Document:

exv10w11wa

 

EXHIBIT 10.11(a)

First Amendment to the

Seventh Amended and Restated Savings and Investment Plan

          Whereas, Sterling Chemicals, Inc. (the “Corporation”) currently
maintains its Seventh Amended and Restated Savings and Investment Plan (as amended, the
“Existing Plan”);

          Whereas, Section 16.01 of the Existing Plan authorizes and empowers the Employee
Benefits Committee of the Corporation (the “Committee”) to amend the Existing Plan in
certain respects; and

          Whereas, (i) the Committee desires to amend the Existing Plan in certain respects to
reflect certain provisions of the Final Regulations under Sections 401(k) and 401(m) of the
Internal Revenue Code that were published on December 29, 2004 (the “Final 401(k)
Regulations”), (ii) this First Amendment to the Seventh Amended and Restated Savings and
Investment Plan (this “Amendment”) is intended as good faith compliance with the
requirements of the Final 401(k) Regulations and (iii) in furtherance of that desire, the Committee
has duly authorized and approved this Amendment;

          Now, Therefore, the Existing Plan is hereby amended as follows:

          Section 1. Amendment of Section 1.03 of the Existing Plan. Effective as of January 1,
2006, Section 1.03 of the Existing Plan is hereby amended by amending the definition of
“Eligible Earnings” contained therein by amending the proviso thereof to read in its
entirety as follows:

provided, however, that notwithstanding any other provision of this Plan to the
contrary, (i) for Plan Years beginning on or after January 1, 1997, the annual Eligible
Earnings of each Participant taken into account under this Plan shall not exceed
$160,000, as adjusted for increases in the cost of living in accordance with Section
401(a)(17) of the Code, (ii) the cost of living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which Eligible Earnings is
determined beginning in such calendar year, (iii) if a determination period consists of
fewer than 12 months, the annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and the
denominator of which is 12, and (iv) effective as of January 1, 2006, except for
occasional, bona fide administrative considerations, contributions made pursuant to an
Elective Deferral election cannot precede the earlier of (A) the performance of services
related to the contribution and (B) when the compensation that is subject to the
election would be currently available to the Eligible Employee in the absence of an
election to defer.

          Section 2. Amendment of Article IV of the Existing Plan. Effective as of January 1,
2006, Article IV of the Existing Plan is hereby amended by adding thereto a new Section 4.06 to
read in its entirety as follows:

 

 

          Section 4.06. Modifications to Actual Deferral Percentage Testing
Requirements. Except as set forth below, the following provisions will apply
effective for Plan Years beginning after December 31, 2005:

     (a) Targeted Matching Contribution Limit. A matching contribution
with respect to an Elective Deferral for a Plan Year is not taken into account
under the Actual Contribution Percentage test for a Non-Highly Compensated
Participant to the extent it exceeds the greatest of:

	 	(i)	 	five percent of the Non-Highly Compensated
Participant’s 414(s) Compensation for the Plan Year;
	 
	 	(ii)	 	the Non-Highly Compensated Participant’s Elective
Deferrals for the Plan Year; and
	 
	 	(iii)	 	the product of two times this Plan’s Representative
Matching Rate and the Non-Highly Compensated Participant’s Elective
Deferrals for the Plan Year.

For
purposes of this Section, this Plan’s “Representative Matching Rate”
is the lowest Matching Rate for any eligible Non-Highly Compensated Participant
among a group of Non-Highly Compensated Participants that consists of half of all
eligible Non-Highly Compensated Participants in this Plan for the Plan Year who
make Elective Deferrals for the Plan Year (or, if greater, the lowest Matching
Rate for all eligible Non-Highly Compensated Participants in this Plan who are
employed by the Employer on the last day of the Plan Year and who make Elective
Deferrals for the Plan Year).

     For purposes of this Section, the “Matching Rate” for a Participant
generally is the matching contributions made for such Participant divided by the
Participant’s Elective Deferrals for the Plan Year. If the matching rate is not
the same for all levels of Elective Deferrals for a Participant, then the
Participant’s Matching Rate is determined assuming that a Participant’s Elective
Deferrals are equal to 6% of 414(s) Compensation.

     If this Plan provides a match with respect to the sum of the Participant’s
After-Tax Contributions and Elective Deferrals, then for purposes of this Section,
that sum is substituted for the amount of the Participant’s Elective Deferrals in
subsections (ii) and (iii) above and in determining the Matching Rate, and
Participants who make either After-Tax Contributions or Elective Deferrals are
taken into account in determining this Plan’s Representative Matching Rate.
Similarly, if this Plan provides a match with respect to the Participant’s
After-Tax Contributions, but not Elective Deferrals, then for purposes of this
subsection, the Participant’s After-Tax Contributions are substituted for the
amount of the Participant’s Elective Deferrals in subsections
(ii) and (iii) above and in determining the Matching Rate and Participants
who

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make After-Tax Contributions are taken into account in determining this Plan’s
Representative Matching Rate.

     (b) Targeted QNEC limit. Qualified Non-Elective Contributions (as
defined in Section 1.401(k)-6 of the Regulations) cannot be taken into account
under the Actual Contribution Percentage test for a Plan Year for a Non-Highly
Compensated Participant to the extent such contributions exceed the product of
that Non-Highly Compensated Participant’s Section 414(s) Compensation and the
greater of 5% or two times this Plan’s Representative Contribution Rate. Any
Qualified Non-Elective Contribution taken into account under an Actual Deferral
Percentage test under Section 1.401(k)-2(a)(6) of the Regulations (including the
determination of the Representative Contribution Rate for purposes of Section
1.401(k)-2(a)(6)(iv)(B) of the Regulations) is not permitted to be taken into
account for purposes of this Section (including the determination of the
Representative Contribution Rate for purposes of subsection (i) below). For
purposes of this Section:

	 	(i)	 	The Plan’s “Representative Contribution Rate”
is the lowest Applicable Contribution Rate of any eligible Non-Highly
Compensated Participant among a group of eligible Non-Highly
Compensated Participants that consists of half of all eligible
Non-Highly Compensated Participants for the Plan Year (or, if greater,
the lowest Applicable Contribution Rate of any eligible Non-Highly
Compensated Participant who is in the group of all eligible Non-Highly
Compensated Participants for the Plan Year and who is employed by the
Employer on the last day of the Plan Year); and
	 
	 	(ii)	 	The “Applicable Contribution Rate” for an
eligible Non-Highly Compensated Participant is the sum of the matching
contributions (as defined in Section 1.401(m)-1(a)(2) of the
Regulations) taken into account in determining the Actual Contribution
Ratio for the eligible Non-Highly Compensated Participant for the Plan
Year and the Qualified Non-Elective Contributions made for that
Non-Highly Compensated Participant for the Plan Year, divided by that
Non-Highly Compensated Participant’s 414(s) Compensation for the Plan
Year.

Notwithstanding the above, Qualified Non-Elective Contributions that are made in
connection with an Employer’s obligation to pay prevailing wages under the
Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965
(79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into
account for a Plan Year for a Non-Highly Compensated Participant to the extent
such contributions do not exceed 10% of that Non-Highly Compensated Participant’s
414(s) Compensation.

     (c) Actual Contribution Ratio of Highly Compensated Employees Multiple
plans. The Actual Contribution Ratio for any Participant who is a

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Highly
Compensated Employee and who is eligible to have matching contributions or
After-Tax Contributions allocated to his or her account under two or more plans
described in Section 401(a) of the Code, or arrangements described in Section
401(k) of the Code that are maintained by the same Employer, shall be determined
as if the total of such contributions was made under each plan and arrangement.
If a Highly Compensated Employee participates in two or more such plans or
arrangements that have different plan years, then all matching contributions and
After-Tax Contributions made during the Plan Year being tested under all such
plans and arrangements shall be aggregated, without regard to the plan years of
the other plans. For plan years beginning before January 1, 2006, all such plans
and arrangements ending with or within the same calendar year shall be treated as
a single plan or arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under the Regulations
promulgated under Section 401(m) of the Code.

     (d) Plans Using Different Testing Methods for the Actual Contribution
Ratio and Actual Deferral Percentage. Except as otherwise provided in this
Section, this Plan may use the current year testing method or prior year testing
method for the Actual Contribution Percentage test for a Plan Year without regard
to whether the current year testing method or prior year testing method is used
for the Actual Deferral Percentage test for that Plan Year; provided, however,
that if different testing methods are used, then this Plan cannot use:

	 	(i)	 	the recharacterization method of Section
1.401(k)-2(b)(3) of the Regulations to correct excess contributions for
a Plan Year;
	 
	 	(ii)	 	the rules of Section 1.401(m)-2(a)(6)(ii) of the
Regulations to take Elective Deferrals into account under the Actual
Contribution Percentage test (rather than the Actual deferral Percentage
test); or
	 
	 	(iii)	 	the rules of Section 1.401(k)-2(a)(6) of the
Regulations to take Qualified Matching Contributions into account under
the Actual Deferral Percentage test (rather than the Actual Contribution
Percentage test).

     (e) Distribution of Income Attributable to Excess Aggregate
Contributions. This Section 4.06(e) shall only be effective between January
1, 2006 and December 31, 2007. Distributions of Excess Contributions must be
adjusted for income (gain or loss), including an adjustment for income for the
period between the end of the Plan Year and the date of the distribution (the
“gap period”). For purposes of this Section, “income” shall be
determined and allocated in accordance with the provisions of Section 5.10(e),
except that such Section shall be applied by substituting “Excess
Contributions” with “Excess 
Aggregate Contributions” and by substituting amounts taken into account
under the Actual Contribution Percentage test for amounts taken into account under
the Actual Deferral Percentage test.

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     (f) Corrective Contributions. If a failed Actual Contribution
Percentage test is to be corrected by making an Employer contribution, then the
provisions of this Plan for the corrective contributions shall be applied by
limiting the contribution made on behalf of any Non-Highly Compensated Participant
pursuant to such provisions to an amount that does not exceed the targeted
contribution limits of Sections 4.06(a) and 4.06(b) hereof.

This Section 4.06 shall supersede the provisions of this Plan to the extent those
provisions are inconsistent with the provisions of this Section 4.06.

          Section 3. Amendment of Article V of the Existing Plan. Effective as of January
1, 2006, Article V of the Existing Plan is hereby amended by adding thereto a new Section
5.10 to read in its entirety as follows:

       Section 5.10. Modifications to Actual Deferral Percentage Testing
Requirements. Except as set forth below, the following provisions will apply
effective for Plan Years beginning after December 31, 2005. This Section 5.10 shall
supersede the provisions of this Plan to the extent those provisions are inconsistent
with the provisions of this Section 5.10.

        (a) Targeted Contribution Limit. Qualified Non-Elective
Contributions (as defined in Section 1.401(k)-6 of the Regulations) cannot be
taken into account in determining the Actual Deferral Ratio for a Plan Year for a
Non-Highly Compensated Participant to the extent such contributions exceed the
product of that Non-Highly Compensated Participant’s Section 414(s) Compensation
and the greater of 5% or two times this Plan’s Representative Contribution Rate.
Any Qualified Non-Elective Contribution taken into account under an Actual
Contribution Percentage test under Section 1.401(m)-2(a)(6) of the Regulations
(including the determination of the representative contribution rate for purposes
of Section 1.401(m)-2(a)(6)(v)(B) of the Regulations), is not permitted to be
taken into account for purposes of this Section (including the determination of
the Representative Contribution Rate under this Section). For purposes of this
Section:

	 	(i)	 	The Plan’s “Representative Contribution Rate”
is the lowest Applicable Contribution Rate of any eligible Non-Highly
Compensated Participant among a group of eligible Non-Highly
Compensated Participants that consists of half of all eligible
Non-Highly Compensated Participants for the Plan Year (or, if greater,
the lowest Applicable Contribution Rate of any eligible Non-Highly
Compensated Participant who is in the group of all eligible Non-
Highly Compensated Participants for the Plan Year and who is employed
by the Employer on the last day of the Plan Year); and

	 	(ii)	 	The “Applicable Contribution Rate” for an
eligible Non-Highly Compensated Participant is the sum of the Qualified Matching

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	 	 	 	Contributions (as defined in Section 1.401(k)-6 of the
Regulations) taken into account in determining the Actual Deferral Ratio
for the eligible Non-Highly Compensated Participant for the Plan Year
and the Qualified Non-Elective Contributions made for the eligible
Non-Highly Compensated Participant for the Plan Year, divided by the
eligible Non-Highly Compensated Participant’s 414(s) Compensation for
the same period.

Notwithstanding the above, Qualified Non-Elective Contributions that are made in
connection with an Employer’s obligation to pay prevailing wages under the
Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965
(79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into
account for a Plan Year for a Non-Highly Compensated Participant to the extent
such contributions do not exceed 10% of that Non-Highly Compensated Participant’s
414(s) Compensation.

     Qualified Matching Contributions may only be used to calculate an Actual
Deferral Ratio to the extent that such Qualified Matching Contributions are
matching contributions that are not precluded from being taken into account under
the Actual Contribution Percentage test for the Plan Year under the rules of
Section 1.401(m)-2(a)(5)(ii) of the Regulations and as set forth in Section 4.06.

     (b) Limitation on QNECs and QMACs. Qualified Non-Elective
Contributions and Qualified Matching Contributions cannot be taken into account to
determine an Actual Deferral Ratio to the extent such contributions are taken into
account for purposes of satisfying any other Actual Deferral Percentage test, any
Actual Contribution Percentage test, or the requirements of Section 1.401(k)-3,
1.401(m)-3 or 1.401(k)-4 of the Regulations. Thus, for example, matching
contributions that are made pursuant to Section 1.401(k)-3(c) of the Regulations
cannot be taken into account under the Actual Deferral Percentage test.
Similarly, if a plan switches from the current year testing method to the prior
year testing method pursuant to Section 1.401(k)-2(c) of the Regulations,
Qualified Non-Elective Contributions that are taken into account under the current
year testing method for a year may not be taken into account under the prior year
testing method for the next year.

     (c) Actual Deferral Ratio of HCE if Multiple Plans. The Actual
Deferral Ratio of any Participant who is a Highly Compensated Employee for the
Plan Year and who is eligible to have Elective Contributions (as defined in
Section 1.401(k)-6) of the Regulations (and Qualified Non-Elective Contributions
and/or Qualified

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Matching Contributions, if treated as Elective Contributions for
purposes of the Actual Deferral Percentage test) allocated to such Participant’s
accounts under two or more cash or deferred arrangements described in Section
401(k) of the Code, that are maintained by the same Employer, shall be determined
as if such Elective Contributions (and, if applicable, such Qualified Non-Elective
Contributions and/or Qualified Matching Contributions) were made under a single
arrangement. If a Highly Compensated Employee participates in two or more cash or
deferred arrangements of the Employer that have different Plan Years, then all
Elective Contributions made during the Plan Year being tested under all such cash
or deferred arrangements shall be aggregated, without regard to the plan years of
the other plans. However, for Plan Years beginning before January 1, 2006, if the
plans have different plan years, then all such cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single cash or
deferred arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the Regulations under
Section 401(k) of the Code.

     (d) Plans Using Different Testing Methods for the Actual Deferral
Percentage and Actual Contribution Percentage Tests. Except as otherwise
provided in this Section, this Plan may use the current year testing method or
prior year testing method for the Actual Deferral Percentage test for a Plan Year
without regard to whether the current year testing method or prior year testing
method is used for the Actual Contribution Percentage test for that Plan Year.
However, if different testing methods are used, then this Plan cannot use:

	 	(i)	 	the recharacterization method of Section
1.401(k)-2(b)(3) of the Regulations to correct excess contributions for
a Plan Year;
	 
	 	(ii)	 	the rules of Section 1.401(m)-2(a)(6)(ii) of the
Regulations to take Elective Contributions into account under the Actual
Contribution Percentage test (rather than the Actual Deferral Percentage
test); or
	 
	 	(iii)	 	the rules of Section 1.401(k)-2(a)(6)(v) of the
Regulations to take Qualified Matching Contributions into account under
the Actual Deferral Percentage test (rather than the Actual Contribution
Percentage test).

     (e) Distribution of Income Attributable to Excess Contributions. This
Section 5.10(e) shall only be effective between January 1, 2006 and December 31,
2007. Distributions of Excess Contributions must be adjusted for income (gain or
loss), including an adjustment for income for any gap period (i.e., the period
between the end of the Plan Year and the date of the distribution). The
Corporation has the discretion to determine and allocate income using any of the
methods set forth below:

	 	(i)	 	Reasonable Method of Allocating Income. The
Corporation may use any reasonable method for computing the income
allocable to Excess Contributions; provided, however, that the method
does not violate Section 401(a)(4) of the Code, is used consistently
for all Participants and for all corrective distributions under this
Plan for the Plan Year, and is used by this Plan for allocating income
to Participant’s accounts. This Plan will not fail to use a reasonable

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	 	 	 	method for computing the income allocable to Excess Contributions
merely because the income allocable to Excess Contributions is
determined on a date that is no more than seven days before the
distribution.

	 	(ii)	 	Alternative Method of Allocating Income. The
Corporation may allocate income to Excess Contributions for the Plan
Year by multiplying the income for the Plan Year allocable to the
Elective Contributions and other amounts taken into account under the
Actual Deferral Percentage test (including contributions made for the
Plan Year), by a fraction, the numerator of which is the Excess
Contributions for the Participant for the Plan Year, and the denominator
of which is the sum of the:

	 	(A)	 	Account balance attributable to
Elective Contributions and other amounts taken into account
under the Actual Deferral Percentage test as of the
beginning of the Plan Year, and
	 
	 	(B)	 	any additional amount of such
contributions made for the Plan Year.

     (f) Safe Harbor Method of Allocating Gap Period Income. This Section
5.10(f) shall only be effective between January 1, 2006 and December 31, 2007.
The Corporation may use the safe harbor method in this paragraph (f) to determine
income on Excess Contributions for the gap period. Under this safe harbor method,
income on Excess Contributions for the gap period is equal to 10% of the income
allocable to Excess Contributions for the Plan Year that would be determined under
Section 5.10(e)(ii) above, multiplied by the number of calendar months that have
elapsed since the end of the Plan Year. For purposes of calculating the number of
calendar months that have elapsed under the safe harbor method, a corrective
distribution that is made on or before the
fifteenth (15th) day of a month is treated as made on the last day of the
preceding month and a distribution made after the fifteenth day of a month is
treated as made on the last day of the month.

     (g) Alternative method for allocating Plan Year and gap period
income. This Section 5.10(g) shall only be effective between January 1, 2006
and December 31, 2007. The Corporation may determine the income for the aggregate
of the Plan Year and the gap period, by applying the alternative method provided
by Section 5.10(e)(ii) to this aggregate period. This is accomplished by (I)
substituting the income for the Plan Year and the gap period, for the income for
the Plan Year and (ii) substituting the amounts taken into account under the
Actual Deferral Percentage test for the Plan Year and the gap period, for the
amounts taken into account under the Actual Deferral Percentage test for the Plan
Year in determining the fraction that is multiplied by that income.

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     (h) Corrective Contributions. If a failed Actual Deferral Percentage
test is to be corrected by making an Employer contribution, then the provisions of
the Plan for the corrective contributions shall be applied by limiting the
contribution made on behalf of any Non-Highly Compensated Participant pursuant to
such provisions to an amount that does not exceed the targeted contribution limits
of Section 5.10(a), or in the case of a corrective contribution that is a
Qualified Matching Contribution, the targeted contribution limit of Section 4.06.

          Section 4. Amendment of Section 10.6 of the Existing Plan. Effective as of January 1,
2006, Section 10.6 of the Existing Plan is hereby amended by adding thereto a new paragraph (e) to
read in its entirety as follows:

     (e) This Section 10.06(e) shall only be effective with respect to Plan Years
beginning after December 31, 2005. This Section 10.06(e) shall supersede the provisions
of this Plan to the extent those provisions are inconsistent with the provisions of this
Section 10.06(e). This Plan shall disregard Elective Deferrals in applying the vesting
provisions of this Plan to other contributions or benefits under Section 411(a)(2) of
the Code; provided, however, that this Plan shall otherwise take a Participant’s
Elective Deferrals into account in determining the Participant’s vested benefits under
this Plan. Thus, for example, this Plan shall take Elective Deferrals into account in
determining whether a Participant has a nonforfeitable right to contributions under this
Plan for purposes of forfeitures, and for applying provisions permitting the repayment
of distributions to have forfeited amounts restored, and the provisions of Sections
410(a)(5)(D)(iii) and 411(a)(6)(D)(iii) of the Code permitting a plan to disregard
certain service completed prior to breaks-in-service (sometimes referred to as “the rule
of parity”).

          Section 5. Effect of Amendments. Except as amended and modified by this Amendment,
the Existing Plan shall continue in full force and effect. The Existing Plan and this Amendment
shall be read, taken and construed as one and the same instrument. Upon the
effectiveness of this Amendment, each reference in the Existing Plan to “this Plan” shall mean and
be a reference to the Existing Plan as amended hereby.

          Section 6. Binding Effect. This Amendment shall inure to the benefit of, and shall be
binding upon the Employers (as defined in the Existing Plan) and their successors and assigns and
upon the Participants and their Beneficiaries (as such terms are defined in the Existing Plan) and
their respective heirs, executors, personal representatives, administrators, successors and
assigns.

          Section 7. Severability. Should any clause, sentence, paragraph, subsection or
Section of this Amendment be judicially declared to be invalid, unenforceable or void, such
decision will not have the effect of invalidating or voiding the remainder of this Amendment, and
the part or parts of this Amendment so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom as if such stricken part or parts had never been included herein.

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          Section 8. Governing Law. To The Extent Not Superseded By The Laws Of The United
States,  This Amendment Shall Be Construed and Enforced in Accordance With, and
the Rights of the Parties Shall Be Governed By, the Internal Laws of the State of Texas, Without
Reference to Principles of Conflicts of Law. 

          In Witness Whereof, the Committee has caused this Amendment to be duly executed in
its name and on its behalf by its proper officer thereunto duly
authorized on December 28, 2006.

	 	 	 	 	 
	 

	 	Sterling Chemicals, Inc.	 	 
	 
	 	 	 	 
	 

	 	/s/ Richard K. Crump	 	 
	 
	 	 

Richard K. Crump, President and Chief
	 	 
	 

	 	   Executive Officer	 	 

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EXHIBIT 10.16(b)

THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT, WHICH HAVE BEEN REMOVED AND REPLACED WITH ONE OR MORE
ASTERISKS, HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

 

 

Amendment to

Second Amended and Restated Production Agreement

     This Amendment to Second Amended and Restated Production Agreement (this
“Amendment”) dated effective as of April 1, 2005 is by and between Sterling Chemicals,
Inc., a Delaware corporation (“Sterling”), and BP Amoco Chemical Company, a
Delaware corporation, as successor-in-interest to BP Chemicals Inc., an Ohio corporation
(“BP” and, together with Sterling, the “Parties”). Capitalized terms used but not
defined herein shall have the respective meanings ascribed to such terms in the Existing Production
Agreement referred to below.

Preliminary Statements

	1.	 	The Parties are parties to that certain Second Amended and Restated Production
Agreement dated effective as of August 1, 1996 (the “Original Production
Agreement”).
	 
	2.	 	The Parties have heretofore amended the Original Production Agreement pursuant to
that certain letter agreement dated September 8, 1998, that certain letter agreement
dated December 28, 1998 and that certain Amendment to Second Amended and Restated
Production Agreement dated effective as of March 1, 2001 (the Original Production
Agreement as so amended, the “Existing Production Agreement”).
	 
	3.	 	The Parties desire to amend the Existing Production Agreement in certain respects
on the terms and subject to the conditions contained herein.

     Now, Therefore, in consideration of the premises and the mutual covenants contained
herein and in the Existing Production Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally
bound, hereby agree as follows:

     1. Profit Sharing Split. The first sentence of Section 6.6(b) of the Existing
Production Agreement is hereby amended to read in its entirety as follows:

Commencing August 1, 2006 through the termination of this Agreement, the
Company’s share of Profit will be increased during the period from ***% to
***%.

     2. Sharing of Capital Costs. Section 6.6(c) is hereby amended by amending the last
sentence thereof to read in its entirety as follows:

Expenditures for any major project that would achieve beneficial operation
after August 1, 2006, but that would require fund disbursement prior to
August 1, 2006, shall be shared in accordance with the Profit sharing ratios
to become effective on August 1, 2006.

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     3. Expansion Projects. Notwithstanding anything to the contrary contained in Section
17.1 of the Existing Production Agreement, Sterling’s share of any Capital Expenditures associated
with any expansion of the rated daily output of the Unit that is approved by BP and the Company,
including the 2005 Expansion Project, shall be ***%. For purposes of this Amendment, the term
“2005 Expansion Project” means the potential capital project involving the replacement of
process valves and the upgrading of internal piping that is expected to increase the capacity of
the Unit anticipated to be implemented in 2005.

     4. Amendment of Exhibit H. Exhibit H to the Production Agreement is hereby amended to
read in its entirety as set forth on Exhibit H attached hereto and incorporated herein for all
purposes.

     5. No Other Changes. Except as expressly amended in this Amendment, the terms and
conditions of the Existing Production Agreement shall remain in full force and effect. Upon the
effectiveness of this Amendment, each reference in the Existing Production Agreement to “this
Agreement” shall mean and be a reference to the Existing Production Agreement as amended hereby.

     6. Binding Effect. This Amendment shall inure to the benefit of, and shall be binding
upon, the parties and their respective successors and permitted assigns.

     7. Counterparts. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which taken together shall constitute one and the same
agreement. It shall not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.

     8. Severability. Should any clause, sentence, paragraph, subsection or Section of
this Amendment be judicially declared to be invalid, unenforceable or void, such decision will not
have the effect of invalidating or voiding the remainder of this Amendment, and the parties agree
that the part or parts of this Amendment so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom as if such stricken part or parts had never been included
herein.

     9. Governing Law. This Amendment Shall Be Construed And Enforced In Accordance
With, And The Rights Of The Parties Shall Be Governed By, The Internal Laws Of The State Of Texas,
Without Reference To Principles Of Conflicts Of Law.

     10. Entire Agreement. This Amendment and the Existing Production Agreement set forth
all of the promises, agreements, conditions, understandings, warranties and representations between
the parties with respect to the matters cover hereby, and supersede all prior agreements,
arrangements and understandings between the parties, whether written, oral or otherwise. There are
no promises, agreements, conditions, understandings, warranties or representations, oral or
written, express or implied, between the parties concerning the subject matter hereof or thereof
except as set forth herein or therein.

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     Intending To Be Legally Bound, the Parties have executed this Amendment through their
duly authorized representatives effective as of the date specified above.

	 	 	 	 	 	 	 	 	 
	BP Amoco Chemical Company	 	 	 	Sterling Chemicals, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Paul Watson	 	 	 	By:	 	/s/ Paul C. Rostek
	 

	 	 
	 	 	 	 	 	 
	Printed Name:

	 	Paul Watson	 	 	 	Printed Name:	 	Paul C. Rostek
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	Performance Unit Leader	 	 	 	Title:	 	Senior Vice President
	 

	 	 
	 	 	 	 	 	 

-4-

 

EXHIBIT H

Sample Profit Calculations After August 1, 2006

     Example calculations of the Company’s share of Profit from August 1, 2006 through the
termination of this Agreement.

Example:

	 	 	•   08/01/06 – 12/31/06 — Company’s share of Profit more than $***
	 
	 	 	•   2007 — Company’s share of Profit less than $***
	 
	 	 	•   2008 — Company’s share of Profit greater than $*** (Surplus Payment recovery)
	 
	 	 	•   2009 — Profit less than $***
	 
	 	 	•   2010 — Company’s share of Profit greater than $*** (Surplus Payment recovery)

($ in millions)

	 	 	 	 	 	 	 	 	 	 	 
	Profit Share Calculation	 	08/06-12/06	 	2007	 	2008	 	2009	 	2010
	 
	Profit (excluding Major Capital Items)

	 	***
	 	***
	 	***
	 	***
	 	***
	Company’s share of Profit at ***%

	 	***
	 	***
	 	***
	 	***
	 	***
	BP’s recovery of Surplus Payments(1)

	 	***
	 	***
	 	***
	 	***
	 	***
	 
	Total due to Company

	 	***
	 	***
	 	***
	 	***
	 	***
	 

	 	 	 	 	 	 	 	 	 	 	 
	Payment of Profit Share 	 	08/06-12/06	 	2007	 	2008	 	2009	 	2010
	 
	Total of quarterly advances of
the Company’s share of Profit

	 	***
	 	***
	 	***
	 	***
	 	***
	Payment due Company at end of
Contract Year

	 	***
	 	***
	 	***
	 	***
	 	***
	 
	Total cash paid to Company

	 	***
	 	***
	 	***
	 	***
	 	***
	 

	 	 	 	 	 	 	 	 	 	 	 
	Surplus Payment Accumulation	 	08/06-12/06	 	2007	 	2008	 	2009	 	2010
	 
	Balance at end of prior Contract Year

	 	***
	 	***
	 	***
	 	***
	 	***
	Surplus Payment in Contract Year

	 	***
	 	***
	 	***
	 	***
	 	***
	BP’s recovery of Surplus Payments

	 	***
	 	***
	 	***
	 	***
	 	***
	 
	Balance at end of Contract Year

	 	***
	 	***
	 	***
	 	***
	 	***
	 

 

			
	(1)	 	 BP’s recovery of Surplus Payments for a given Contract Year equals the lesser
of (x) the accumulated Surplus Payment balance at the end of the prior Contract Year and (y)
the Company’s share of Profit in excess of the total quarterly advances of the Company’s share
of Profit paid during such Contract Year.
	 
	(2)	 	 The total of quarterly advances of the Company’s share of Profit for a given
Contract Year equals $***, provided however that should the Profit for the prior
Contract Year be less than $***, then the total of quarterly advances of the
Company’s share of Profit for such Contract Year is equal to the Profit for the prior Contract
Year.

H-i

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}]]