions of Section
14.3. In exercising such powers and authority, the Sponsor at all times shall exercise good faith,
apply standards of uniform application, and refrain from arbitrary action. The Sponsor may employ
such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in
carrying out its duties hereunder. The Sponsor shall be a “named fiduciary” as that term is
defined in ERISA Section 402(a)(2). The Sponsor may:

	(a)	 	allocate any of the powers, authority, or responsibilities for the operation and
administration of the Plan (other than trustee responsibilities as defined in ERISA Section
405(c)(3)) among named fiduciaries; and
	 
	(b)	 	designate a person or persons other than a named fiduciary to carry out any of such powers,
authority, or responsibilities;

except that no allocation by the Sponsor of, or designation by the Sponsor with respect to, any of
such powers, authority, or responsibilities to another named fiduciary or a person other than a
named fiduciary shall become effective unless such allocation or designation shall first be
accepted by such named fiduciary or other person in a writing signed by it and delivered to the
Sponsor.

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14.2 Action of the Sponsor

Any act authorized, permitted, or required to be taken by the Sponsor under the Plan, which has not
been delegated in accordance with Section 14.1, may be taken by a majority of the members of the
board of directors of the Sponsor, either by vote at a meeting, or in writing without a meeting or
by the employee or employees of the Sponsor designated by the board of directors to carry out such
acts on behalf of the Sponsor. All notices, advice, directions, certifications, approvals, and
instructions required or authorized to be given by the Sponsor under the Plan shall be in writing
and signed by either (i) a majority of the members of the board of directors of the Sponsor, or by
such member or members as may be designated by an instrument in writing, signed by all the members
thereof, as having authority to execute such documents on its behalf, or (ii) the employee or
employees of the Sponsor who have the authority to act on behalf of the Sponsor.

14.3 Claims Review Procedure

Except to the extent that the provisions of any applicable collective bargaining agreement provide
another method of resolving claims for benefits under the Plan, the provisions of this Section
shall control with respect to the resolution of such claims.

Whenever the Administrator decides for whatever reason to deny, whether in whole or in part, a
claim for benefits filed by any person (hereinafter referred to as the “claimant”), the
Administrator shall transmit to the claimant a written notice of its decision, which notice shall
be written in a manner calculated to be understood by the claimant and shall contain a statement of
(i) the specific reasons for the denial of the claim, (ii) specific reference to pertinent Plan
provisions on which the denial is based, and (iii) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation of why such
information is necessary. The notice shall also include a statement advising the claimant that,
within 60 days of the date on which he receives such notice, he may obtain review of the decision
of the Administrator in accordance with the procedures hereinafter set forth.

Within the 60-day period beginning on the date the claimant receives notice regarding disposition
of his claim, the claimant or his authorized representative may request that the claim denial be
reviewed by filing with the Administrator a written request therefor, which request shall contain
the following information:

	(a)	 	the date on which the claimant’s request was filed with the Administrator; provided that the
date on which the claimant’s request for review was in fact filed with the Administrator shall
control in the event that the date of the actual filing is later than the date stated by the
claimant pursuant to this paragraph; and
	 
	(b)	 	the specific portions of the denial of his claim which the claimant requests the
Administrator to review; and

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	(c)	 	a statement by the claimant setting forth the basis upon which he believes the Administrator
should reverse its previous denial of his claim for benefits and accept his claim as made; and
	 
	(d)	 	any written material (offered as exhibits) which the claimant desires the Administrator to
examine in its consideration of his position as stated pursuant to paragraph (c) of this
Section.

Within 60 days of the date determined pursuant to paragraph (a) of this Section (or, if special
circumstances require an extension, within 120 days of that date; provided that the delay and the
reasons for the delay are communicated to the claimant within the initial 60-day period), the
Administrator shall conduct a full and fair review of its decision denying the claimant’s claim for
benefits and shall render its written decision on review to the claimant. The Administrator’s
decision on review shall be written in a manner calculated to be understood by the claimant and
shall specify the reasons and Plan provisions upon which the Administrator’s decision was based.

14.4 Qualified Domestic Relations Orders

The Administrator shall establish reasonable procedures to determine the status of domestic
relations orders and to administer distributions under domestic relations orders which are deemed
to be qualified orders. Such procedures shall be in writing and shall comply with the provisions
of Code Section 414(p) and regulations issued thereunder.

14.5 Indemnification

In addition to whatever rights of indemnification the members of the board of directors of the
Sponsor or any employee or employees to whom any power, authority, or responsibility is delegated
pursuant to Section 14.2, may be entitled under the articles of incorporation, regulations, or
bylaws of the Sponsor, under any provision of law, or under any other agreement, the Sponsor shall
satisfy any liability actually and reasonably incurred by any such person or persons, including
expenses, attorneys’ fees, judgments, fines, and amounts paid in settlement (other than amounts
paid in settlement not approved by the Sponsor), in connection with any threatened, pending, or
completed action, suit, or proceeding which is related to the exercise or failure to exercise by
such person or persons of any of the powers, authority, responsibilities, or discretion as provided
under the Plan and the Funding Agreement, or reasonably believed by such person or persons to be
provided thereunder, and any action taken by such person or persons in connection therewith, unless
the same is judicially determined to be the result of such person’s or persons’ gross negligence or
willful misconduct.

14.6 Actions Binding

Subject to the provisions of Section 14.3, any action taken by the Sponsor which is authorized,
permitted, or required under the Plan shall be final and binding upon the Employers, the Funding
Agent, all persons who have or who claim an interest under the Plan, and all third parties dealing
with the Employers or the Funding Agent.

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ArticleXV

Adoption By Other Entities

15.1 Adoption by Affiliated Companies

An Affiliated Company that is not an Employer may, with the consent of the Sponsor, adopt the Plan
and become an Employer hereunder by causing an appropriate written instrument evidencing such
adoption to be executed in accordance with the requirements of its organizational authority. Any
such instrument shall specify the effective date of the adoption. Unless otherwise specified in
the adoption instrument, for purposes of computing the Service and Final Average Pay of an Employee
who is in the employ of the Employer on the effective date of the adoption, employment with and
compensation from the Employer before the effective date of the adoption shall be treated as
employment with and compensation from an Employer. Unless otherwise specifically provided in the
adoption instrument, for purposes of computing the Credited Service of an Employee, only employment
with the Employer for periods on or after the effective date of the adoption shall be treated as
employment with an Employer. Any Employer shall undertake to contribute its appropriate share, as
determined by the Sponsor, of any contributions made to the Funding Agent hereunder.
Notwithstanding the foregoing, however, any adoption of the Plan by an Employer shall be subject to
the receipt of a determination from the Internal Revenue Service to the effect that with respect to
such Employer the Plan meets the requirements for qualification under Code Section 401(a), and,
should an adverse determination be issued by the Internal Revenue Service, the adoption of the Plan
by said Employer shall be null and void and of no effect whatsoever.

15.2 Effective Plan Provisions

An Employer who adopts the Plan shall be bound by the provisions of the Plan in effect at the time
of the adoption and as subsequently in effect because of any amendment to the Plan.

ArticleXVI

Amendment & Termination of Plan

16.1 Sponsor’s Right of Amendment

The Sponsor reserves the right at any time and from time to time, by means of a written instrument
executed in the name of the Sponsor by its duly authorized representatives, to amend or modify the
Plan and, to the extent provided therein, to amend or modify the Funding Agreement. No pension or
other benefit granted prior to the time of any amendment or modification of the Plan shall be
reduced, suspended, or discontinued as a result thereof, except to the extent necessary to enable
the Plan to meet the requirements for qualification under the Code or the requirements of any
governmental authority. Moreover, no such action shall operate

-45-

 

to recapture for the Employers any contributions made to the Pension Fund, except as provided in
Section 13.4 or Section 16.7.

16.2 Termination of the Plan

The Sponsor reserves the right, by means of a written instrument executed in the name of the
Sponsor by its duly authorized representatives, at any time to terminate the Plan. In the event of
termination, no further benefits shall accrue, no further contributions shall be made, except as
may be required under Title IV of ERISA or Code Section 412, and all assets remaining in the
Pension Fund, after provision has been made for payment of the expenses of administration and
liquidation in connection with the termination, shall be allocated by the Funding Agent upon the
advice of the Actuary, among the Participants and Beneficiaries of the Plan, in the following
manner and order of precedence:

	(a)	 	In the case of benefits payable as an annuity,

	 	(1)	 	in the case of the benefit of a Participant or Beneficiary which was in pay
status as of the beginning of the three-year period ending on the termination date of
the Plan, to each such benefit, based on the provisions of the Plan (as in effect
during the five-year period ending on such date) under which such benefit would be the
least; and
	 
	 	(2)	 	in the case of a Participant’s or Beneficiary’s benefit (other than a benefit
described in subparagraph (1) of this paragraph) which would have been in pay status as
of the beginning of such three-year period if the Participant had retired prior to the
beginning of such three-year period and if his benefits had commenced (in the normal
form of annuity under the Plan) as of the beginning of such period, to each such
benefit based on the provisions of the Plan (as in effect during the five-year period
ending on such date) under which such benefit would be the least.

For purposes of subparagraph (1) of this paragraph, the lowest benefit in pay status during
a three-year period shall be considered the three-year benefit in pay status for such
period.

	(b)	 	Next,

	 	(1)	 	to all other benefits, if any, of individuals under the Plan guaranteed under
Title IV of ERISA (determined without regard to ERISA Section 4022B(a)); and
	 
	 	(2)	 	to the additional benefits, if any, which would be determined under
subparagraph (1) of this paragraph if ERISA Section 4022(b)(5) did not apply.

For purposes of this paragraph, ERISA Section 4021 shall be applied without regard to
subsection (c) thereof.

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	(c)	 	Next, to all nonforfeitable benefits under the Plan.
	 
	(d)	 	Last, to all other benefits under the Plan.

Notwithstanding any other provision of the Plan to the contrary, other than Sections 16.3 through
16.8, the amount allocated to any Participant under this Section 16.2 shall be fully vested and
nonforfeitable. The Sponsor shall furnish all information reasonably required for the purposes of
making such allocations. The Funding Agent shall implement the allocations determined under this
Section among the persons for whose benefit such allocations are made through distribution of the
assets of the Pension Fund, through application of the amounts allocated to the purchase from an
insurance company of immediate or deferred annuities, or through creation of one or more new funds
for the purpose of distributing the assets of the Pension Fund (to the extent so allocated), or by
a combination of the foregoing.

	16.3	 	Adjustment of Allocation

The amount allocated under any paragraph of Section 16.2 with respect to any benefit shall be
properly adjusted for any allocations of assets with respect to that benefit under a prior
paragraph of Section 16.2.

	16.4	 	Assets Insufficient for Allocation

If the assets available for allocation under any paragraph of Section 16.2 (other than paragraphs
(c) and (d) are insufficient to satisfy in full the benefits of all individuals which are described
in that paragraph, the assets shall be allocated pro rata among such individuals on the basis of
the present value (as of the date of termination of the Plan) of their respective benefits
described in that paragraph.

	16.5	 	Assets Insufficient for Allocation Under Paragraph (c) of Section 16.2

This Section applies if the assets available for allocation under paragraph (c) of Section 16.2 are
not sufficient to satisfy in full the benefits of individuals described in such paragraph.

	(a)	 	If this Section applies, except as provided in paragraph (b), the assets shall be allocated
to the benefits of individuals described in paragraph (c) of Section 16.2 on the basis of the
benefits of individuals which would have been described in such paragraph under the Plan as in
effect at the beginning of the five-year period ending on the date of termination of the Plan.
	 
	(b)	 	If the assets available for allocation under paragraph (a) of this Section are sufficient to
satisfy in full the benefits described in such paragraph (without regard to this paragraph
(b)), then for purposes of paragraph (a), benefits of individuals described in such paragraph
shall be determined on the basis of the Plan as amended by the most recent Plan amendment
effective during such five-year period under which the assets available for allocation are
sufficient to satisfy in full the benefits of individuals described in paragraph (a), and any
assets remaining to be allocated under such 

-47-

 

	 	 	paragraph (a) on the basis of the Plan as amended
by the next succeeding Plan amendment effective during such period.

	16.6	 	Allocations Resulting in Discrimination

If the Secretary of the Treasury determines that the allocation made pursuant to this Article
(without regard to this Section) results in discrimination prohibited by Code Section 401(a)(4),
then the assets allocated under paragraphs (b)(2), (c), and (d) of Section 16.2 shall be
reallocated to the extent necessary to prevent the disqualification of the Plan (or any trust or
annuity contract under the Plan) under Code Section 401(a).

	16.7	 	Residual Assets

Subject to the provisions of Section 16.10 and of any applicable collective bargaining agreement,
any residual assets of the Plan shall be distributable to the Employers if:

	(a)	 	all liabilities of the Plan to Participants and their beneficiaries have been satisfied; and
	 
	(b)	 	the distribution does not contravene any provision of law.

	16.8	 	Meanings of Terms

The terms used in Sections 16.2 through 16.7 shall have, where required, the same meaning as the
same terms have as used in ERISA Section 4044; provided, however, that any term specifically
defined in the Plan shall retain its meaning as defined thereunder.

	16.9	 	Payments by the Funding Agent

The Funding Agent shall make the payments specified in a written direction of the Sponsor in
accordance with the provisions of Section 16.2 until the same shall be superseded by a further
written direction. The obligation of the Funding Agent to make any payment hereunder in all events
shall be limited to the amount of the Pension Fund at the time any such payment shall become due.

	16.10	 	Residual Assets Distributable to the Employers

Upon written notice from the Sponsor that any residual assets of the Plan are distributable to the
Employers in accordance with the provisions of Section 16.7, then the Funding Agent shall pay over
such residual assets, or an amount equal to the fair market value of that portion of such residual
assets which are not so paid, to the Employers; provided, however, that, under no circumstances or
conditions other than as set forth in this Section 16.10 and in Section 13.4, shall any
contribution of the Employers, or any portion of the proceeds or avails thereof, ever revert, be
paid, or inure to the benefit, directly or indirectly, of the Employers or any Affiliated Company;
nor shall any portion of the principal or the income from the Pension Fund ever be used for or
diverted to any purpose other than for the exclusive benefit of Participants and persons claiming
under or through them pursuant to the Plan.

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	16.11	 	Withdrawal of an Employer

Each Employer shall have the right to withdraw from the Plan by action in accordance with its
organizational authority, and by filing with the Sponsor written notice thereof, in which event the
Employer shall cease to be
an Employer for purposes of the Plan. An Employer shall be deemed automatically to withdraw from
the Plan in the event it completely discontinues contributions to the Plan or it ceases to be an
Affiliated Company.

If such withdrawal is for the purpose of establishing or merging with a separate plan which meets
the requirements for qualification under applicable provisions of the Code, the portion of the
assets of the Pension Fund which is applicable to the withdrawing Employer, as determined by the
Sponsor upon the advice of the Actuary, on a fair and equitable basis, taking into account the
contributions made by the Employer, benefit payments made with respect to its Employees and retired
and former Employees, and other relevant factors, shall be transferred to and become a part of the
trust fund or other financing medium maintained in connection with the separate plan, subject to
the limitations on merger, consolidation, or transfers of Plan assets set forth in Section 17.5.

Article XVII

Miscellaneous

	17.1	 	No Commitment as to Employment

Nothing contained herein shall be construed as a commitment or agreement on the part of any person
to continue his employment with his Employer, or as a commitment on the part of his Employer to
continue the employment, compensation, or benefits of any person for any period, and all employees
of an Employer shall remain subject to discharge, layoff, or disciplinary action to the same extent
as if the Plan had never been put into effect.

	17.2	 	Claims of Other Persons

Nothing in the Plan or Funding Agreement shall be construed as giving any Participant or any other
person, firm, or corporation, any legal or equitable right against the Employers or any Affiliated
Company, their officers, employees, or directors, or as against the Funding Agent, except such
rights as are specifically provided for in the Plan or the Funding Agreement or hereafter created
in accordance with the terms and provisions of the Plan.

	17.3	 	Governing Law

Except as provided under Federal law, the provisions of the Plan shall be governed by and construed
in accordance with the laws of the State of Texas.

-49-

 

	17.4	 	Nonforfeitability of Benefits Upon Termination or Partial Termination

Notwithstanding any other provision of the Plan, in the event of the termination or a partial
termination of the Plan, including the complete discontinuation of contributions to the Plan, the
rights of all Employees who are affected by such termination to benefits accrued to the date of
such termination, to the extent funded as of such date, shall be nonforfeitable.

	17.5	 	Merger, Consolidation, or Transfer of Plan Assets

The Plan shall not be merged or consolidated with any other plan, nor shall any of its assets or
liabilities be transferred to another plan, unless, immediately after such merger, consolidation,
or transfer of assets or liabilities, each Participant in the Plan would receive a benefit under
the Plan which is at least equal to the benefit he would have received immediately prior to such
merger, consolidation, or transfer of assets or liabilities (assuming in each instance that the
Plan had then terminated).

If another qualified plan merges or consolidates with the Plan, notwithstanding any other provision
of the Plan to the contrary, the forms of payment and other provisions that were available with
respect to benefits accrued immediately prior to the transfer or merger under such other qualified
plan and that may not be eliminated under Code Section 411(d)(6) shall continue to be available
under the Plan with respect to the benefit that the Participant would have received immediately
prior to such merger or consolidation.

	17.6	 	Funding Agreement

The Funding Agreement and the Pension Fund maintained thereunder shall be deemed to be a part of
the Plan as if fully set forth herein and the provisions of the Funding Agreement are hereby
incorporated by reference into the Plan.

	17.7	 	Benefit Offsets for Overpayments

If a Participant or Beneficiary receives benefits hereunder for any period in excess of the amount
of benefits to which he was entitled under the terms of the Plan as in effect for such period, such
overpayment shall be offset against current or future benefit payments, as applicable, until such
time as the overpayment is entirely recouped by the Plan.

	17.8	 	Internal Revenue Requirements

Notwithstanding any other provision of the Plan to the contrary, to conform to the requirements of
U.S. Treasury Regulations, the benefit payable under the Plan shall be subject to the following
limitations:

	(a)	 	If the Plan is terminated, the benefit of any Highly Compensated Employee shall be limited to
a benefit that is nondiscriminatory under Code Section 401(a)(4).

-50-

 

	(b)	 	The annual payments in any one year to any of the 25 Highly Compensated Employees with the
greatest compensation (hereinafter referred to as a “restricted employee”) in the current or
any prior year shall not exceed an amount equal to the payments that would be made on behalf
of the restricted employee under (1) a straight life annuity that is the Actuarial Equivalent
of the restricted employee’s Accrued Benefit and other benefits to which the restricted
employee is entitled under the Plan (other than a Social Security supplement), and (2) the
amount of the payments the restricted employee is entitled to receive under a Social Security
supplement. For purposes of this paragraph, “benefit” includes, among other benefits, loans
in excess of the amounts set forth in Code Section 72(p)(2)(A), any periodic income, any
withdrawal values payable to a living employee, and any death benefits not provided for by
insurance on the restricted employee’s life. The foregoing provisions of this paragraph shall
not apply, however, if:

	 	(1)	 	After payment to a restricted employee of all benefits payable to the restricted
employee under the Plan, the value of Plan assets equals or exceeds 110 percent of the
value of “current liabilities” as defined in Code Section 412(l)(7) (each value being
determined as of the same date in accordance with applicable Treasury Regulations);
	 
	 	(2)	 	The value of the benefits payable under the Plan to or for a restricted employee
is less than one percent of the value of current liabilities before distribution; or
	 
	 	(3)	 	The value of benefits payable under the Plan to or for a restricted employee does
not exceed the amount described in Code Section 411(a)(11)(A).

	17.9	 	Veterans Reemployment Rights

Notwithstanding any other provision of the Plan to the contrary, contributions, benefits, and
service credit with respect to qualified military service shall be provided in accordance with Code
Section 414(u).

*     *     *

-51-

 

     Executed 
this 12th day of November, 2007.

	 	 	 	 	 	 	 
	 	 	Sterling Chemicals, Inc.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Richard K. Crump	 	 
	 

	 	 	 	 

	 	 
	 

	 	Printed Name:	 	Richard K. Crump 	 	 
	 

	 	 	 	 
 	 	 
	 

	 	Title:	 	President and Chief Executive
Officer 	 	 
	 

	 	 	 	 

	 	 

Important Note

Prudential Financial, its contractors, and any employees of Prudential Financial or its contractors
cannot provide you with legal advice in connection with the execution of this document. Prior to
execution of this document, you should consult your attorney on whether this document is
appropriate for you.

-52-

 

Addendum A

This Addendum to the Plan is adopted to comply with final and temporary regulations issued under
Code Section 401(a)(9).

Section I

Definitions

	1.1	 	Definitions

For purposes of this Addendum the following terms have the following meanings. Except as otherwise
specifically provided herein, any term defined in Section 1.1 of the Plan has the meaning given
such term in such Section.

A Participant’s “designated beneficiary” means the individual who is designated as the
Participant’s Beneficiary under the Plan and is the designated beneficiary under Code Section
401(a)(9) and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

A “distribution calendar year” means a calendar year for which a minimum distribution is required.
For distributions beginning before the Participant’s death, the first “distribution calendar year”
is the calendar year immediately preceding the calendar year which contains the Participant’s
“required beginning date”. For distributions beginning after the Participant’s death, the first
“distribution calendar year” is the calendar year in which distributions are required to begin
under Section 3.2 of this Addendum.

A Participant’s or Beneficiary’s “life expectancy” means his life expectancy as computed by use of
the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations.

A Participant’s “required beginning date” means his Required Beginning Date as defined in Section
1.1 of the Plan.

Section II

General Rules

	2.1	 	Effective Date

The provisions of this Addendum will apply for purposes of determining required minimum
distributions for calendar years beginning with the 2003 calendar year.

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	2.2	 	Precedence

The requirements of this Addendum will take precedence over any inconsistent provisions of the
Plan.

	2.3	 	Requirements of Treasury Regulations Incorporated

All distributions required under this Addendum will be determined and made in accordance with the
Treasury Regulations under Code Section 401(a)(9).

	2.4	 	TEFRA Section 242(b)(2) Elections

Notwithstanding the other provisions of this Addendum, other than Section 2.3, distributions may be
made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act (“TEFRA”) and the provisions of the Plan that relate to
Section 242(b)(2) of TEFRA.

Section III

Time and Manner of Distribution

	3.1	 	Required Beginning Date

A Participant’s entire interest will be distributed, or begin to be distributed, to the Participant
no later than the Participant’s required beginning date.

	3.2	 	Death of Participant Before Distributions Begin

If a Participant dies before distributions begin, the Participant’s entire interest will be
distributed, or begin to be distributed, no later than as follows:

	(a)	 	If the Participant’s surviving Spouse is the Participant’s sole designated beneficiary, then
distributions to the surviving Spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the Participant died, or by December 31 of
the calendar year in which the Participant would have attained age 70 1/2, if later.
	 
	(b)	 	If the Participant’s surviving Spouse is not the Participant’s sole designated beneficiary,
then distributions to the designated beneficiary will begin by December 31 of the calendar
year immediately following the calendar year in which the Participant died.
	 
	(c)	 	If there is no designated beneficiary as of September 30 of the year following the year of
the Participant’s death, the Participant’s entire interest will be distributed by December 31
of the calendar year containing the fifth anniversary of the Participant’s death.

-54-

 

	(d)	 	If the Participant’s surviving Spouse is the Participant’s sole designated beneficiary and
the surviving Spouse dies after the Participant but before distributions to the surviving
Spouse begin, this Section 3.2, other than Section 3.2(a), will apply as if the surviving
Spouse were the Participant.

For purposes of this Section 3.2 and Section VI, distributions are considered to begin on the
Participant’s required beginning date (or, if Section 3.2(d) applies, the date distributions are
required to begin to the surviving
Spouse under Section 3.2(a)). If annuity payments irrevocably commence to a Participant before the
Participant’s required beginning date (or to the Participant’s surviving Spouse before the date
distributions are required to begin to the surviving Spouse under Section 3.2(a)), the date
distributions are considered to begin is the date distributions actually commence.

	3.3	 	Form of Distribution

Unless a Participant’s interest is distributed in the form of an annuity purchased from an
insurance company or in a single sum on or before the required beginning date, as of the first
distribution calendar year, distributions will be made in accordance with Sections IV, V and VI of
this Addendum. If a Participant’s interest is distributed in the form of an annuity purchased from
an insurance company, distributions thereunder will be made in accordance with the requirements of
Code Section 401(a)(9) and the Treasury Regulations. Any part of a Participant’s interest that is
in the form of an individual account described in Code Section 414(k) will be distributed in a
manner satisfying the requirements of Code Section 401(a)(9) and the Treasury Regulations that
apply to individual accounts.

Section IV

Determination of Amount To Be Distributed Each Year

	4.1	 	General Annuity Requirements

If a Participant’s interest is paid in the form of annuity distributions under the Plan, payments
under the annuity will satisfy the following requirements:

	(a)	 	the annuity distributions will be paid in periodic payments made at intervals not longer than
one year;
	 
	(b)	 	the distribution period will be over a life (or lives) or over a period certain not longer
than the period described in Section V or VI;
	 
	(c)	 	once payments have begun over a period certain, the period certain will not be changed even
if the period certain is shorter than the maximum permitted;

-55-

 

	(d)	 	payments will either be nonincreasing or increase only as follows:

	 	(1)	 	by an annual percentage increase that does not exceed the annual percentage
increase in a cost-of-living index that is based on prices of all items and issued by
the Bureau of Labor Statistics;
	 
	 	(2)	 	to the extent of the reduction in the amount of the Participant’s payments to
provide for a survivor benefit upon death, but only if the Beneficiary whose life was
being used to determine the distribution period described in Section V dies or is no
longer the Participant’s Beneficiary pursuant to a qualified domestic relations order
within the meaning of Code Section 414(p);
	 
	 	(3)	 	to provide cash refunds of accumulated contributions upon the Participant’s
death; or
	 
	 	(4)	 	to pay increased benefits that result from a Plan amendment.

	4.2	 	Amount Required to be Distributed by Required Beginning Date

The amount that must be distributed on or before a Participant’s required beginning date (or, if
the Participant dies before distributions begin, the date distributions are required to begin under
Section 3.2(a) or (b)) is the payment that is required for one payment interval. The second
payment need not be made until the end of the next payment interval even if that payment interval
ends in the next calendar year. Payment intervals are the periods for which payments are received,
e.g., bi-monthly, monthly, semi-annually, or annually. All of the Participant’s benefit accruals
as of the last day of the first distribution calendar year will be included in the calculation of
the amount of the annuity payments for payment intervals ending on or after the Participant’s
required beginning date.

	4.3	 	Additional Accruals After First Distribution Calendar Year

Any additional benefits accruing to a Participant in a calendar year after the first distribution
calendar year will be distributed beginning with the first payment interval ending in the calendar
year immediately following the calendar year in which such amount accrues.

Section V

Requirements For Annuity Distributions

That Commence During Participant’s Lifetime

	5.1	 	Joint Life Annuities Where the Beneficiary Is Not the Participant’s Spouse

If a Participant’s interest is being distributed in the form of a joint and survivor annuity for
the joint lives of the Participant and a non-Spouse Beneficiary, annuity payments to be made on or
after the Participant’s required beginning date to the designated beneficiary after the
Participant’s

-56-

 

death must not at any time exceed the applicable percentage of the annuity payment
for such period that would have been payable to the Participant using the table set forth in Q&A-2
of Section 1.401(a)(9)-6T of the Treasury Regulations. If the form of distribution combines a
joint and survivor annuity for the joint lives of the Participant and a non-Spouse Beneficiary and
a period certain annuity, the requirement in the preceding sentence will apply to annuity payments
to be made to the designated beneficiary after the expiration of the period certain.

	5.2	 	Period Certain Annuities

Unless the Participant’s Spouse is the sole designated beneficiary and the form of distribution is
a period certain and no life annuity, the period certain for an annuity distribution commencing
during the Participant’s lifetime may not exceed the applicable distribution period for the
Participant under the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury
Regulations for the calendar year that contains the Annuity Starting Date. If the Annuity Starting
Date precedes the year in which the Participant reaches age 70, the applicable distribution period
for the Participant is the distribution period for age 70 under the Uniform Lifetime Table set
forth in Section 1.401(a)(9)-9 of the Treasury Regulations plus the excess of 70 over the age of
the Participant
as of the Participant’s birthday in the year that contains the Annuity Starting Date. If the
Participant’s Spouse is the Participant’s sole designated beneficiary and the form of distribution
is a period certain and no life annuity, the period certain may not exceed the longer of the
Participant’s applicable distribution period, as determined under this Section 5.2, or the joint
life and last survivor expectancy of the Participant and the Participant’s Spouse as determined
under the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
Regulations, using the Participant’s and Spouse’s attained ages as of the Participant’s and
Spouse’s birthdays in the calendar year that contains the Annuity Starting Date.

Section VI

Requirements For Minimum Distributions

Where Participant Dies Before Date Distributions Begin

	6.1	 	Participant Survived by Designated Beneficiary

Except as elected by the Sponsor, if a Participant dies before the date distribution of his or her
interest begins and there is a designated beneficiary, the Participant’s entire interest will be
distributed, beginning no later than the time described in Section 3.2(a) or (b), over the life of
the designated beneficiary or over a period certain not exceeding:

	(a)	 	unless the Annuity Starting Date is before the first distribution calendar year, the life
expectancy of the designated beneficiary determined using the Beneficiary’s age as of the
Beneficiary’s birthday in the calendar year immediately following the calendar year of the
Participant’s death; or

-57-

 

	(b)	 	if the Annuity Starting Date is before the first distribution calendar year, the life
expectancy of the designated beneficiary determined using the Beneficiary’s age as of the
Beneficiary’s birthday in the calendar year that contains the Annuity Starting Date.

	6.2	 	No Designated Beneficiary

If a Participant dies before the date distributions begin and there is no designated beneficiary as
of September 30 of the year following the year of the Participant’s death, distribution of the
Participant’s entire interest will be completed by December 31 of the calendar year containing the
fifth anniversary of the Participant’s death.

	6.3	 	Death of Surviving Spouse Before Distributions to Surviving Spouse Begin

If a Participant dies before the date distribution of his or her interest begins, the Participant’s
surviving Spouse is the Participant’s sole designated beneficiary, and the surviving Spouse dies
before distributions to the surviving Spouse begin, this Section will apply as if the surviving
Spouse were the Participant, except that the time by which distributions must begin will be
determined without regard to Section 3.2(a).

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Exhibit B

Self-Insured Benefit Agreements

     The following documents shall be Self-Insured Benefit Agreements under the Plan, and the terms
and conditions of each are herein incorporated into the Plan by reference:

	 	 	 
	Plan	 	Description
	Sterling Chemicals, Inc. Salaried Employees’ Flexible Spending Account Plan
	 	Self-funded Health FSA
	 
	 	 
	Sterling Chemicals, Inc. Hourly Employees’ Flexible Spending Account Plan
	 	Self-funded Health FSA
	 
	 	 
	Sterling Chemicals, Inc. Dental Assistance Plan for Hourly-Paid Employees
	 	Self- funded dental benefit for hourly employees.
	 
	 	 
	Sterling Chemicals, Inc. Dental Assistance Plan for Salaried Employees
	 	Self- funded dental benefit for salaried employees.
	 
	 	 
	Sterling Chemicals, Inc. Key Employee Protection Plan
	 	self- funded benefit for key employees.
	 
	 	 
	Sterling Chemicals, Inc. Medical Benefits Plan for Hourly-Paid Employees (PPO Component Only)
	 	Self-funded portion of hourly medical plan
	 
	 	 
	Sterling Chemicals, Inc. Medical Benefits Plan for Salaried Employees (PPO Component Only)
	 	Self-funded portion of salaried medical plan
	 
	 	 
	Sterling Chemicals, Inc. Medical Benefits Plan for Retirees (PPO Component Only)
	 	Self-funded portion of retiree medical plan
	 
	 	 
	Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Hourly-Paid Employees (PPO Component Only)
	 	Self-funded portion of hourly prescription drug plan
	 
	 	 
	Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Salaried Employees (PPO Component Only)
	 	Self-funded portion of salaried employees' prescription drug plan
	 
	 	 
	Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Retirees (PPO Component Only)
	 	Self-funded portion of retiree prescription drug plan

B-iexv10w3

 

EXHIBIT 10.3

      

STERLING CHEMICALS

 

Sterling Chemicals, Inc.

Comprehensive Welfare Benefit Plan

(Wrap Plan)

      

Effective as of January 1, 2007

      

 

 

Sterling Chemicals, Inc.

Comprehensive Welfare Benefit Plan

Article I

Establishment

          Sterling Chemicals, Inc. hereby establishes the Sterling Chemicals, Inc. Comprehensive Welfare
Benefit Plan, effective as of January 1, 2007, as set forth herein. The Plan is a welfare benefit
plan as defined in Section 3(1) of ERISA which provides continuance of various health and welfare
benefits for eligible employees through a series of sub-plans in accordance with the terms and
conditions contained therein.

Article II

Definitions

          When used herein, the following words shall have the following meanings unless the context
clearly indicates otherwise:

     “Alternate Recipient” means any child of a Participant who has been determined
(pursuant to Section 11.05) to be eligible for coverage under a Benefit Agreement pursuant to
the terms of a qualified medical child support order as defined under Section 609 of ERISA.

     “Benefits” means the Insurance Contract Benefits and the Self-Insured Benefits.

     “Benefit Agreements” means the Insured Benefit Agreements, the Pre-paid Health
Plans and the Self-Insured Benefit Agreements.

     “Board of Directors” or “Board” means the board of directors of the
Company.

     “Claims Administrator” means, in the case of an Insured Benefit Agreement, the
person or entity designated therein and in all other cases (including if no Claims
Administrator is designated in the Insured Benefit Agreement) the person or entity appointed
as such in accordance with Section 7.06(a).

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Committee” means the persons appointed to administer the Plan in accordance with
the provisions of Article VII hereof. The Committee shall be the “named fiduciary” as
referred to in Section 402(a) of ERISA with respect to the management, operation and
administration of the Plan.

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     “Commonly Controlled Entity” means a corporation, trade or business if it and an
Employer are members of a controlled group of corporations as defined in Section 414(b) of the
Code, under common control as defined in Section 414(c) of the Code, members of an affiliated
service group as defined in Section 414(m) of the Code or required to be aggregated under
Section 414(o) of the Code.

     “Company” means Sterling Chemicals, Inc. or any successor entity by merger,
consolidation, purchase or otherwise unless such successor entity elects not to adopt the
Plan.

     “Dependent” means an Employee’s dependent eligible for coverage as a dependent
under any of the Benefit Agreements.

     “Effective Date” means January 1, 2007.

     “Employee” means an employee of an Employer.

     “Employer” means the Company and any and all Commonly Controlled Entities which,
pursuant to Section 11.01, elect to adopt the Plan.

     “Employer Contributions” means the payments made from time to time by an Employer
to an insurance company with respect to any appropriate Insured Benefit Agreement or as
otherwise provided under the appropriate Benefit Agreement pursuant to Section 5.02.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder.

     “Insured Benefit Agreement” means an insured welfare benefit plan described on
Exhibit A, attached hereto and incorporated herein by reference, as amended from time to time,
and made part of the Plan, pursuant to which Insurance Contract Benefits under the Plan are
defined and payable.

     “Insurance Contract Benefits” means the benefits described in and payable in
accordance with an Insured Benefit Agreement or Pre-paid Health Plan.

     “Other Plan” means (a) any group, franchise, hospital or medical service,
insurance policy or plan or other arrangement (whether pre-paid or not) providing the same or
similar types of benefits as are provided under the Plan arranged through any employer,
trustee, union, employee benefit association or other association, (b) any governmental
program or any program of benefits required by statute providing the same or similar types of
benefits as are provided under the Plan and (c) any arrangement providing the same or similar
types of benefits as are provided under Title XVIII of the Social Security Act, as amended
(Medicare).

     “Participant” means a person participating in the Plan as provided in Article IV.

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     “Participant Elective Contributions” means the payments made from time to time by
an Employee, a retired Employee, a disabled Employee or other eligible individual
participating in one or more of the Benefit Agreements by payroll withholding, through salary
reduction pursuant to a plan subject to Section 125 of the Code (a “cafeteria plan”) or any
other method allowed by the Plan Administrator with respect to any appropriate Benefit
Agreements or as otherwise provided under the appropriate Benefit Agreements pursuant to
Section 5.03.

     “Plan” means this Sterling Chemicals, Inc. Comprehensive Welfare Benefit Plan as
set forth herein including any agreement for administrative services and any Benefit
Agreements, as such agreements may from time to time be amended.

     “Plan Administrator” means the person (or persons) designated as such in
accordance with Section 7.03.

     “Plan Year” means the 12-consecutive-month period beginning January 1 and ending
December 31.

     “Pre-paid Health Plan” means an alternative health care delivery system, such as
a health maintenance organization, which is federally qualified or is qualified in accordance
with the laws of the State in which it does business, and which is described on Exhibit A,
attached hereto and incorporated herein by reference, as amended from time to time, and made
part of the Plan, pursuant to which Insurance Contract Benefits under the Plan are defined and
payable.

     “Self-Insured Benefit Agreement” means a self-insured welfare benefit plan
described on Exhibit B, attached hereto and incorporated herein by reference, as amended from
time to time, and made part of the Plan, pursuant to which Self-Insured Benefits under the
Plan are defined and payable.

     “Self-Insured Benefits” means the benefits described in and payable in accordance
with the Self-Insured Benefit Agreements.

     “Sub-Plans” means one or more of the plans described on Exhibit A or Exhibit B
attached hereto and such other plans as the Company shall determine to include hereunder, as
each of said plans may be amended from time to time hereafter.

     “Trust” means the trust, if any, created by the Company pursuant to a trust
agreement.

     “Trustee” means the Trustee appointed under the Trust.

     “Trust Fund” means the total contributions made pursuant to the Plan (through the
Sub-Plans) and the total of any contributions made under any other plan or plans that may be
funded through a Trust, increased by profits, gains, income and recoveries received, and
decreased by loses, depreciation, benefits paid and expenses incurred in the administration

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of a Trust. The “Trust Fund” includes all assets acquired by investment and
reinvestment which are held in the Trust by the Trustee.

Article III

Incorporation of Sub-Plan Documents

          There are no specific benefits directly provided in this document. Rather, all of the welfare
benefits provided hereunder are set forth in the Sub-Plans. Accordingly, all of the terms and
provisions of each of the Sub-Plans, including but not limited to the eligibility, benefits, claims
procedures, administrative procedures and contribution provisions, as the same may be modified from
time to time as provided for in each of the Sub-Plans, and as are not inconsistent with the terms
and conditions hereof, shall be incorporated herein by reference and shall be of the same force and
effect under the Plan as if they were fully set forth herein. For purposes of the reporting and
disclosure requirements of ERISA, however, each of the Sub-Plans shall not be treated as a separate
and distinct plan, but rather shall be treated as a separate benefit plan structure within the Plan
and shall be considered a part of the Plan.

Article IV

Eligibility and Participation

          A person who has fulfilled the eligibility requirements with respect to any Benefit Agreement
or Sub-Plan as of the Effective Date shall become a Participant in the Plan on the Effective Date
and shall remain a Participant for as long as provided by and in accordance with the provisions of
any Benefit Agreement or Sub-Plan. A person who meets the eligibility requirements of any Benefit
Agreement or Sub-Plan after the Effective Date shall become a Participant in the Plan as of the
date the person meets the eligibility requirements of any Benefit Agreement or Sub-Plan and shall
remain a Participant for as long as provided by and in accordance with the provisions of any
Benefit Agreement or Sub-Plan. A person shall be a Participant under the Plan only with respect to
the Benefit Agreements or Sub-Plans for which the person has fulfilled and continues to fulfill the
eligibility requirements. However, if a Participant fulfills the eligibility requirements of one
or more Sub-Plans but does not fulfill the eligibility requirements of other Sub-Plans offered
under the Plan, such eligibility under any one Sub-Plan does not confer any rights on a Participant
with respect to any other Sub-Plan.

Article V

Plan Financing

          Section 5.01. Funding Policy. The Company shall establish and direct the
implementation of a funding policy and method for the Plan which shall be consistent with the
objectives of the Plan and which may include a policy of not funding any or all benefits. Subject
to and in accordance with the funding policy, the Plan Administrator may enter into insurance
contracts (which may be issued to the Plan or the Company), establish general ledger accounts or

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utilize any other available funding medium to provide for the payment of benefits hereunder. The
Plan Administrator may, in its discretion, rely upon the advice of an actuary or firm of actuaries
in establishing and carrying out a funding policy and method.

          Section 5.02. Employer Contributions. The Employer shall make Employer Contributions
directly to each insurance company, Pre-paid Health Plan or other entity, if applicable, to fund
the Benefits provided under the Plan for the Participants, including, but not limited to,
contributions needed to pay current benefits and to pay expenses, in each case, to the extent
determined by the Company and not otherwise provided through Participant Elective Contributions.
The Employer Contributions shall be in such amounts and at such times as the Company, in accordance
with the funding policy and methods of the Plan, shall from time to time direct; provided, however,
that, except as otherwise specifically provided herein, the Employer shall have no liability to pay
such Benefits or to assure the sufficiency of any insurance company to provide such Benefits.

          Section 5.03. Participant Elective Contributions. Each Participant shall, in
accordance with the terms of the relevant Benefit Agreement or as directed by the Plan
Administrator, make Participant Elective Contributions to each insurance company, Pre-paid Health
Plan or other entity, if applicable, to fund the Benefits provided by such Benefit Agreement in
such amounts (if any) and at such times as the Company, in accordance with the funding policy and
methods of the Plan, shall from time to time direct, in a uniform and non-discriminatory manner.

          Section 5.04. Order of Use of Contributions. (a) With respect to each Insured benefit
Agreement and Pre-paid Health Plan, the entire amount of the Participant Elective Contributions for
each such Benefit shall be used for the payment of the premiums charged by the insurance company,
Pre-paid Health Plan or similar organization for the applicable coverage, before the remaining
portion of the premium for such coverage shall be paid by the Employer. Any premium refunds or
dividends with respect to such coverage shall be used to reduce the Employer’s, and not the
Participants’, portion of the premium due.

          (b) With respect to each Self-Insured Benefit Agreement, the entire amount of the Participant
Elective Contributions for each such Self-Insured Benefit (to the extent Participant Elective
Contributions are required under the relevant Benefit Agreement) shall be used for the payment of
Self-Insured Benefits provided under such Benefit Agreement before any of the remaining portion of
the costs of such Benefits are paid by the Employer.

Article VI

Amount of Benefits

          Section 6.01. Benefits. Benefits under the Plan are those established in, and payable
in accordance with, the Benefit Agreements or Sub-Plans.

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          Section 6.02. Liability for Benefits. All Self-Insured Benefits provided under the
Self-Insured Benefit Agreements shall be paid solely as provided for in the relevant Self-insured
Benefit Agreements. All Insurance Contract Benefits shall be paid solely by the insurance carrier
or carriers underwriting such Insurance Contract Benefits or by the Pre-paid Health Plan or similar
organization providing such Insurance Contract Benefits pursuant to the terms of the relevant
Insured Benefit Agreement or Pre-paid Health Plan. No Employer shall be liable in any manner to
pay any Benefits under the Plan. Each Employer’s liability to pay for Benefits shall be limited to
such liability as such Employer expressly agrees in writing to provide and only for the period
specifically indicated in the pertinent Sub-Plan. Benefits shall be paid directly to the
Participant with respect to whom or to whose Dependent the services, charges or expenses (except as
provided in Section 11.09) were incurred or the claim arose, or directly to the party who provided
such services, charges or expenses, as elected in writing by the Participant (if permitted under
the relevant Benefit Agreement) or to an Alternate Recipient or such Alternate Recipient’s
custodial parent or legal guardian (if required under Section 609 of ERISA).

          Section 6.03. Forfeitures. Any Self-Insured Benefit payable to a Participant which
cannot be distributed (a) because of the Plan Administrator’s inability, after a reasonable search,
to locate such Participant within a period of two years after such Benefit becomes payable, or (b)
because any check issued to pay such Benefit shall not have been presented to the Company’s
financial institution for payment within two years of issuance, shall become a forfeiture at the
end of the Plan Year in which such two-year period ends and shall revert to the Company, unless
otherwise prohibited by law or specifically provided in the relevant Self-Insured Benefit
Agreement.

Article VII

Administration

          Section 7.01. Appointment of Committee. The Board of Directors has appointed the
Sterling Chemicals, Inc. Employee Benefits Plans Committee as the Committee to administer the Plan.

          Section 7.02. Authority and Responsibility of the Committee. The Committee shall have
overall responsibility for the establishment, amendment and termination of the Plan and any Benefit
thereunder, which responsibility shall be discharged in part by the appointment and removal (with
or without cause) of the Plan Administrator to whom the overall responsibility for the
administration and operation of the Plan is delegated.

          Section 7.03. Plan Administrator Appointment and Removal. The Plan Administrator
shall be one or more persons appointed by the Committee and, in the absence of such appointment,
the Committee shall be the Plan Administrator. Each person serving as the Plan Administrator shall
remain in office at the will of the Committee, and the Committee may from time to time remove any
person serving as the Plan Administrator with or without cause and shall appoint his or her
successor. The Plan Administrator shall have the general responsibility for the administration of
the Plan and for carrying out its provisions. If any person

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serving as the Plan Administrator is an Employee, then, upon termination of the employment of such
Employee, that person shall automatically be deemed to be removed as Plan Administrator.

          Section 7.04. Structure. Subject to Section 7.03, any person may serve as Plan
Administrator. Any person serving as Plan Administrator may resign by delivering his or her
written resignation to the Committee, and such resignation shall become effective upon the date
specified therein. In the event more than one person is serving as the Plan Administrator, the
remaining persons serving as the Plan Administrator shall constitute the Plan Administrator with
full power to act until said vacancy is filled.

          Section 7.05. Plan Administrator Actions. If one person is serving as Plan
Administrator, no formal action shall be required for the Plan Administrator to act. If more than
one person is serving as Plan Administrator:

	          (a) the actions of the Plan Administrator shall be determined by the vote or other
affirmative expression of a majority of the persons serving as the Plan Administrator;
	 
	          (b) action may be taken by the persons serving as the Plan Administrator at a meeting or
in writing (including electronic communications) without a meeting; and
	 
	          (c)any authorized member (or members) of the Committee may execute any certificate or
other written direction on behalf of the Plan Administrator.

The Plan Administrator shall have custody of all records and documents pertaining to the Plan
Administrator’s operations.

          Section 7.06. Plan Administrator Duties. The Plan Administrator shall enforce the
Plan in accordance with the terms of the Plan and shall have all powers necessary to accomplish
that purpose, including, but not by way of limitation, the following:

	          (a) to appoint to act, suitably compensate and remove from acting one or more Claims
Administrators as such for one or more Benefit Agreements (including any such appointment made
by entering into an administrative services only contract with a service provider) except to
the extent a Claims Administrator is designated in the Insured Benefit Agreement (and in the
event the Plan Administrator does not appoint a Claims Administrator, and except as otherwise
provided in an Insured Benefit Agreement, the Plan Administrator shall be the Claims
Administrator);
	 
	          (b) to issue rules and regulations necessary for the proper conduct and administration of
the Plan and to change, alter or amend such rules and regulations;
	 
	          (c) to construe the Plan;
	 
	          (d) to determine all questions arising in the administration of the Plan, including those
relating to coverage and participation under the Plan and the rights of Participants and
Alternate Recipients to the extent the determination of such questions is not the

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	responsibility of the Claims Administrator, and is not otherwise provided by the Benefit
Agreements, and its decisions thereon shall be final and binding upon all persons hereunder;

	          (e) to authorize all disbursements in accordance with the provisions of the Plan or
underlying Trust, if any;
	 
	          (f) to employ and suitably compensate clerical employees and such accountants, attorneys
(who may but need not be the accountants or attorneys of the Company) and other persons to
render advice as it may deem necessary to the performance of its duties;
	 
	          (g) to hear, review and determine claims for benefits;
	 
	          (h) to communicate the Plan and its eligibility requirements to the Employees and notify
Employees when they become eligible to participate;
	 
	          (i) if the Committee determines to insure a Benefit, to acquire, in its discretion,
insurance or similar contracts with respect to such Benefit issued by an insurance company
authorized to do business in any State of the United States which provide Benefits of the type
specified under the Plan or which provide insurance protection with respect to such Benefits;
	 
	          (j) subject to the provisions of the Benefit Agreements, to review and approve
Self-Insured Benefit payments or to provide procedures and specify amounts of Self-Insured
Benefit payments which may be reviewed and approved by the Claims Administrator, and to
authorize the Claims Administrator to draw drafts for the payment of Self-Insured Benefits;
	 
	          (k)to receive from or on behalf of any Employer, Participant, Employee, retired
Employee, Dependent, Alternate Recipient or Claims Administrator such records and information
as shall be necessary for the proper performance of its duties under the Plan;
	 
	          (l) to prepare and file or have prepared and filed with the United States Department of
Labor, the United States Department of Treasury and/or other governmental agency all reports
or other information required under federal, state or local law; and
	 
	          (m) to establish and maintain procedures pursuant to Section 11.05 and, if there is no
Claims Administrator with respect to a Benefit, to establish and maintain procedures for
reviewing denials of claims for that Benefit consistent with Article IX.

          Section 7.07. Allocations and Delegations of Responsibility. The Committee and the
Plan Administrator, respectively, shall have the authority to delegate, from time to time, all or
any part of its, his or her responsibilities under the Plan to such person or persons as it, he or
she may deem advisable (and may authorize such persons, upon receiving written consent of the
Committee or the Plan Administrator, to delegate such responsibilities to such other person or
persons as the Committee or the Plan Administrator shall authorize) and to revoke any such

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delegation of responsibility. Any action of the delegate in the exercise of such delegated
responsibilities shall have the same force and effect for all purposes hereunder as if such action
had been taken by the Committee or the Plan Administrator. Neither the Employer nor the Committee
nor the Plan Administrator shall be liable for any acts or omissions of any such delegate. The
delegate shall periodically report to the Committee or the Plan Administrator, as applicable,
concerning the discharge of the delegated responsibilities.

          Section 7.08. Claims Administrator’s Powers and Duties with Respect to the Plan. The
Claims Administrator shall have such powers as may be necessary to discharge its duties hereunder
subject to the provisions of the Benefit Agreements under which the Claim Administrator was
appointed, and subject to such restrictions as the Plan Administrator may from time to time
specify, including but not limited to, the following:

     (a) to determine the amount, manner and payment of Benefits in accordance with the
Benefit Agreement;

     (b) to receive from or on behalf of any Employer, Participant, Employee, Dependent or
Alternate Recipient or the Plan Administrator, such records and information as shall be
necessary for the proper performance of his duties under the Plan;

     (c) to prepare and maintain such records and information as are necessary for the proper
and expeditious payment of Self-Insured Benefits and Insurance Contract Benefits;

     (d) to provide the Plan Administrator with any and all reports, documents and information
which may be needed by the Plan Administrator in order for it to prepare and file or have
prepared and filed with the United States Department of Labor, the United States Department of
the Treasury and/or other governmental agency all reports or other information required under
federal, state or other law;

     (e) to provide the Plan Administrator or its delegate with any other documents or records
which the Plan Administrator or its delegate may request from time to time so as to allow it
to evaluate claims and losses under the Plan or the Sub-Plans; and

     (f) to establish and maintain procedures for handling and paying claims and to establish
procedures for reviewing denials of claims consistent with Article IX, Section 11.05 and the
Benefit Agreements.

          Section 7.09. Plan Administrator Bonding and Expenses. The Plan Administrator shall
serve without bond (except as otherwise required by federal law) and without compensation for
services as such; but all expenses of the Plan Administrator shall be paid in accordance with any
Benefit Agreements hereunder, except to the extent paid by an Employer.

          Section 7.10. Information to be Furnished to Plan Administrator and Claims
Administrator. The Employer, the Plan Administrator and the Claims Administrator shall furnish
to the Plan Administrator or the Claim Administrator such data and information as the Plan
Administrator or Claims Administrator may reasonably request. Participants, Employees,

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Dependents and Alternate Recipients shall furnish to the Plan Administrator or the Claims
Administrator such evidence, data or information as the Plan Administrator or the Claims
Administrator may request.

          Section 7.11. Records. The regularly kept records of the Plan Administrator, the
Employer and the Claims Administrator shall be considered evidence of the status of a Participant
and all other matters contained therein applicable to this Plan.

          Section 7.12. Fiduciary Capacity. Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Plan.

          Section 7.13. Confidentiality. All records of the Plan with respect to participant
specific information shall be considered confidential material to the extent provided by law.

          Section 7.14. Administrator Decisions Final. Subject to the review procedures
outlined in Article IX, the decision of the Plan Administrator or Claims Administrator in matters
within their respective powers shall be final, binding and conclusive upon the Employer and upon
each Employee, eligible retired Employee, Alternate Recipient, Dependent, Participant, former
Participant and every other person or party.

          Section 7.15. Committee as Agent. The Committee and/or the Plan Administrator shall
act as agent for the Employer in the administration of the Plan.

          Section 7.16. Action by the Committee. All actions of the Committee shall be taken
pursuant to the decisions of a majority of the then members of the Committee.

          Section 7.17. Sub-Plan Administration. Notwithstanding any provision of this document
to the contrary, each Sub-Plan shall specify the manner of supervision of the administration and
enforcement of that Sub-Plan, according to the terms and provisions of said Sub-Plan, and the Plan
Administrator specified therein shall have all of the powers necessary to accomplish these
purposes, including but not limited to the power:

     (a) to make rules, regulations and bylaws for the administration of the Sub-Plan which
are not inconsistent with the terms and provisions hereof; provided such rules, regulations
and bylaws are evidenced in writing;

     (b) to construe all terms, provisions, conditions and limitations of the Sub-Plan;

     (c) to determine all questions relating to eligibility for participation in the Sub-Plan;

     (d) to determine the amount, manner and time of any payment of any benefit thereunder;

     (e) to maintain records required for proper administration of the Sub-Plan; and

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     (f) to make a determination as to the right of any person to a benefit under the
Sub-Plan.

Notwithstanding the foregoing provisions of this Section 7.17, the Committee shall be responsible
for all reporting requirements relating to the Sub-Plans and shall take all actions hereunder
consistent with the treatment of this Plan and all of the Sub-Plans as one employee welfare benefit
plan under ERISA.

Article VIII

Coordination of Benefits With Other Plans

          The coordination of Benefits with benefits under Other Plans in order to avoid the payment of
multiple benefits shall be as provided in the applicable Benefit Agreements. If not otherwise
provided in a Benefit Agreement, amounts to which a Participant or Alternate Recipient is entitled
with respect to health, sickness or disability Benefits under the Plan shall be reduced by the
amount payable under such Other Plan. Notwithstanding this Article VIII, the rights of each
Participant and Alternate Recipient are subrogated as provided in Section 11.06.

Article IX

Claims Procedure

          The payment of a Benefit under a Benefit Agreement is subject to the submission by the
Participant or by or on behalf of an Alternate Recipient (a “Claimant” for purposes of this
Article) of such information, evidence and releases as are required by the Benefit Agreement under
which the payment is sought. A claim for payment under a Benefit Agreement shall be submitted to
the Claims Administrator and the Claims Administrator shall evaluate such claim and notify the
Claimant of claim approval or disapproval in accordance with the provisions of the applicable
Benefit Agreement. A Claimant’s right of review with respect to any denied claim shall be as
provided in the applicable Benefit Agreement.

Article X

Amendment and Termination of the Plan

          Section 10.01. Discontinuance of Contributions. It is the expectation of the Employer
that it will continue the Plan and the payment of contributions hereunder indefinitely; provided,
however, that the continuation of the Plan and the payment of Employer Contributions hereunder is
not assumed as a contractual obligation of the Employer, and the right is reserved by the Employer
at any time to reduce, suspend or discontinue its contributions hereunder, subject to such terms
and conditions as the Committee may impose.

          Section 10.02. Amendments and Termination. The Committee may amend, modify, change,
revise, discontinue or terminate the Plan or any Benefit Agreement at any time; provided, however,
that (a) except as otherwise provided under the terms of the Plan or any

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Benefit Agreement, no amendment shall have any retroactive effect so as to deprive any Participant
of any benefit accrued prior to the date of the amendment, modification, change, revision or
discontinuance and (b) no amendment made in conformance with the provisions of the Code or ERISA,
any official regulations or rulings issued pursuant thereto, shall be considered prejudicial to the
rights of any Participant.

Article XI

Miscellaneous Provisions

          Section 11.01. Employer Joinder and Withdrawal. Any Commonly Controlled Entity may,
with the approval of the Company and under such terms and conditions as the Company may prescribe,
adopt the Plan. While it is not the present intention of any Employer to withdraw from the Plan,
any Employer, other than the Company, shall have the right, at any time, under such terms and
conditions as the Company may provide (including but not limited to requiring the Employer to make
additional payments with respect to the Employer’s share of claims or expenses), to withdraw from
the Plan by delivering to the Company and the Plan Administrator written notice of its election so
to withdraw.

          Section 11.02. Employer Successor. Any successor entity to an Employer, by merger,
consolidation, purchase or otherwise, shall be substituted hereunder for such Employer.

          Section 11.03. Indemnification. Each Employer shall indemnify and hold harmless the
Company, the Committee, the Plan Administrator, and to the extent not otherwise provided, each
officer and employee of any Employer to whom are delegated duties, responsibilities and authority
with respect to the Plan against all claims, liabilities, fines and penalties, and all expenses
reasonably incurred by or imposed upon him or her (including but not limited to reasonable
attorney’s fees) which arise as a result of his or her good faith actions or failure to act in
connection with the operation and administration of the Plan to the extent lawfully allowable and
to the extent that such claims, liabilities, fines, penalties, or expenses are not paid for by
liability insurance purchased or paid for by an Employer. Notwithstanding the foregoing, an
Employer shall not indemnify any person for any such amount incurred through any settlement or
compromise of any action made by such person unless the Company consents in writing to such
settlement or compromise.

          Section 11.04. Nonalienation of Benefits. Except as provided in Sections 6.02 and
11.05 and the Benefit Agreements, amounts payable under the Plan and any Benefit Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary,
including any liability which is for alimony or other payments for the support of a spouse or
former spouse, or for any other relative of a Participant, prior to actually being received by the
person entitled to the Benefits under the terms of the Plan; and any attempt (except as provided in
Article VI) to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish,
execute or levy upon, or otherwise dispose of any right to Benefits payable hereunder, shall be
void. No Insured Benefit Agreement, Pre-paid Health Plan or Self-Insured

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Benefit Agreement shall in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of any person entitled to benefits hereunder.

          Section 11.05. Alternate Recipients. (a) If a medical child support order (as defined
under Section 609(a)(2)(B) of ERISA) is received by the Plan with respect to coverage of an
Alternate Recipient under a Benefit Agreement, the Plan Administrator shall promptly notify the
parent Participant and each Alternate Recipient of the receipt of such order and the Plan’s
procedures for determining whether the order is a qualified medical child support order
(“QMCSO”) (as defined under Section 609(a)(2)(A) of ERISA).

     (b) The Plan Administrator shall establish reasonable procedures to determine whether medical
child support orders are QMCSOs and to administer the provision of benefits under QMCSOs. Such
procedures shall be in writing, shall provide for notification as described in Section 11.05(a) and
shall permit an Alternate Recipient to designate a representative for receipt of copies of notices
sent to the Alternate Recipient with respect to a medical child support order.

     (c) Within a reasonable period after receipt of a medical child support order, the Plan
Administrator shall determine whether such order is a QMCSO and shall notify the parent Participant
and each Alternate Recipient of such determination.

          Section 11.06. Subrogation and Repayment. Each Employee, Participant, former
Participant, Dependent, Alternate Recipient, eligible retired Employee or other person having an
interest in the Plan, as a condition of participating in and receiving benefits from the Plan, and
subject to the provisions of the Benefit Agreements, assigns to the Plan his or her rights to
damages for illness or injury caused by any third person and agrees to execute such documents as
the Plan Administrator or the Claims Administrator may require conferring such assignment;
provided, however, that such assignments of rights to the Plan are and shall be deemed to be made
only to the extent of Benefits paid in connection with such illness or injury. In addition, as a
condition of participating in or receiving Benefits from the Plan, each Employee, eligible retired
Employee, Participant, former Participant, Dependent, Alternate Recipient or other person having an
interest in the Plan agrees that in the event he receives payment or reimbursement of an expense or
benefit from both the Plan and any Other Plan or third party, then the Employee, Participant,
former Participant, Dependent, Alternate Recipient or other person shall repay to the Plan the
amount that has been paid twice. Notwithstanding the foregoing, the subrogation provisions set
forth in each Sub-Plan shall control the specific procedures relating to subrogation.

          Section 11.07. No Contract of Employment. Nothing contained herein shall be construed
to constitute a contract of employment between the Employer and any Employee or Participant.

          Section 11.08. Source of Benefits. All Benefits shall be paid or provided for by such
insurance carrier or carriers underwriting any Insured Benefit Agreements, a Pre-paid Health Plan
or other such provider or as provided under a Self-Insured Benefit Agreement. The Employer assumes
no other liability or responsibility therefor.

-13-

 

          Section 11.09. Facility of Payment. Except as otherwise provided in a Benefit
Agreement, if a Participant is declared an incompetent or is a minor, and a conservator, guardian
or other person legally charged with his or her care has been appointed, any benefits to which such
individual is entitled shall be payable to such conservator, guardian or other person legally
charged with his or her care. Except as otherwise provided in the relevant Benefit Agreement, if a
Participant is incompetent, a minor or, in the opinion of the Plan Administrator, for any other
reason would fail to derive benefit from distribution of funds, and if a conservator, guardian or
other person charged with his or her care has not been appointed, the Plan Administrator, in its
sole and exclusive discretion, may (a) require the appointment of a conservator or guardian,
(b) distribute amounts to relatives of such individual for the benefit of such individual or
(c) distribute such amounts directly to or for the benefit of such individual, and shall have no
liability to any person or entity for electing to require such appointment or making such
distribution.

          Section 11.10. Effect on Workers’ Compensation. The Plan is not intended to be and is
not in lieu of any Workers’ Compensation Act insurance and does not affect any requirements for
Workers’ Compensation Act insurance coverage, except as may be provided in the Benefit Agreements
or as provided in Section 11.06.

          Section 11.11. Gender and Number. Except when the context indicates to the contrary,
when used herein, masculine terms shall be deemed to include the feminine and neuter, and terms in
the singular shall be deemed to include the plural, and the plural the singular.

          Section 11.12. Headings. The headings of Articles and Sections are included solely
for convenience of reference, and if there is any conflict between such headings and the text of
this Plan, the text shall control.

          Section 11.13. Invalidity of Certain Provisions. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof and the Plan shall be construed and enforced as if such provisions had not been
included.

          Section 11.14. Law Governing. The Plan shall be construed and enforced according to
the laws of the State of Texas other than its laws respecting choice of law, to the extent not
preempted by federal law.

          
Executed
this 12th day of November, 2007 but effective as of January 1, 2007.

	 	 	 	 	 
	 
	 	 	 	 
	 	 	Sterling Chemicals, Inc.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Richard K. Crump 
	 

	 	 	 	 
	 

	 	Printed Name:	 	Richard K. Crump 
	 

	 	 	 	 
	 

	 	Title:	 	President and Chief Executive
Officer 
	 

	 	 	 	 

-14-

 

Exhibit A

Insured Benefit Agreements and Pre-Paid Health Plans

	 	 	 
	 
	 	 
	Description

	 	Policy or Group Numbers
	 
	 	 
	Sterling Chemicals, Inc. Medical Benefits
Plan for Hourly-Paid Employees (HMO
Component Only)

	 	Cigna HealthCare of Texas
Group Policy No. 3164728
Insured portion of hourly employees’ medical plan
	 
	 	 
	Sterling Chemicals, Inc. Medical Benefits
Plan for Salaried Employees (HMO Component
Only)

	 	Cigna HealthCare of Texas
Group Policy No. 3164728
Insured portion of salaried employees’ medical plan
	 
	 	 
	Sterling Chemicals, Inc. Medical Benefits
Plan for Retirees (HMO Component Only)

	 	Cigna HealthCare of Texas
Group Policy No. 3164728
Insured portion of retiree medical plan
	 
	 	 
	Sterling Chemicals, Inc. Disability Plan for
Hourly-Paid Employees

	 	Unum
Group Policy No.                                        
	 
	 	 
	Sterling Chemicals, Inc. Salaried Disability
Income Plan

	 	Unum
Group Policy No.                                        
	 
	 	 
	Sterling Chemicals, Inc. Group Life
Insurance Plan for Salaried Employees

	 	MetLife
Group Policy No. 102890
	 
	 	 
	Sterling Chemicals, Inc. Group Life
Insurance Plan for Hourly-Paid Employees

	 	MetLife
Group Policy No. 102890
	 
	 	 
	Sterling Chemicals, Inc. Group Life
Insurance Plan for Retirees

	 	MetLife
Group Policy No. 102890
	 
	 	 
	Sterling Chemicals, Inc. Business Travel Plan

	 	CIGNA
Group Policy No. ABL960140
	 
	 	 

A-i

 

 

Exhibit B

Self-Insured Benefit Agreements

          The following documents shall be Self-Insured Benefit Agreements under the Plan, and the terms
and conditions of each are herein incorporated into the Plan by reference:

	 	 	 
	Plan	 	Description
	 
	 	 
	Sterling Chemicals,
Inc. Salaried
Employees’ Flexible
Spending Account
Plan

	 	Self-funded Health FSA
	 
	 	 
	Sterling Chemicals,
Inc. Hourly
Employees’ Flexible
Spending Account
Plan

	 	Self-funded Health FSA
	 
	 	 
	Sterling Chemicals,
Inc. Dental
Assistance Plan for
Hourly-Paid
Employees

	 	Self- funded dental benefit for hourly employees.
	 
	 	 
	Sterling Chemicals,
Inc. Dental
Assistance Plan for
Salaried Employees

	 	Self- funded dental benefit for salaried employees.
	 
	 	 
	Sterling Chemicals,
Inc. Key Employee
Protection Plan

	 	Self- funded benefit for key employees.
	 
	 	 
	Sterling Chemicals,
Inc. Medical
Benefits Plan for
Hourly-Paid
Employees (PPO
Component Only)

	 	Self-funded portion of hourly medical plan
	 
	 	 
	Sterling Chemicals,
Inc. Medical
Benefits Plan for
Salaried Employees
(PPO Component Only)

	 	Self-funded portion of salaried medical plan
	 
	 	 
	Sterling Chemicals,
Inc. Medical
Benefits Plan for
Retirees (PPO
Component Only)

	 	Self-funded portion of retiree medical plan
	 
	 	 
	Sterling Chemicals,
Inc. Prescription
Drug Benefits Plan
for Hourly-Paid
Employees (PPO
Component Only)

	 	Self-funded portion of hourly prescription drug plan
	 
	 	 
	Sterling Chemicals,
Inc. Prescription
Drug Benefits Plan
for Salaried
Employees (PPO
Component Only)

	 	Self-funded portion of salaried employees’
prescription drug plan
	 
	 	 
	Sterling Chemicals,
Inc. Prescription
Drug Benefits Plan
for Retirees (PPO
Component Only)

	 	Self-funded portion of retiree prescription drug
plan

B-i

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