1.
Purposes . The purposes of this Long-Term Incentive Plan
(this “ Plan ”) are to provide an
incentive to executive officers and other designated employees of
Sterling Chemicals, Inc., a Delaware corporation (the “
Corporation ”) to contribute to the growth and
profitability of the Corporation, to increase shareholder value of
the Corporation, to retain such employees and to endeavor to
qualify the compensation paid such employees under this Plan for
tax deductibility under Section 162(m) of the Code.
2.
Definitions . Capitalized terms used in this Plan shall have
the following respective meanings, except as otherwise provided
herein or as the context shall otherwise require:
“
Award ” means the right of a Participant to
receive cash or other property following the completion of a
Performance Period based upon performance in respect of one or more
of the Performance Goals during such Performance Period, as
specified in Section 5(a).
“
Board ” means the Board of Directors of the
Corporation.
“
Cause ” means, with respect to any Participant,
any of the following:
(i) the commission
by such Participant of acts of dishonesty or gross misconduct which
are demonstrably injurious to the Corporation (monetarily or
otherwise) in any material respect;
(ii) the failure
of such Participant to observe and comply in all material respects
with the Corporation’s published policies relating to alcohol
and drugs, harassment or compliance with applicable
laws;
(iii) the failure
of such Participant to observe and comply with any other lawful
published policy of the Corporation, but, in the case of any such
failure that is capable of being remedied, only if such failure
shall have continued unremedied for more than 30 days after
written notice thereof is given to such Participant by the
Corporation;
(iv) the willful
failure of such Participant to observe and comply with all lawful
and ethical directions and instructions of the Board or the Chief
Executive Officer of the Corporation;
(v) the refusal or
willful failure of such Participant to perform, in any material
respect, his or her duties with the Corporation, but only if such
failure was not caused by disability or incapacity and shall have
continued unremedied for more than 30 days after written
notice thereof is given to such Participant by the
Corporation;
(vi) the
conviction of such Participant for a felony offense; or
(vii) any willful
conduct on the part of such Participant that prejudices, in any
material respect, the reputation of the Corporation in the fields
of business in which it is engaged or with the investment community
or the public at large, but only if such Participant knew, or
should have known, that such conduct could have such
result.
“
Change in Control ” means the occurrence of one
of the following events:
(i) the
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “ Exchange Act
”)) (a “ Person ”), other than
Resurgence Asset Management, L.L.C. and/or any of its or its
affiliated managed funds or accounts (“
Resurgence ”), of the Corporation’s
securities if, immediately thereafter, such Person is the
beneficial owner (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of the combined voting power
of the then-outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the
“ Outstanding Corporation Voting Securities
”); provided , however , that the following
acquisitions shall not constitute a Change of Control: (A) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of its
affiliates; or (B) any acquisition by any corporation pursuant
to a transaction that complies with subclauses (iii)(A), (iii)(B)
and (iii)(C) of this definition;
(ii) the time at
which individuals who, within any 12 month period, constitute
the Board (the “ Incumbent Board ”) cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual whose election, or
nomination for election by the Corporation’s stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;
(iii) consummation
of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the
Corporation or any of its subsidiaries, a disposition of assets by
the Corporation or the acquisition of assets or stock of another
entity by the Corporation or any of its subsidiaries (each, a
“ Business Combination ”), in each case
unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding
voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Business
Combination (including a corporation that, as a result of such
transaction, owns the Corporation or has purchased the
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Corporation’s assets in a disposition of
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Corporation
Voting Securities, (B) no Person (excluding Resurgence or any
employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 50% or more of the combined voting
power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination, and (C) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination;
or
(iv) approval by
the stockholders or other relevant stakeholders of the Corporation
of a complete liquidation or dissolution of the
Corporation.
“
Code ” means the Internal Revenue Code of 1986,
as amended from time to time, including regulations thereunder and
successor provisions thereto.
“
Committee ” means a committee composed of at
least two members of the Board who qualify as “outside
directors” within the meaning of Section 162(m) of the
Code.
“
Corporation ” means Sterling Chemicals, Inc., a
Delaware corporation, and any entity that succeeds to all or
substantially all of its business.
“
Disability ” means, with respect to any
Participant, either (i) such Participant is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) such Participant is,
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering
employees of the service provider’s employer.
“
Effective Date ” means August 7,
2009.
“
Eligible Employee ” means the Chief Executive
Officer, the President and each Senior Vice President of the
Corporation and other key employees of the Corporation or any of
its subsidiaries selected by the Committee.
“
GAAP ” means accounting principles generally
accepted in the United States.
“ Good
Reason ” means, with respect to any Participant, the
occurrence, and a failure by the Corporation to cure within
30 days after receiving notice (which notice must be within
30 days of such occurrence), of any of the
following:
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(i) a material and
adverse change in such Participant’s reporting
responsibilities, titles or elected or appointed offices as in
effect immediately prior to the effective date of such change,
including any change caused by the removal of such Participant
from, or the failure to re-elect such Participant to, any material
corporate office of the Corporation held by such Participant
immediately prior to such effective date but excluding any such
change that occurs in connection with such Participant’s
death, disability or retirement;
(ii) the
assignment to such Participant of duties or responsibilities that
are materially inconsistent with such Participant’s status,
positions, duties, responsibilities and functions with the
Corporation immediately prior to the effective date of such
assignment;
(iii) a material
reduction by the Corporation in such Participant’s base
compensation and bonus opportunity in effect immediately prior to
the effective date of such reduction;
(iv) the failure
of the Corporation to maintain employee benefit plans, programs,
arrangements and practices entitling such Participant to benefits
that, in the aggregate, are at least as favorable to such
Participant as those available to such Participant under the
benefit plans in which he or she was a participant immediately
prior to the effective date of such failure: provided,
however , that the amendment, modification or discontinuance of
any or all such employee benefit plans, programs, arrangements or
practices by the Corporation shall not constitute “Good
Reason” hereunder if such amendment, modification or
discontinuance applies generally to the Corporation’s
salaried work force and does not single out such Participant for
disparate treatment; or
(v) any change of
more than 75 miles (or, in the case of any Participant for whom the
Compensation Committee has approved a shorter distance, such
shorter distance) in the location of the principal place of
employment of such Participant immediately prior to the effective
date of such change.
“
Participant ” means an Eligible Employee
designated by the Committee to participate in this Plan for a
designated Performance Period.
“
Performance Goals ” means or may be expressed
in terms of any of the following business criteria: revenue,
earnings before interest, taxes, depreciation and amortization
(“ EBITDA ”), free cash flow, funds from
operations, funds from operations per share, operating income
(loss), pre or after tax income (loss), cash available for
distribution, cash available for distribution per share, cash
and/or cash equivalents available for operations, net earnings
(loss), earnings (loss) per share, return on equity, return on
assets, share price performance, improvements in the
Corporation’s attainment of expense levels, implementing or
completion of critical projects, including, without
limitation,
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implementation
of strategic plan(s), improvement in investor relations, marketing
and manufacturing of k
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