Document:

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                                                                    EXHIBIT 10.9

                                SEVENTH AMENDMENT
                         TO THE STERLING CHEMICALS ESOP

         WHEREAS, Sterling Chemicals, Inc. (the "Corporation") currently
maintains its Employee Stock Ownership Plan (the "Existing Plan");

         WHEREAS, Section 9.1 of the Existing Plan authorizes and empowers the
Chief Executive Officer to adopt amendments that do not materially increase the
costs or obligations of participating employers under this Plan;

         WHEREAS, the Corporation desires to amend the Existing Plan to reflect
the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA");

         WHEREAS, the Corporation has determined that amending the Existing Plan
to reflect EGTRRA will not materially increase the costs and obligations of
participating employers;

         NOW, THEREFORE, the Plan is amended as follows:

1.   Amendment to Exhibit A(f) of the Existing Plan: Effective October 29, 2002,
     the last sentence of paragraph (f) is amended to read as follows:

         "In no event may the commencement of the distribution of the
         Transferred Contributions Account be deferred beyond the date
         distributions are required to commence under Section 7.5(h)."

2.   Amendment to Exhibit A(g)(i) of the Existing Plan. Effective January 1,
     2003, Exhibit A(g)(i) is amended is amended to add a paragraph to the end,
     to read as follows:

         "Effective January 1, 2003, Participants may no longer elect
         installment payments pursuant to this Section. However, payments will
         continue to be paid pursuant to an installment election filed with the
         Administrator prior to January 1, 2003."

3.   Amendment to Exhibit A(g)(ii) of the Existing Plan. Effective January 1,
     2003, Exhibit A(g)(ii) is amended is amended to add a paragraph to the end,
     to read as follows:

         "Effective January 1, 2003, Participants may no longer elect
         installment payments pursuant to this Section. However, payments will
         continue to be paid pursuant to an installment election filed with the
         Administrator prior to January 1, 2003."

4.   Amendment of Section 7.5(h) and (i) of the Existing Plan. Effective January
     1, 2003, Section 7.5(i) is deleted and Section 7.5(h) is amended to read as
     follows:

         (h)      Minimum Required Distributions under Code section 401(a)(9)

                  (i)      General Rules

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                           (1)      Effective Date. This Section will apply for
                                    purposes of determining required minimum
                                    distributions for calendar years beginning
                                    with the 2003 calendar year.

                           (2)      Precedence. The requirements of this Section
                                    will take precedence over any inconsistent
                                    provisions of the Plan.

                           (3)      Requirements of Treasury Regulations
                                    Incorporated. All distributions required
                                    under this Section will be determined and
                                    made in accordance with the Treasury
                                    regulations under section 401(a)(9) of the
                                    Internal Revenue Code.

                           (4)      TEFRA Section 242(b)(2) Elections.
                                    Notwithstanding the other provisions of this
                                    Section, 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.

                  (ii)     Time and Manner of Distribution

                           (1)      Required Beginning Date. The Participant's
                                    entire interest will be distributed, or
                                    begin to be distributed, to the
                                    Participant no later than the Participant's
                                    required beginning date.

                           (2)      Death of Participant Before Distributions
                                    Begin. If the Participant dies before
                                    distributions begin, the Participant's
                                    entire interest will be distributed, or
                                    begin to be distributed, in accordance with
                                    Sections 7.5(a) and (b), 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

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                                             31 of the calendar year containing
                                             the fifth anniversary of the
                                             Participant's death.

                                    (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 (ii)(2),
                                             other than Section (ii)(2)(A), will
                                             apply as if the surviving spouse
                                             were the Participant.

                                    For purposes of this Section (ii)(2) and
                                    Section (iv), unless Section (ii)(2)(D)
                                    applies, distributions are considered to
                                    begin on the Participant's required
                                    beginning date. If Section (ii)(2)(D)
                                    applies, distributions are considered to
                                    begin on the date distributions are required
                                    to begin to the surviving spouse under
                                    Section (ii)(2)(A).

                           (3)      Forms of Distribution. Unless the
                                    Participant's interest is distributed in the
                                    form of a single sum on or before the
                                    required beginning date, as of the first
                                    distribution calendar year distributions
                                    will meet the requirements of Sections (iii)
                                    and (iv) of this Section.

                  (iii)    Required Minimum Distributions During Participant's
                           Lifetime

                           (1)      Amount of Required Minimum Distribution For
                                    Each Distribution Calendar Year. During the
                                    Participant's lifetime, the minimum amount
                                    that will be distributed for each
                                    distribution calendar year is the lesser of:

                                    (A)      the quotient obtained by dividing
                                             the Participant's account balance
                                             by the distribution period in the
                                             Uniform Lifetime Table set forth in
                                             section 1.401(a)(9)-9 of the
                                             Treasury regulations, using the
                                             Participant's age as of the
                                             Participant's birthday in the
                                             distribution calendar year; or

                                    (B)      if the Participant's sole
                                             designated beneficiary for the
                                             distribution calendar year is the
                                             Participant's spouse, the quotient
                                             obtained by dividing the
                                             Participant's account balance by
                                             the number in 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
                                             distribution calendar year.

                           (2)      Lifetime Required Minimum Distributions
                                    Continue Through Year of Participant's
                                    Death. Required minimum distributions will
                                    be

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                                    determined under this Section (iii)
                                    beginning with the first distribution
                                    calendar year and up to and including the
                                    distribution calendar year that includes the
                                    Participant's date of death.

                  (iv)     Required Minimum Distributions After Participant's
                           Death. Distributions made to a beneficiary in
                           accordance with Sections 7.5(b) or (c) following the
                           Participant's death shall meet the following
                           requirements.

                           (1)      Death On or After Date Distributions Begin.

                                    (A)      Participant Survived by Designated
                                             Beneficiary. If the Participant
                                             dies on or after the date
                                             distributions begin and there is a
                                             designated beneficiary, the minimum
                                             amount that will be distributed for
                                             each distribution calendar year
                                             after the year of the Participant's
                                             death is the quotient obtained by
                                             dividing the Participant's account
                                             balance by the longer of the
                                             remaining life expectancy of the
                                             Participant or the remaining life
                                             expectancy of the Participant's
                                             designated beneficiary, determined
                                             as follows:

                                             (I)      The Participant's
                                                      remaining life expectancy
                                                      is calculated using the
                                                      age of the Participant in
                                                      the year of death, reduced
                                                      by one for each subsequent
                                                      year.

                                             (II)     If the Participant's
                                                      surviving spouse is the
                                                      Participant's sole
                                                      designated beneficiary,
                                                      the remaining life
                                                      expectancy of the
                                                      surviving spouse is
                                                      calculated for each
                                                      distribution calendar year
                                                      after the year of the
                                                      Participant's death using
                                                      the surviving spouse's age
                                                      as of the spouse's
                                                      birthday in that year. For
                                                      distribution calendar
                                                      years after the year of
                                                      the surviving spouse's
                                                      death, the remaining life
                                                      expectancy of the
                                                      surviving spouse is
                                                      calculated using the age
                                                      of the surviving spouse as
                                                      of the spouse's birthday
                                                      in the calendar year of
                                                      the spouse's death,
                                                      reduced by one for each
                                                      subsequent calendar year.

                                             (III)    If the Participant's
                                                      surviving spouse is not
                                                      the Participant's sole
                                                      designated beneficiary,
                                                      the designated
                                                      beneficiary's remaining
                                                      life expectancy is
                                                      calculated using the age
                                                      of the beneficiary in the
                                                      year following the year of
                                                      the Participant's death,
                                                      reduced by one for each
                                                      subsequent year.

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                                    (B)      No Designated Beneficiary. If the
                                             Participant dies on or after the
                                             date distributions begin and there
                                             is no designated beneficiary as of
                                             September 30 of the year after the
                                             year of the Participant's death,
                                             the minimum amount that will be
                                             distributed for each distribution
                                             calendar year after the year of the
                                             Participant's death is the quotient
                                             obtained by dividing the
                                             Participant's account balance by
                                             the Participant's remaining life
                                             expectancy calculated using the age
                                             of the Participant in the year of
                                             death, reduced by one for each
                                             subsequent year.

                           (2)      Death Before Date Distributions Begin

                                    (A)      Participant Survived by Designated
                                             Beneficiary. If the Participant
                                             dies before the date distributions
                                             begin and there is a designated
                                             beneficiary, the Participant's
                                             entire interest will be distributed
                                             to the designated beneficiary by
                                             December 31 of the calendar year
                                             containing the fifth anniversary of
                                             the Participant's death. However,
                                             if the beneficiary elects
                                             installment payments in accordance
                                             with Section 7.5(c), the minimum
                                             amount that will be distributed for
                                             each distribution calendar year
                                             after the year of the Participant's
                                             death will equal at least the
                                             quotient obtained by dividing the
                                             Participant's account balance by
                                             the remaining life expectancy of
                                             the Participant's designated
                                             beneficiary, determined as provided
                                             in Section (iv)(1). Any election of
                                             installment payments under Section
                                             7.5(c) must be made no later than
                                             the earlier of September 30 of the
                                             calendar year (i) in which
                                             distribution would be required to
                                             begin under Section (ii)(2), or (i)
                                             which contains the fifth
                                             anniversary of the Participant's
                                             death. If no election is made,
                                             minimum distributions will be made
                                             in accordance with the first
                                             sentence of this Section. 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 either
                                             the Participant or the surviving
                                             spouse being, this election will
                                             apply as if the surviving spouse
                                             were the Participant.

                                    (B)      No Designated Beneficiary. If the
                                             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.

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                           (3)      Death of Surviving Spouse Before
                                    Distributions to Surviving Spouse Are
                                    Required to Begin. If the Participant dies
                                    before the date distributions begin, the
                                    Participant's surviving spouse is the
                                    Participant's sole designated beneficiary,
                                    and the surviving spouse dies before
                                    distributions are required to begin to the
                                    surviving spouse under section (ii)(2)(A),
                                    this Section (iv)(2) will apply as if the
                                    surviving spouse were the Participant.

                  (v)      Definitions

                           (1)      Designated beneficiary. The individual who
                                    is designated as the beneficiary under
                                    Section 7.2 of the Plan and is the
                                    designated beneficiary under section
                                    401(a)(9) of the Internal Revenue Code and
                                    section 1.401(a)(9)-1, Q&A-4, of the
                                    Treasury regulations.

                           (2)      Distribution calendar year. 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. The required minimum
                                    distribution for the Participant's first
                                    distribution calendar year will be made on
                                    or before the Participant's required
                                    beginning date. The required minimum
                                    distribution for other distribution calendar
                                    years, including the required minimum
                                    distribution for the distribution calendar
                                    year in which the Participant's required
                                    beginning date occurs, will be made on or
                                    before December 31 of that distribution
                                    calendar year.

                           (3)      Life expectancy. Life expectancy as computed
                                    by use of the Single Life Table in section
                                    1.401(a)(9)-9 of the Treasury regulations.

                           (4)      Participant's Account balances. The Account
                                    balances as of the last valuation date in
                                    the calendar year immediately preceding the
                                    distribution calendar year (valuation
                                    calendar year) increased by the amount of
                                    any contributions made and allocated or
                                    forfeitures allocated to the Account
                                    balances as of dates in the valuation
                                    calendar year after the valuation date and
                                    decreased by distributions made in the
                                    valuation calendar year after the valuation
                                    date. The Account balances for the valuation
                                    calendar year includes any amounts rolled
                                    over or transferred to the Plan either in
                                    the valuation calendar year or in the
                                    distribution calendar year if distributed or
                                    transferred in the valuation calendar year.

                           (5)      Required beginning date. The required
                                    beginning date is April 1 of the calendar
                                    year following the later of (i) the calendar
                                    year in

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                                    which the Participant attains age 70
                                    1/2 or (ii) the calendar year in which the
                                    Participant retires, except that clause (ii)
                                    shall not apply to a Five Percent Owner.

5.   Addition of Article III to the Existing Plan. Effective January 1, 2002,
     unless otherwise stated, a new Article XIII is added to read as follows:

                        ARTICLE XIII - EGTRRA PROVISIONS

                                    PREAMBLE

                  A.       ADOPTION AND EFFECTIVE DATE OF ARTICLE XIII. This
         Article XIII of the Plan is adopted to reflect certain provisions of
         the Economic Growth and Tax Relief Reconciliation Act of 2001
         ("EGTRRA"). This Article is intended as good faith compliance with the
         requirements of EGTRRA and is to be construed in accordance with
         EGTRRA and guidance issued thereunder. Except as otherwise provided,
         this Article shall be effective as of the first day of the first Plan
         Year beginning after December 31, 2001, and shall end December 31,
         2010, unless extended by law or otherwise.

                  B.       SUPERSESSION OF INCONSISTENT PROVISIONS. This
         Article XIII shall supersede the provisions of the Plan to the extent
         those provisions are inconsistent with the provisions of this Article.

         13.1     INCREASE IN COMPENSATION LIMIT

                  Notwithstanding anything in the definition of Compensation in
         Section 1.11 or any other Plan provision to the contrary, for Plan
         Years beginning on or after January 1, 2002, the annual compensation of
         each Participant taken into account in determining allocations for any
         Plan Year shall not exceed $200,000, as adjusted for increases in the
         cost-of-living in accordance with Section 401(a)(17)(B) of the Code.
         Annual compensation means compensation during the Plan Year or such
         other consecutive 12-month period over which compensation is otherwise
         determined under the Plan (the determination period). The
         cost-of-living adjustment in effect for a calendar year applies to
         annual compensation for the determination period that begins with or
         within such calendar year.

         13.2     LIMITATIONS ON CONTRIBUTIONS

            (a)      EFFECTIVE DATE. This Section shall be effective for
                     limitation years beginning after December 31, 2001.

            (b)      MAXIMUM ANNUAL ADDITION. Notwithstanding Section 4.4,
                     except to the extent permitted under Section 414(v) of the
                     Code, if applicable, the annual additions that may be
                     contributed or allocated to a Participant's Account under
                     the Plan for any limitation year shall not exceed the
                     lesser of:

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                     (1)   $40,000, as adjusted for increases in the
                           cost-of-living under Section 415(d) of the Code, or

                     (2)   100 percent of the Participant's 415 Compensation for
                           the limitation year.

                     The compensation limit referred to in (2) shall not apply
                     to any contribution for medical benefits after separation
                     from service (within the meaning of Section 401(h) or
                     Section 419A(f)(2) of the Code) which is otherwise treated
                     as an annual addition.

         13.3     MODIFICATION OF TOP-HEAVY RULES

                  (a)      EFFECTIVE DATE. This Section shall apply for purposes
                           of determining whether the Plan is a top-heavy plan
                           under Section 416(g) of the Code for Plan Years
                           beginning after December 31, 2001, and whether the
                           Plan satisfies the minimum benefits requirements of
                           Section 416(c) of the Code for such years. This
                           subsection amends Article XII and Sections 1.29 and
                           4.3 of the Plan.

                  (b)      DETERMINATION OF TOP-HEAVY STATUS

                           (1)      KEY EMPLOYEE. Key Employee means any
                                    Employee or former Employee (including any
                                    deceased Employee) who at any time during
                                    the Plan Year that includes the
                                    determination date was an officer of the
                                    Employer having annual compensation greater
                                    than $130,000 (as adjusted under Section
                                    416(i)(1) of the Code for Plan Years
                                    beginning after December 31, 2002), a
                                    five-percent owner of the Employer, or a
                                    one-percent owner of the Employer having
                                    annual compensation of more than $150,000.
                                    For this purpose, annual compensation means
                                    compensation within the meaning of section
                                    415(c)(3) of the Code. The determination of
                                    who is a Key Employee will be made in
                                    accordance with Section 416(i)(1) of the
                                    Code and the applicable regulations and
                                    other guidance of general applicability
                                    issued thereunder.

                  (c)      DETERMINATION OF PRESENT VALUES AND AMOUNTS. This
                           Section shall apply for purposes of determining the
                           present values of accrued benefits and the amounts of
                           account balances of Employees as of the determination
                           date.

                           (1)      DISTRIBUTIONS DURING YEAR ENDING ON THE
                                    DETERMINATION DATE. The present values of
                                    accrued benefits and the amounts of account
                                    balances of an Employee as of the
                                    determination date shall be increased by the
                                    distributions made with respect to the
                                    Employee under the Plan and any plan
                                    aggregated with the Plan under Section
                                    416(g)(2) of the Code during the 1-year
                                    period ending on

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                                    the determination date. The preceding
                                    sentence shall also apply to distributions
                                    under a terminated plan which, had it not
                                    been terminated, would have been aggregated
                                    with the Plan under Section 416(g)(2)(A)(i)
                                    of the Code. In the case of a distribution
                                    made for a reason other than severance from
                                    employment, death, or disability, this
                                    provision shall be applied by substituting
                                    5-year period for 1-year period.

                           (2)      EMPLOYEES NOT PERFORMING SERVICES DURING
                                    YEAR ENDING ON THE DETERMINATION DATE. The
                                    accrued benefits and accounts of any
                                    individual who has not performed services
                                    for the Employer or an Affiliated Employer
                                    during the 1-year period ending on the
                                    determination date shall not be taken into
                                    account.

                  (d)      MINIMUM BENEFITS

                           (1)      MATCHING CONTRIBUTIONS. Employer matching
                                    contributions shall be taken into account
                                    for purposes of satisfying the minimum
                                    contribution requirements of Section
                                    416(c)(2) of the Code and the Plan. The
                                    preceding sentence shall apply with respect
                                    to matching contributions under the Plan or,
                                    if the Plan provides that the minimum
                                    contribution requirement should be met in
                                    another plan, such other plan. Employer
                                    matching contributions that are used to
                                    satisfy the minimum contribution
                                    requirements shall be treated as matching
                                    contributions for purposes of the actual
                                    contribution percentage test and other
                                    requirements of Section 401(m) of the Code.

                           (2)      CONTRIBUTIONS UNDER OTHER PLANS. The Plan
                                    shall satisfy the minimum benefit
                                    requirement to the extent not met by any
                                    other plan qualified under Code Section
                                    401(a) maintained by the Employer.

                  (e)      MODIFICATION OF TOP-HEAVY RULES. The top-heavy
                           requirements of section 416 of the Code, Article XII,
                           and Sections 1.29 and 403 shall not apply in any year
                           beginning after December 31, 2001, in which the Plan
                           consists solely of a cash or deferred arrangement
                           which meets the requirements of section 401(k)(12) of
                           the Code and matching contributions with respect to
                           which the requirements of section 401(m)(11) of the
                           Code are met.

         13.4     DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

                  (a)      EFFECTIVE DATE. Notwithstanding Section 7.14, this
                           Section shall apply to distributions made after
                           December 31, 2001.

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                  (b)      MODIFICATION OF DEFINITION OF ELIGIBLE RETIREMENT
                           PLAN. For purposes of clarifying the direct rollover
                           provisions in Section 7.14 of the Plan, an eligible
                           retirement plan shall include an annuity contract
                           described in Section 403(b) of the Code and an
                           eligible plan under Section 457(b) of the Code 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 this Plan. The definition of eligible
                           retirement plan shall also apply in the case of a
                           distribution to a surviving spouse, or to a spouse or
                           former spouse who is the alternate payee under a
                           qualified domestic relations order, as defined in
                           Section 414(p) of the Code.

                  (c)      MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER
                           DISTRIBUTION TO EXCLUDE HARDSHIP DISTRIBUTIONS. For
                           purposes of clarifying the direct rollover provisions
                           in Section 7.14 of the Plan, any amount that is
                           distributed on account of hardship shall not be an
                           eligible rollover distribution and the distributee
                           may not elect to have any portion of such a
                           distribution paid directly to an eligible retirement
                           plan.

                  (d)      MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER
                           DISTRIBUTION TO INCLUDE AFTER-TAX EMPLOYEE
                           CONTRIBUTIONS. For purposes of clarifying the direct
                           rollover provisions in Section 7.14 of the Plan, a
                           portion of a distribution shall not fail to be an
                           eligible rollover distribution merely because the
                           portion consists of after-tax employee contributions
                           that are not includible in gross income. However,
                           such portion may be transferred only to an individual
                           retirement account or annuity described in Section
                           408(a) or (b) of the Code, or to a qualified defined
                           contribution plan described in Section 401(a) or
                           403(a) of the Code that agrees to separately account
                           for amounts so transferred, including separately
                           accounting for the portion of such distribution which
                           is includible in gross income and the portion of such
                           distribution which is not so includible.

         IN WITNESS WHEREOF, this Amendment has been adopted by the Chief
Executive Officer and has been executed as of the date stated below.

                                    STERLING CHEMICALS, INC.

                                    _______________________________________
                                    David G. Elkins, President and Co-Chief
                                           Executive Officer

                                    Dated: ________________________________

                                       10<PAGE>

                                                                   EXHIBIT 10.10

                               SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT (this "Agreement") effective as of January 2,
2003 is by and between DAVID G. ELKINS ("Employee") and STERLING CHEMICALS, INC.
(the "Company").

         WHEREAS, the Company and Employee entered into an Amended and Restated
Employment Agreement dated as of January 23, 2001 (the "Employment Agreement");

         WHEREAS, Employee is a participant under the Company's Third Amended
and Restated Key Employee Protection Plan ("KEPP");

         WHEREAS, Employee has announced his decision to retire from the Company
effective January 2, 2003 (the "Retirement Date"); and

         WHEREAS, the Company and Employee are entering into this Agreement
primarily to set forth their mutual agreement as to the payments and other
benefits to be paid or provided to Employee in connection with or arising out of
the termination of his employment with the Company.

         NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby acknowledge, represent, warrant, covenant and
agree as follows:

                                    ARTICLE I

                                   Termination

         Section 1.1.   Termination of Employment. On the Effective Date,
Employee's employment with the Company shall be deemed to have terminated for
all purposes as of the Retirement Date. As used in this Agreement, "Effective
Date" means the date on which this Agreement becomes effective in accordance
with Section 5.4 below. The Company agrees that such termination shall be
treated, for all purposes, as a termination of employment for Good Reason under
both the Employment Agreement and the KEPP, and the Company agrees that all
requirements imposed on Employee under the Employment Agreement and the KEPP
regarding a termination of employment for Good Reason are deemed to have been
satisfied.

         Section 1.2.   Resignation as Director and Officer. Employee hereby
resigns as President and Co-Chief Executive Officer of the Company and as a
director of, and from any and all offices held in, each of the Company's direct
or indirect subsidiaries (such subsidiaries collectively, the "Constituent
Companies"), effective as of the Retirement Date.

<PAGE>

                                   ARTICLE II

                                    Benefits

         Section 2.1.   Base Salary. Promptly after the Retirement Date, but
subject to all the provisions of this Agreement, the Company shall pay to
Employee a lump sum amount for all unpaid base salary earned by Employee as of
December 31, 2002, such amount representing payment in full for all earned but
unpaid base salary due Employee as of the date of the execution of this
Agreement.

         Section 2.2.   Severance Payment. As soon as practicable after the
Effective Date, but subject to all the provisions of this Agreement, the Company
agrees to pay to Employee a lump sum severance payment in the amount of
$1,578,500 pursuant to Section 2.02(a)(i) of the KEPP. Employee acknowledges and
agrees that the severance payment provided for in this Section 2.2 is in lieu
of, and not in addition to, any severance payment, separation payment,
termination payment or other similar payment payable to Employee under any
contract or agreement (including, without limitation, the Employment Agreement)
or under any other employee benefit plan, program or practice of the Company.
Consistent with Section 2.02(c) of the KEPP, Employee agrees that, if Employee
is offered and accepts reemployment by the Company on or before January 2, 2004,
he will repay the Company a Pro Rata Portion of any amounts paid pursuant to
this Section 2.2. For purposes of this Agreement, "Pro Rata Portion" means (a)
the aggregate amount paid to Employee pursuant to this Section 2.2 times a
fraction, (i) the numerator of which is the number of days from Employee's
reemployment date to January 2, 2004 and (ii) the denominator of which is 365,
minus (b) such amount as may be required to ensure that the net after tax amount
retained by Employee after any repayment to the Company pursuant to this Section
2.2 is equivalent to the net after tax amount that would have been retained by
Employee had Employee originally received and paid taxes on an amount equal to
the original amount paid to Employee pursuant to this Section 2.2 minus the
amount repaid by Employee.

         Section 2.3.   Accrued Vacation. Prior to the execution of this
Agreement, the Company has paid to Employee a lump sum payment in the amount of
$103,600, representing full and complete payment for all unused vacation time
earned and accrued by Employee as of the Retirement Date. The Company
acknowledges that taxes were withheld from such payment and the Company remains
obligated to compensate Employee under Section 7.05(a) of the Employment
Agreement, which amount shall be paid concurrently with the payment of amounts
due under Section 2.2.

         Section 2.4.   Business Expenses. The Company ratifies and confirms in
all respects its obligation under Sections 3.07 and 3.09 of the Employment
Agreement to reimburse Employee for certain professional fees and business
expenses incurred on or before January 2, 2003. Employee understands and agrees
that the Company is not obligated to reimburse Employee for any expenses
incurred after January 2, 2003 (other than expenses incurred in Employee's
capacity as a director of the Company).

                                      -2-

<PAGE>

         Section 2.5.   Stock Options, etc. Employee acknowledges and agrees
that, as of the Retirement Date, (a) Employee does not own or hold any options,
warrants, calls, subscriptions or other rights of any nature to acquire any
shares of capital stock or other securities of the Company or any Constituent
Company and (b) Employee does not own or hold any phantom stock, stock
appreciation right or any similar rights with respect to the Company or any
Constituent Company.

         Section 2.6.   Tax Withholding. Each payment to Employee under this
Agreement will be subject to withholding for federal income and FICA taxes and
other elected deductions; provided, however, that no such withholding, nor any
other provision of this Agreement, shall diminish or reduce in any respect
Employee's rights under Section 7.05 of the Employment Agreement or Section 2.05
of the KEPP.

         Section 2.7.   Other Benefits. Notwithstanding any provision of this
Agreement to the contrary, Employee shall be entitled to receive (a) all of the
retirement and other post-employment benefits provided for in the Employment
Agreement, including (without limitation) those described in Sections 3.04(c),
3.12, 3.13(b), 7.03, 7.05, 7.06, 7.07 and 7.08 of the Employment Agreement and
(b) all of the benefits afforded to Employee as an eligible retiree under the
Company's retiree medical plan, Salaried Employees Pension Plan, Pension Benefit
Equalization Plan and Supplemental Employee Retirement Plan. In addition, during
the period commencing on January 2, 2003 and continuing thereafter until January
2, 2006, Employee shall continue to be covered by all life, health care, medical
and dental insurance plans and programs (excluding disability) of the Company by
which he was covered on January 1, 2003 notwithstanding any subsequent
termination or amendment of any such plan or programs and notwithstanding any
eligibility provisions thereof to the contrary, provided that (i) with respect
to benefits available to Employee under any group health plan of the Company
which is subject to the Consolidated Omnibus Recertification Act of 1985, as
amended, Employee makes a timely COBRA election and (ii) notwithstanding the
foregoing, in lieu of continued coverage under the Company's life insurance
program, the Company shall reimburse Employee for a portion of the actual
premiums paid by Employee for his individual life insurance policy covering the
period from the date hereof until January 2, 2005, such portion to be equal to
the aggregate premium paid by Employee for such life insurance policy (pro rated
for any partial covered period) times a fraction, the numerator of which is
$875,000 and the denominator of which is the maximum benefit payable under such
policy.

                                   ARTICLE III

                                 Mutual Releases

         Section 3.1.   Release by Employee. (a) Except for any claims arising
under this Agreement or as otherwise expressly provided in this Agreement,
Employee, on behalf of himself and his heirs, beneficiaries and personal
representatives and assigns, knowingly and voluntarily releases, acquits and
forever discharges the Company Parties (defined below) of and from any and all
claims, charges, complaints, obligations, liabilities, promises, agreements,
contracts, damages, actions, causes of action, suits and accrued benefits of
every kind and nature and whether known or unknown, both at law (whether common
law, statutory or otherwise) and

                                      -3-

<PAGE>

in equity, arising from or in any way connected with or related to Employee's
employment with the Company or the termination of Employee's employment with the
Company or any of the events or circumstances leading to, surrounding or
resulting in such termination. Employee acknowledges and agrees that the
foregoing is a full and complete release which covers, without limitation, any
and all:

         (i)      claims, charges, complaints, obligations, liabilities,
    damages, actions, causes of action and suits based, in whole or in part, on
    wrongful termination, discrimination, breach of contract, retaliatory
    discharge, discharge in violation of public policy, breach of any covenant
    in the Employment Agreement, breach of any covenant of good faith or fair
    dealing, intentional infliction of emotional distress, negligent infliction
    of emotional distress, defamation, fraud, invasion of privacy or violation
    of any federal, state or local law, including, but not limited to, Title VII
    of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et.
    seq., the Equal Pay Act, 29 U.S.C. Section 206, the Employee Retirement
    Income Security Act of 1974, 29 U.S.C. Section 1001 et seq., the Americans
    with Disabilities Act, 42 U.S.C. Section 12101 et seq., the Fair Labor
    Standards Act, as amended, 29 U.S.C. Section 215(a)(3), the Age
    Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Section 621
    et seq. (the "ADEA"), the Family and Medical Leave Act, 29 U.S.C. Section
    2601 et seq., the Worker Adjustment and Retraining Notification Act, 29
    U.S.C. Section 201 et seq., the Occupational Safety and Health Act, 29
    U.S.C. Section 660(c), the Texas Commission on Human Rights Act, Texas Labor
    Code Section 21.001, et. seq., the Texas Workers' Compensation Act, Texas
    Labor Code Sections 451.001, Texas Payday Law, Title II, Chapter 61 and
    Texas Labor Code, in each case, to the extent that such claim, charge,
    complaint, obligation, liability, damage, actions, cause of action or suit
    is based on any act or omission of the Company on or before the date of this
    Agreement; and

         (ii)     claims for severance pay, bonuses or benefits under any
    compensation or employee benefit plan, program, policy, contract or other
    arrangement of the Company, but excluding any severance pay, bonus or
    benefit which Employee is entitled to receive under Article II of this
    Agreement.

Subject to Section 5.4 below, the foregoing release is unconditional and
irrevocable.

         (b)      As used herein, "Company Parties" means the Company, each
    Constituent Company and each of their respective former, present and future
    directors, officers, employees, agents and stockholders and all persons
    acting by, through or in concert with any of them.

         Section 3.2.   Release by Company; No Offset. (a) The Company, on
behalf of itself and its successors and assigns, knowingly and voluntarily
releases, acquits and forever discharges Employee of and from all claims,
charges, complaints, obligations, liabilities, promises, agreements, contracts,
damages, actions, causes of action and suits of every kind and nature and
whether known or unknown, both at law (whether common law, statutory or
otherwise) and in equity, arising from or in any way connected with or related
to Employee's employment with the Company or the termination of Employee's
employment with the Company or any of the events or circumstances leading to,
surrounding or resulting in such

                                      -4-

<PAGE>

termination, including, but not limited to, claims, charges, complaints,
obligations, liabilities, damages, actions, causes of action and suits based, in
whole or in part, on breach of contract. Subject to Section 5.4 below, the
foregoing release is unconditional and irrevocable.

         (b)      The Company's obligations to make the payments and
arrangements provided for in this Agreement and to otherwise perform its
obligations under this Agreement shall be absolute and unconditional and, except
as specifically provided in this Agreement, shall not be affected by any
circumstances, including any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against Employee or any other
person or entity.

                                   ARTICLE IV

                                Certain Covenants

         Section 4.1.   Non-Competition. Prior to the first anniversary of the
Retirement Date, Employee will not own an interest in, manage, operate, join,
control, lend money to or render financial or other assistance to or participate
or be connected with, as an officer, employee, partner, stockholder, consultant
or otherwise, any individual, corporation, partnership or other business
organization that competes with the Company or any Constituent Company in the
manufacturing, marketing or sales of styrene monomer, acrylonitrile or acetic
acid; provided, however, that the foregoing restriction will not preclude
Employee from acquiring or holding up to 5% of the voting securities of any
entity that is listed on a national securities exchange. Employee acknowledges
and agrees that the foregoing restriction is fair and reasonable in all respects
and is reasonably required for the protection of the Company. Employee
understands that the foregoing restriction may limit his ability to engage in a
business similar to the Company's business, but Employee acknowledges that he
will receive sufficiently high remuneration and benefits from the Company
hereunder to justify such restriction. If Employee delivers to the Company a
written request that the Company waive compliance with the foregoing restriction
as to a particular activity which Employee desires to engage in, the Company
agrees to consider such request in good faith and further agrees not to
unreasonably refuse such request. For this purpose, a refusal by the Company of
a request relating to any particular activity will not be deemed unreasonable if
such activity could have a detrimental or prejudicial effect on the Company or
any Constituent Company.

         Section 4.2.   Confidentiality. Employee ratifies and confirms in all
respects the covenants and agreements set forth in Article V of the Employment
Agreement, which provisions are hereby incorporated into this Agreement as if
set forth in their entirety. Employee acknowledges and agrees that such
covenants and agreement shall survive the termination of Employee's employment
with the Company.

         Section 4.3.   Non-disparagement. (a) Subject to Section 5.4 below, the
Company agrees that it will not make any statements to third parties which are
intended to disparage, discredit or injure the reputation of Employee.

                                      -5-

<PAGE>

         (b)      Subject to Section 5.4 below, Employee agrees that he will not
make any statements to third parties which are intended to disparage, discredit
or injure the reputation of the Company or any of the other Company Parties.
Employee agrees that he will not do anything that would in any way tend to harm
the Company's good will and relationships with customers, suppliers and others
having business dealings with the Company.

         (c)      Nothing in this Section 4.3 shall obligate either party to
commit perjury or violate any law or court order.

         Section 4.4.   Return of Company Property, etc. Employee agrees to
promptly turn over to the Company all files, memoranda, records, documents,
credit cards, parking cards and other personal property of the Company or any
Constituent Company in the possession or under the control of Employee. Employee
understands and agrees that, after the Retirement Date, Employee is no longer
authorized to incur any expenses, obligations or liabilities or otherwise act in
the name or on behalf of the Company or any Constituent Company (other than in
connection with his service as a director of the Company).

         Section 4.5.   Cooperation. Employee agrees that, if reasonably
requested by the Company, Employee will be reasonably available to, and will
cooperate in all reasonable respects with, the Company and the Constituent
Companies and their respective counsel in connection with any litigation,
proceeding or investigation (administrative, civil or criminal). It is
understood and agreed that Employee shall not be required to devote more than
one day of his time pursuant to any particular request by the Company under this
Section 4.5 unless the parties shall have mutually agreed upon the amount of
reasonable compensation to be paid to Employee therefor. Upon written request
accompanied by appropriate documentation, the Company agrees to reimburse
Employee for any reasonable expenses incurred by Employee in connection with any
actions taken by Employee pursuant to this Section 4.5.

                                    ARTICLE V

                                  Miscellaneous

         Section 5.1.   Additional Representations, Warranties, etc. of
Employee. (a) Employee represents and warrants that he has not filed any
complaints, charges or lawsuits against any Company Party with any governmental
agency or in any court.

         (b)      Employee acknowledges and agrees that the execution, delivery
and performance of this Agreement by the Company shall not to be construed as an
admission of liability of any kind on the part of, or as evidence of unlawful or
improper conduct of any kind by, any Company Party, all such liability and
conduct being expressly denied.

         (c)      Employee voluntarily accepts the payments and other benefits
described in Article II hereof as sufficient payment for the release contained
in Section 3.1 hereof and the other representations, warranties and agreements
of Employee set forth in this Agreement. Employee acknowledges and agrees that
no promises, commitments, statements or

                                      -6-

<PAGE>

representations (oral or written) have been made to Employee by or on behalf of
any Company Party which are contrary to the terms of this Agreement.

         (d)      Employee understands and agrees that the release contained in
Section 3.1 above is a full, complete and final release of all Company Parties.
Employee represents and warrants that Employee has completely read this
Agreement and fully understands its terms, contents, conditions and effects.

         (e)      Employee acknowledges that Employee has been represented in
connection with this Agreement by the law firm of Fulbright & Jaworski, his
attorneys of choice.

         (f)      Employee represents and warrants that Employee is not
presently affected by any disability which would prevent Employee from knowingly
and voluntarily signing this Agreement or granting the release set forth in
Section 3.1 above. Employee represents and warrants that the representations,
warranties, releases and agreements made by Employee in this Agreement are made
of his own free will and accord and were not made under duress, coercion or
undue influence and that Employee does not consider himself to be in a disparate
bargaining position relative to the Company with respect to the matters covered
by this Agreement.

         (g)      Employee expressly represents and warrants that Employee has
completely read this Agreement prior to executing it, has had an opportunity to
review it, has been offered twenty-one days within which to consider this
Agreement and to understand its terms, contents, conditions and effects and has
entered into this Agreement knowingly and voluntarily.

         Section 5.2.   Dispute Resolution; Remedies. (a) In the event a
dispute shall arise between the parties as to whether the provisions of this
Agreement have been complied with, the parties agree, subject to paragraphs (b)
and (c) below, to resolve such dispute in accordance with the provisions of
Article VI of the Employment Agreement, which provisions are hereby incorporated
in this Agreement as if set forth in their entirety. In the event a dispute
under this Agreement is resolved by mediation or arbitration in accordance with
this paragraph (a), the non-prevailing party shall be responsible for the
reasonable legal fees and expenses incurred by the prevailing party in
connection with such mediation or arbitration.

         (b)      Employee acknowledges and agrees that a breach of any of the
covenants contained in Article IV hereof may result in material irreparable
injury to the Company for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach, the Company shall be entitled to obtain a temporary
restraining order or a preliminary or permanent injunction restraining Employee
from engaging in activities prohibited by such covenants or such other relief as
may be required or appropriate to specifically enforce any of such covenants.
Employee submits to the in personam jurisdiction before each and every court in
Harris County, Texas for that purpose.

         (c)      Subject to paragraph (a) above, no right, power or remedy
granted under this Agreement is intended to be exclusive, but each shall be
cumulative and in addition to any and

                                      -7-

<PAGE>

all other rights, powers and remedies referred to in this Agreement or otherwise
available at law or in equity.

         Section 5.3.   Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF TEXAS WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.

         Section 5.4.   Consideration Period; Employee's Right of Revocation.
(a) Employee hereby knowingly and voluntarily waives the remainder of the 21-day
consideration period, if any, following the date Employee signs this Agreement.
Employee acknowledges and agrees that (i) he has not been asked by the Company
to shorten his time-period for consideration of whether to sign this Agreement,
(ii) the Company has not threatened to withdraw or alter the benefits due
Employee prior to the expiration of the 21-day period nor has the Company
provided different terms to Employee because he has decided to sign this
Agreement prior to the expiration of the 21-day consideration period, and (iii)
he understands that having waived some portion of the 21-day consideration
period, the Company will expedite the processing of benefits provided to
Employee in exchange for signing this Agreement.

         (b)      Employee understands that Employee has until 4:00 p.m. on
January 17, 2003 within which to consider this Agreement and that this Agreement
is revocable by Employee for a period of seven days following the execution of
this Agreement and, if not so revoked, this Agreement will become effective and
enforceable. For the revocation to be effective, written notice of revocation
must be delivered to Kenneth M. Hale, General Counsel, Sterling Chemicals, Inc.,
1200 Smith Street, Suite 1900, Houston, TX, 77002, no later than the close of
business on the seventh day after Employee has signed this Agreement. If
Employee revokes this Agreement as aforesaid, this Agreement shall automatically
terminate and cease to be of any force or effect. No benefits will be paid under
this Agreement until the eighth day after Employee signs this Agreement.

         (c)      Employee understands that following the seven-day revocation
period, this Agreement will be final and binding. Employee acknowledges and
agrees that he will not pursue any claim, which he has settled by this
Agreement. In the event that Employee breaches this agreement, Employee shall
pay all of the Company's costs and expenses (including reasonable attorneys'
fees) related to the defense of any claims (other than claims under the Older
Workers Benefit Protection Act ("OWBPA") and the ADEA). Without regard to the
foregoing, Employee acknowledges and agrees that (i) he may challenge the
knowing and voluntary nature of the releases contained in this Agreement under
the OWBPA and the ADEA before a court, the Equal Employment Opportunity
Commission ("EEOC"), or any state or local agency charged with the enforcement
of any discrimination laws and (ii) nothing in this Agreement prevents Employee
from filing a charge or complaint with or from participating in an investigation
or proceeding conducted by the EEOC or any state or local agency charged with
the enforcement of any discrimination laws; provided, however, that if Employee
pursues any claim against the Company under the OWBPA or the ADEA, the Company
may seek to set off the amount paid to Employee under this Agreement against any
award Employee may obtain in such legal proceeding, and the Company may be
entitled to recover costs and attorneys fees incurred by the Company as
specifically authorized under applicable federal or state law.

                                      -8-

<PAGE>

         Section 5.5.   Amendments and Waivers. No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the parties. The failure of the
Company or Employee to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver thereof or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other terms of the Agreement.

         Section 5.6.   Severability. The invalidity, illegality or
unenforceability of any provision of this Agreement shall not affect the
validity, legality or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

         Section 5.7.   Counterparts. This Agreement may be signed in any number
of identical counterparts,each of which shall be deemed an original for all
purposes.

         Section 5.8.   Interpretation. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
The words "herein", "hereof" and "hereunder" and words of similar import refer
to this Agreement as a whole and not to any particular Article, Section or other
subdivision. No provision of this Agreement shall be construed against either
party solely because that party (or its counsel) drafted such provision.

         Section 5.9.   Successors and Assigns. (a) This Agreement shall be
binding upon and enforceable against the Company and its successors and assigns.
The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company, by written agreement in form and substance reasonably
acceptable to Employee, to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Such agreement shall become
effective concurrently with the consummation of the transaction requiring the
same. A copy of such agreement shall promptly be provided to Employee. As used
herein, the term "Company" shall include any successor to its business or assets
as aforesaid which executes and delivers the agreement provided for in this
Section 5.9(a) or which otherwise becomes bound by all terms and provisions of
this Agreement by operation of law.

         (b)      This Agreement and all rights of Employee hereunder shall
inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts would be payable
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee's devisees, legatees or other designees or, if there be no such
devisees, legatees or other designees, to Employee's estate.

         (c)      This Agreement shall be binding upon and enforceable against
Employee and Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. Each
other Company Party is a beneficiary of this Agreement and may enforce this
Agreement the same as if such Company Party were a party

                                      -9-

<PAGE>

thereto. This Agreement and all rights of each Company Party hereunder shall
inure to the benefit of and be enforceable by such Company Party and its
successors and assigns

         Section 5.10. Further Assurances. Each party agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect and carry out the intent and purposes of this Agreement.

         Section 5.11. Entire Agreement. Except to the extent that
provisions from the Employment Agreement or the KEPP expressly survive the
execution of this Agreement pursuant to the terms hereof, this Agreement
constitutes the entire understanding and agreement between the parties with
respect to the subject matter hereof and supersedes all prior contracts and
agreements relating to such matter, whether oral or written; provided, however,
that, (a) the Indemnity Agreement between the Company and Employee dated as of
January 1, 1997 shall remain in full force and effect in accordance with its
terms and (b) to the extent not inconsistent with or contrary to the terms of
this Agreement, Articles I, V, VI and VII and Sections 3.04(c), 3.12 and 3.13(b)
of the Employment Agreement shall remain in full force and effect in accordance
with their terms.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                            EMPLOYEE:

                                            ___________________________________
                                            David G. Elkins

                                            Dated:_____________________________

                                            STERLING CHEMICALS, INC.

                                            By:________________________________

                                            Printed Name:______________________

                                            Title:_____________________________

                                            Dated:_____________________________

                                      -10-

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