<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Sterling Chemicals, Inc.
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
Bowne of Houston
-----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------
(2) Aggregate number of securities to which transactions applies:
-----------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
-----------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
-----------------------------------------
(2) Form, schedule or registration statement no.:
-----------------------------------------
(3) Filing party:
-----------------------------------------
(4) Date filed:
-----------------------------------------
- - -----------------
(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
<PAGE> 2
STERLING CHEMICALS, INC.
1200 SMITH STREET
SUITE 1900
HOUSTON, TEXAS 77002-4312
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 25, 1995
To the Stockholders of Sterling Chemicals, Inc.:
An Annual Meeting of Stockholders of Sterling Chemicals, Inc. (the
"Company") will be held at Texas Commerce Center Auditorium, 601 Travis Street,
Houston, Texas at 9:00 A.M., Houston time, on Wednesday, January 25, 1995 for
the following purposes:
1. To elect seven directors, to serve until the 1996 Annual
Meeting and until their successors are duly elected and qualified.
2. To consider and act upon a proposal to ratify the
appointment of Coopers & Lybrand L.L.P. as the independent auditors of
the books and accounts of the Company for the fiscal year ending
September 30, 1995.
3. To transact such other business as may properly come before
the meeting or any adjournment(s) thereof.
Stockholders of record at the close of business on December 5, 1994
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
You are cordially invited to attend the meeting. Whether or not you
are planning to attend the meeting, you are urged to complete, date and sign
the enclosed proxy and return it promptly in the accompanying envelope.
By Order of the Board of Directors
F. MAXWELL EVANS
------------------------------------
F. Maxwell Evans
Secretary
Houston, Texas
December 19, 1994
________________________________________________________________________________
YOUR VOTE IS IMPORTANT
TO ENSURE REPRESENTATION AT THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE WHETHER OR
NOT YOU INTEND TO BE PRESENT AT THE MEETING. NO ADDITIONAL POSTAGE IS NECESSARY
IF MAILED IN THE UNITED STATES.
________________________________________________________________________________
<PAGE> 3
STERLING CHEMICALS, INC.
1200 SMITH STREET
SUITE 1900
HOUSTON, TEXAS 77002-4312
(713) 650-3700
December 19, 1994
_________________________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 25, 1995
_________________________
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Sterling Chemicals, Inc.
(the "Company") for use at the Annual Meeting of Stockholders of the Company to
be held on Wednesday, January 25, 1995, and at any adjournment(s) thereof (the
"Annual Meeting") for the purposes set forth in this Proxy Statement and the
accompanying Notice. The Proxy Statement and the enclosed form of proxy will
first be sent to stockholders on or about December 19, 1994.
PROXIES
The shares represented by any proxy in the enclosed form, if such
proxy is properly executed and is received by the Company prior to or at the
Annual Meeting, will be voted in accordance with the specifications made
thereon. Proxies that are properly signed and returned but on which no
specification has been made by the stockholder will be voted for the election
to the Board of Directors of the nominees named herein and in favor of
ratification of the appointment of Coopers & Lybrand L.L.P. as the independent
auditors of the books and accounts of the Company for the fiscal year ending
September 30, 1995. The enclosed form of proxy may be revoked at any time prior
to the exercise thereof by executing a new proxy with a later date, by voting
in person at the Annual Meeting, or by giving written notice to the Secretary
of the Company of revocation at any time before the proxy is voted at the
Annual Meeting. Proxies are revocable by written notice received by the
Secretary of the Company at any time prior to their exercise. Proxies will be
deemed revoked by voting in person at the Annual Meeting.
VOTING SECURITIES
Stockholders of record at the close of business on December 5, 1994
are entitled to notice of and to vote at the Annual Meeting. As of December 5,
1994, the issued and outstanding voting securities of the Company consisted of
55,673,991 shares of common stock, par value $.01 per share (the "Common
Stock"). Each share of Common Stock is entitled to one vote on all matters that
may properly come before the Annual Meeting.
<PAGE> 4
QUORUM AND OTHER MATTERS
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum. Shares of Common Stock represented by a properly signed
and returned proxy will be counted as present at the Annual Meeting for
purposes of determining a quorum, without regard to whether the proxy is marked
as casting a vote or abstaining. Shares of Common Stock held by nominees which
are voted on at least one matter coming before the Annual Meeting will also be
counted as present for purposes of determining a quorum, even if the beneficial
owner's discretion has been withheld (a "broker non-vote") for voting on some
or all other matters.
Directors will be elected by a favorable vote of a plurality of the
shares of Common Stock present, in person or by proxy, at the Annual Meeting
and entitled to vote. Accordingly, abstentions or broker non-votes will not
affect the election of the candidates receiving the plurality of votes.
All other matters to come before the Annual Meeting require the
approval of a majority of the shares of Common Stock present, in person or by
proxy, at the Annual Meeting and entitled to vote. Therefore, abstentions will
have the same effect as votes against the proposals on such matters. Broker
non-votes, however, will be deemed shares not entitled to vote on such matters,
and therefore will not count as votes for or against the proposals, and will
not be included in calculating the number of votes necessary for approval of
such matters.
Votes at the Annual Meeting will be tabulated by an Inspector of
Election appointed by the Company.
The Board of Directors is not aware of any matters that are expected
to come before the Annual Meeting other than those referred to in this Proxy
Statement. If any other matter should come before the Annual Meeting, the
persons named in the accompanying proxy intend to vote such proxies in
accordance with their best judgment.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The following table sets forth information with respect to each
nominee for election as a director. The information as to age, principal
occupation, securities owned and directorships has been furnished by each such
nominee. For more detailed information with respect to Common Stock ownership
by nominees who are executive officers of the Company, see the table in the
section of this Proxy Statement captioned "Principal Stockholders."
-2-
<PAGE> 5
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
OWNED
BENEFICIALLY,
DIRECTLY OR
INDIRECTLY,
AS OF
PRINCIPAL DECEMBER 5, PERCENT
NAME AND AGE OCCUPATION(1) 1994 OF CLASS
------------ ------------- ---- --------
<S> <C> <C> <C>
Gordon A. Cain (82) . . . . . . . Chairman of the Board of 6,032,850 10.8
the Company
J. Virgil Waggoner (67) . . . . . President and Chief 4,568,507 8.2
Executive Officer of
the Company
William A. McMinn (64) . . . . . Chairman of the Board of 154,579 .3
Arcadian Corporation(2)
James J. Kerley (72) . . . . . . Financial Consultant(3) 144,579 .3
Gilbert M. A. Portal (64) . . . . Secretary General, European -- --
Petroleum Industry
Association(4)
Frank J. Pizzitola (71) . . . . . Limited Partner of Lazard 10,000 --
Freres & Company(5)
Raymond R. Knowland (64) . . . . Industrial Consultant(6) 2,500 --
</TABLE>
___________________
(1) Unless otherwise indicated in this table, each director has held his
position in his principal occupation for more than five years. Except
for Messrs. Pizzitola and Knowland, who have served as Directors from
October 1992 and December 1992, respectively, all nominees have served
continuously as directors since 1986. Additionally, Messrs. Cain and
Waggoner have served continuously in their positions as executive
officers of the Company since 1986. For background information on
Messrs. Cain and Waggoner, see the section of this Proxy Statement
captioned "Executive Officers of the Company".
(2) Mr. McMinn was Corporate Vice President and Manager of the industrial
chemical group of FMC Corporation, a manufacturer of machinery and
chemical products, from 1973 through 1985, when he retired. He became
President and Chief Executive Officer of Cain Chemical Inc., a
producer of petrochemicals, in 1987 and served in that capacity until
its acquisition by Occidental Petroleum in May 1988. He became
Chairman of the Board of Directors of Arcadian Corporation, a
fertilizer manufacturer, in August 1990. He has been a director of PM
Holdings Corporation and its principal operating subsidiary Purina
Mills, Inc., a leading manufacturer of animal nutrition products,
since October 1993.
(3) Mr. Kerley has principally been a financial consultant since his
retirement in January 1986. From January 1993 through December 1994,
however, he served as Chairman of the Board of Rohr, Inc. From
September 1981 through December 1985 he was Vice Chairman of the
Board of Directors and Chief Financial Officer of Emerson Electric Co.
For eleven years prior thereto, Mr. Kerley was Chief Financial
Officer of Monsanto Company. Mr. Kerley is a director of Atlantic
Coast Airlines, Inc., Borg Warner Automotive, Inc., D T Industries,
Inc. and ESCO Electronics Corporation. During the past five years,
Mr. Kerley has been, but is no longer, a
-3-
<PAGE> 6
member of the Boards of Directors of various other corporations,
including Mercantile Bancorporation, Mercantile Bank, N.A., GenCorp,
Rohr Industries, Inc., Cetus Corporation, Kellwood Company and Cyprus
Minerals.
(4) Mr. Portal was President of Elf Aquitaine Petroleum, an oil and gas
exploration and production company and a division of Elf Aquitaine,
Inc., and Senior Vice President of Elf Aquitaine, Inc. from 1982 to
1989. In 1989 Mr. Portal became Chairman and Chief Executive Officer
of Elf Exploration, Inc., a position he held until February 1990, at
which time he became Secretary General of the European Petroleum
Industry Association. He is currently a director of Sonat Offshore
Drilling, Inc.
(5) Mr. Pizzitola has been a Limited Partner of Lazard Freres & Co., New
York since January 1994 and was a General Partner thereof from 1973
through 1993. Mr. Pizzitola has been, but is no longer, a member of
the Boards of Directors of I-T-E Imperial, Allied Chemical Co.,
Pirelli Enterprises Corp., Grand Metropolitan plc, Lyonnaise des Eaux
and Westmark International, Inc. He is currently a director of UWR
Corporation, Lyonnaise American Holdings, Inc. and Sipex Corporation.
(6) Mr. Knowland held various directorships and executive positions for
British Petroleum Company plc ("BP") and certain of its subsidiaries
from 1980 until April 1, 1992, including his positions as a Managing
Director of BP from March 1990 to March 1992, Chief Executive Officer
of BP Chemicals (International) Ltd. from December 1983 through March
1990 and Chairman thereof from March 1990 to March 1992. He is
currently a director of Laporte plc, British Nuclear Fuels plc and the
British Standards Institution.
Directors will be elected by the favorable vote of a plurality of the
shares of Common Stock present, in person or by proxy, at the Annual Meeting
and entitled to vote. The Board of Directors recommends a vote FOR each of the
nominees listed and, unless authority to vote for the election of directors is
withheld as to any or all nominees, all shares represented by proxies will be
voted for the election of the nominees listed. If authority to vote for the
election of directors is withheld as to any but not all of the nominees listed,
all shares represented by any such proxy will be voted for the election of the
nominees as to whom authority is not withheld. If a nominee becomes unavailable
for any reason before the election, the shares represented by the proxies will
be voted for such person, if any, as may be designated by the Board of
Directors. However, the Board of Directors has no reason to believe that any
nominee will be unavailable. Any vacancy occurring following the election of
directors may be filled by the Board of Directors.
INFORMATION CONCERNING OPERATION OF THE BOARD OF DIRECTORS
In order to facilitate the various functions of the Board of
Directors, the Board has created two committees: an Audit Committee and a
Compensation Committee. The Board does not have a nominating committee.
The members of the Audit Committee are Messrs. Kerley (Chairman),
Portal, Pizzitola and Knowland. The functions of the Audit Committee are to
recommend to the Board of Directors the retention or discharge of the Company's
independent auditors; review and approve the engagement of the independent
auditors to conduct audits of the Company, including the scope, extent and
procedures of the audits and the fees to be paid therefor; review, in
consultation with the independent auditors, the
-4-
<PAGE> 7
audit results and their proposed opinion letters or audit reports and any
related management letters; review and approve the audited financial statements
of the Company; consult with the independent auditors and management of the
Company, together or separately, on the adequacy of internal accounting
controls and review the results thereof; review the independence of the
independent auditors; review and approve the engagement of the independent
auditors for non-audit services; direct and supervise investigations into
matters within the scope of the Audit Committee's duties; and perform such
other functions as may be necessary or appropriate in the efficient discharge
of its duties.
The members of the Compensation Committee are Messrs. McMinn
(Chairman), Cain, Portal, Pizzitola and Knowland. The functions of the
Compensation Committee include discussing, modifying (if appropriate) and
approving the recommendations of management with regard to the compensation
arrangements of the Company's Chief Executive Officer and other executive
officers, recommending and administering those employee benefit plans that
provide benefits to the Company's executive officers and performing such other
functions as may be necessary or appropriate in the efficient discharge of its
duties.
During the year ended September 30, 1994, the Board of Directors held
five meetings, the Audit Committee held two meetings and the Compensation
Committee held three meetings. No director attended fewer than 75% of all
director and committee meetings, except that Messrs. Cain, Kerley and
Pizzitola each attended three Board of Directors meetings and Mr. Portal
attended four Board of Directors meetings, Messrs. Cain and Portal each
attended two Compensation Committee meetings and Mr. Pizzitola attended one
Compensation Committee meeting, and Messrs. Pizzitola and Portal each attended
one Audit Committee meeting.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION ARRANGEMENTS FOR AND TRANSACTIONS WITH MEMBERS OF THE BOARD OF
DIRECTORS
Members of the Board of Directors of the Company, other than those
directors who are employees of the Company, receive a fee of $16,000 per year
and an attendance fee of $600 per meeting and are reimbursed for travel
expenses for their services as directors. Members of the Board of Directors of
the Company who are employees of the Company do not receive a fee for their
services as directors.
The Company maintains the Sterling Chemicals, Inc. Amended and
Restated Stock Appreciation Rights Plan for Non-Employee Directors (the "SAR
Plan") for the benefit of certain non-employee members of the Board of
Directors. Pursuant to the SAR Plan, each member of the Board of Directors at
the time of the adoption of the SAR Plan who was not an employee of the Company
or any of its subsidiaries (a "Participant") was awarded 40,000 stock
appreciation rights ("SARs"). The aggregate number of SARs that were awarded to
all Participants under the SAR Plan is 200,000. Each of the following members
of the Board of Directors were awarded 40,000 SARs on January 27, 1993 at a
base price of $4.00 per SAR: Messrs. McMinn, Kerley, Knowland, Portal, and
Pizzitola. No SARs were exercised in Fiscal 1994. The SAR Plan was amended in
October 1994 to limit the potential value of the SARs by placing a ceiling on
the amounts that the Company may be required to pay upon the exercise of the
SARs. Participants were given greater flexibility with respect to the dates on
which they may exercise their SARs. Each Participant exercised 25% of his SARs
on October 10, 1994 for the fixed amount payable to him of $9.00 per SAR and is
permitted to exercise up to 50%, 75% and 100%
-5-
<PAGE> 8
of his SARs on September 1, 1995, September 1, 1996, and September 1, 1997,
respectively, for the maximum amount payable on such dates of $9.00 per SAR,
$10.00 per SAR and $11.00 per SAR, respectively, provided the Participant is a
member of the Board of Directors on each such date. All unexercised SARs
terminate at 12:01 a.m. on September 2, 1997.
EXECUTIVE COMPENSATION
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(1)
The Company's executive compensation program is administered by the
Compensation Committee of the Company's Board of Directors, which is composed
of the non-employee directors listed at the end of this report. The Committee's
role is to discharge the compensation responsibilities of the Board of
Directors. In discharging its functions, the Committee discusses, modifies (if
appropriate) and approves the recommendations of management with regard to the
compensation arrangements of the Company's executive officers, including the
Chief Executive Officer, and the other executive officers of the Company who
are named in the Summary Compensation Table. The Company's executive officers,
including those named in the Summary Compensation Table, are referred to
collectively as the "Executive Officers". Additionally, the Compensation
Committee recommends and administers those employee benefit plans that provide
benefits to the Executive Officers. This report sets forth the major components
of Executive Officer compensation and the basis upon which the Compensation
Committee determined Executive Officer compensation (including the compensation
of the Chief Executive Officer) for the fiscal year ended September 30, 1994.
Compensation Policy and Guidelines
The goals of the Company's compensation policy are to align executive
compensation with the Company's long-term business objectives and performance,
to enable the Company to attract and retain high-quality Executive Officers and
other employees who will contribute to the long-term success of the Company
and to reward its Executive Officers and other employees for their successful
efforts in attaining objectives beneficial to the growth and profitability of
the Company.
Since its inception, the Company has maintained the philosophy that
compensation of its Executive Officers and others should be directly and
substantially related to the Company's operating performance. This philosophy
is effectuated by weighing executive compensation heavily towards profit
sharing payments on the basis of the Company's performance using the Company's
earnings before deducting amortization, interest, taxes and SAR accruals
("Threshold Level"). As a result of this philosophy, in years when the Company
has had extraordinary success, its Executive Officers have been well
compensated and in less profitable years, the Executive Officers' compensation
has been negatively impacted to a substantial degree.
________________________
1 Notwithstanding Securities and Exchange Commission ("SEC") filings by
the Company that have incorporated or may incorporate by reference other
SEC filings (including this proxy statement) in their entirety, the Board
Compensation Committee Report on Executive Compensation shall not be
incorporated by reference into such filings and shall not be deemed to be
"filed" with the SEC except as specifically provided otherwise or to the
extent required by Item 402 of Regulation S-K.
-6-
<PAGE> 9
The executive compensation program for fiscal year 1994, as in past
years, consists primarily of (1) base salaries, which are not related directly
to the Company's performance but which are set below median levels based on
comparative industry data, and (2) profit sharing bonuses, which are entirely
based upon the Company's performance, to be paid out of the Company's Salaried
Employees' Profit Sharing Plan ("Plan").
Pursuant to the Plan, each year the Compensation Committee designates
the Threshold Level, which must be met before any profit sharing bonuses are
awarded. Once the Threshold Level is met, profit sharing bonuses are awarded
based upon certain percentages of performance above the Threshold Level. The
Threshold Level is established annually and is intended to provide for all
major cash operating expenditures of the Company, such as debt service, capital
needs and taxes. In general, the calculation used to determine the Threshold
Level on an annual basis would not allow a profit sharing percentage to accrue
if there were no profits. The Board of Directors and the Compensation Committee
believe that the base salary plus profit sharing structure provides proper
incentives to the Executive Officers by directly relating their compensation to
the Company's performance.
The Compensation Committee and the Board of Directors believe that the
executive compensation program, and the incentives related to profit sharing,
should be carried throughout the Company. As a result, the Plan is similar to
the plan in which all other employees of the Company participate. The
Compensation Committee and the Board of Directors believe that the Plan and the
profit sharing plan in effect for the Company's other employees have been
responsible for a great deal of the Company's success and have resulted in a
motivated and efficient work force.
While the Compensation Committee generally follows these guidelines,
the Compensation Committee may from time to time provide additional
compensation to the Company's Executive Officers in connection with promotions,
assignments of additional responsibilities, or other factors which, in the
Compensation Committee's opinion, merit compensation increases.
The Executive Officers own a substantial number of shares of the
Company's Common Stock. Additionally, the Executive Officers and other
employees currently are eligible to acquire interests in Company stock through
the Company's Employee Stock Ownership Plan ("ESOP"), and certain Executive
Officers have been granted shares of restricted stock and SARs all pursuant to
the Omnibus Stock and Incentive Plan. The Committee believes that the current
substantial Common Stock ownership levels of Executive Officers, their
participation in the Company's ESOP and grants of restricted stock and SARs
further encourage long-term performance and Company growth by more closely
aligning the Executive Officers' interests with the equity owners' interests.
The particular elements of the compensation program for the Executive
Officers, including the Chief Executive Officer, for fiscal year ended
September 30, 1994 are explained in more detail below.
Base Salary. The Compensation Committee determines base salary levels
of the Executive Officers, including the Chief Executive Officer, by
referring to published industry reports and surveys on executive
compensation, then sets the base salary levels below base salary
medians of executive officers in other chemical companies with annual
sales of less than $1 billion. Base salaries for Executive Officers,
including the Chief Executive Officer, are not related directly to the
Company's performance. In fiscal year 1994, the base salaries for the
Executive Officers, including the Chief Executive Officer, whose base
salary was $279,166, were well below median industry levels.
-7-
<PAGE> 10
Profit Sharing. The Threshold Level of performance designated by the
Compensation Committee for fiscal year 1994 of $79 million was
exceeded by approximately $34 million. Accordingly, profit sharing
bonuses aggregating $434,343 were paid for fiscal year 1994
performance to the Named Executive Officers, including the Chief
Executive Officer, whose profit sharing bonus was $134,987.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Mr. William A. McMinn
Mr. Gordon A. Cain
Mr. Gilbert M. A. Portal
Mr. Frank J. Pizzitola
Mr. Raymond R. Knowland
STOCK PERFORMANCE GRAPH
The following Stock Performance Graph compares the Company's
cumulative total stockholder return on its Common Stock for a five-year period
with the cumulative total return of the Standard & Poor's Stock Index and the
Standard & Poor's Chemicals Index. The graph assumes $100 was invested on
September 30, 1989 in the Company's Common Stock, the S&P 500 Index and the S&P
Chemicals Index and that dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
BASED ON $100 INVESTED ON SEPTEMBER 30, 1989 IN STOCK IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER SEPTEMBER 30.
Sterling
Chemicals, Inc. S&P 500 S&P Chemicals
--------------- ------- -------------
SEP-89 100 100 100
SEP-90 78 91 75
SEP-91 74 119 110
SEP-92 61 132 121
SEP-93 56 149 130
SEP-94 210 155 171
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<PAGE> 11
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company
for the three fiscal years ended September 30, 1994, to (i) its Chief Executive
Officer, (ii) its four most highly compensated Executive Officers whose salary
and bonus received from the Company for services rendered during fiscal 1994
exceeded $100,000 and who were serving as Executive Officers at the end of
fiscal 1994, and (iii) an individual who served as an Executive Officer of the
Company during fiscal 1994 and for whom disclosure would have been required but
for the fact that he was not serving as an Executive Officer at the end of
fiscal 1994 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- ------------------------ -------
OTHER SECURITIES
NAME ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
AND COMPEN- STOCK OPTIONS/ PAY- COMPEN-
PRINCIPAL SALARY BONUS SATION AWARD(S) SARS OUTS SATION
POSITION YEAR ($)(1) ($)(2) ($)(3) ($) (#) ($) ($)(4)
-------- ---- ------ ------ ------ --- --- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Virgil Waggoner, 1994 $279,166 $134,987 $ -0- $ -0- -0- $ -0- $10,408
President and 1993 275,000 -0- -0- -0- -0- -0- 9,967
Chief Executive 1992 275,000 -0- -0- -0- -0- -0- 10,425
Officer
Robert W. Roten, 1994 177,500 71,579 -0- -0- -0- -0- 7,858
Executive Vice 1993 175,000 -0- -0- -0- -0- -0- 8,505
President and Chief 1992 175,000 -0- -0- -0- -0- -0- 8,531
Operating Officer
Robert N. Bannon, 1994 152,500 61,353 -0- -0- -0- -0- 6,737
Vice President - 1993 150,000 -0- -0- -0- -0-/262,500 -0- 7,290
Operations 1992 143,750 -0- -0- -0- 13,125/-0- -0- 7,289
Richard K. Crump, 1994 152,500 61,353 -0- -0- -0- -0- 6,737
Vice President - 1993 150,000 -0- -0- -0- -0- -0- 7,290
Commercial 1992 143,750 -0- -0- -0- -0- -0- 7,289
J. David Heaney, 1994 150,000 61,353 -0- -0- -0- -0- 6,728
Vice President 1993 150,000 -0- -0- -0- -0- -0- 7,290
Finance and 1992 143,750 -0- -0- -0- -0- -0- 7,289
Chief Financial
Officer(5)
F. Maxwell Evans 1994 142,500 43,718 -0- -0- -0- -0- 6,391
Secretary and 1993 135,000 -0- -0- -0- -0-/236,260 -0- 992
General Counsel 1992 11,250(6) -0- -0- 135,000(7) 11,813/-0- -0- 42
</TABLE>
___________________
1 Includes amounts deferred under the Company's 401(k) Savings and
Investment Plan.
2 Paid pursuant to the Company's Profit Sharing Plan.
3 Although the Named Executive Officers receive limited perquisites,
such as reimbursement of club dues used for entertainment, the value
of such perquisites does not exceed 10% of the salary of any of the
Named Executive Officers.
4 For fiscal year 1994, All Other Compensation includes matching
contributions paid by the Company pursuant to the Company's 401(k)
Savings and Investment Plan, as follows: Mr. Waggoner, $9,403, Mr.
Roten, $7,219, Mr. Bannon, $6,188, Mr. Crump, $6,188, Mr. Heaney,
$6,188 and Mr. Evans, $5,878; and premiums for group term life
insurance paid
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<PAGE> 12
by the Company as follows: Mr. Waggoner, $1,005, Mr. Roten, $639, Mr.
Bannon, $549, Mr. Crump, $549, Mr. Heaney, $540 and Mr. Evans, $513.
5 Mr. Heaney resigned from the Company effective September 6, 1994.
6 Mr. Evans joined the Company on September 1, 1992.
7 Pursuant to the Company's Omnibus and Incentive Plan, Mr. Evans was
awarded 33,750 shares of restricted stock on September 1, 1992. The
value of the restricted stock award was determined by multiplying the
fair market value of the Company's Common Stock on the date of grant
($4.00/share) by the number of shares awarded. Under the terms of the
grant, 20% of the restricted shares vested on September 1, 1993 and
20% will vest on each September 1 thereafter. As the owner of such
restricted stock, Mr. Evans is entitled to receive dividends (if any)
with respect thereto. As of September 30, 1994, 13,500 shares of such
restricted stock had vested, and Mr. Evans held 20,250 shares of
unvested restricted stock, which had a value as of such date of
$273,375. None of the other Named Executive Officers own any
restricted stock.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1994 AND YEAR-END OPTION/SAR VALUES
The following table provides information on option and SAR exercises
in fiscal 1994 by the Named Executive Officers and the value of such officers'
unexercised options and SARs at September 30, 1994.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED VALUE SEPTEMBER 30, 1994 (#) SEPTEMBER 30, 1994 ($)
ON REALIZED -------------------------- -----------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Virgil Waggoner -0- $-0- -0- -0- $-0- $-0-
Robert W. Roten -0- -0- -0- -0- -0- -0-
Robert N. Bannon -0- -0- -0- -0-/262,500(1) -0- -0-/$2,493,750
Richard K. Crump -0- -0- -0- -0- -0- -0-
F. Maxwell Evans -0- -0- -0- -0-/236,260(1) -0- -0-/$2,244,470
J. David Heaney -0- -0- -0- -0- -0- -0-
</TABLE>
__________________
(1) In September, 1992, the Company initiated a Stock Appreciation Rights
Program ("Program") pursuant to the Omnibus Stock and Incentive Plan, to
provide additional compensation to certain Executive Officers and other
employees of the Company. Under the Program, the Company offered each
participant the right to purchase a specified number of shares of the
Company's Common Stock and granted 20 SARs for each share purchased. In
fiscal 1993, Messrs. Bannon and Evans purchased 13,125 and 11,813 shares,
respectively, and were granted 262,500 and 236,260 SARs, respectively.
During the first quarter of fiscal 1995, the participants unanimously
agreed, at the Company's request, to amend the Program to, among other
things, limit the potential value of the SARs by placing a ceiling on the
amounts that the Company may be required to pay upon exercise of the SARs.
Under the amended Program, Messrs. Bannon and Evans each exercised a
portion of his SARs on October 10, 1994. The remaining SARs are
exercisable at various times through September 1, 1997.
PENSION PLANS
The Company has established a Salaried Employees' Pension Plan (the
"Pension Plan") covering substantially all salaried employees, including the
Company's Executive Officers. Pension costs are
-10-
<PAGE> 13
borne solely by the Company and determined annually on an actuarial basis with
contributions made accordingly. The pension benefits payable under the Pension
Plan for individuals hired by Monsanto Company ("Monsanto") (from which the
Company acquired its Texas City facilities) prior to April 1, 1986 are based on
such individual's vesting percentage times years of service multiplied by 1.4%
of Average Earnings (as defined). Individuals hired by Monsanto on or after
April 1, 1986 and other individuals hired by the Company receive a pension
payable under the Pension Plan based on such individual's vested percentage
times years of service multiplied by 1.2% of Average Earnings (as defined).
Average Earnings excludes amounts received under the Company's Profit Sharing
Plan and is generally defined as the greater of (i) average compensation
received during the highest three of the final five calendar years of
employment or (ii) average compensation received during the final 36 months of
employment.
For those Company employees who were (i) employed by the Company prior
to October 1, 1986, (ii) previously employed by Monsanto and (iii) accruing a
Monsanto pension plan benefit, the Company recognizes Monsanto pension plan
years of service offset by any vested benefit under the Monsanto pension plan.
For those Company employees as of August 21, 1992 who were (i) previously
employed by Albright & Wilson based in the United States and (ii) participants
in the Tenneco, Inc. Retirement Plan, the Company recognizes Tenneco, Inc.
Retirement Plan years of service offset by any vested benefit under that plan.
A participant will become vested only after five years of service or at age 65.
Table A illustrates the annual normal retirement benefits payable
under the Pension Plan based on 1.4% of Average Earnings, without reduction for
any offset amounts. Table B illustrates the annual normal retirement benefits
payable under the Pension Plan based on 1.2% of Average Earnings, without
reduction for any offset amounts. Such benefit levels assume retirement at age
65, the years of service shown, continued existence of the Pension Plan without
substantial change and payment in the form of a single life annuity.
<TABLE>
<CAPTION>
Table A
YEARS OF SERVICE
-----------------------------------------------------------
AVERAGE EARNINGS 10 20 30 40
---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 50,000 . . . . . . . . . . $ 7,000 $14,000 $21,000 $28,000
100,000 . . . . . . . . . . 14,000 28,000 42,000 56,000
150,000 . . . . . . . . . . 21,000 42,000 63,000 84,000
200,000 . . . . . . . . . . 21,000 42,000 63,000 84,000
250,000 . . . . . . . . . . 21,000 42,000 63,000 84,000
300,000 . . . . . . . . . . 21,000 42,000 63,000 84,000
350,000 . . . . . . . . . . 21,000 42,000 63,000 84,000
</TABLE>
<TABLE>
<CAPTION>
Table B
YEARS OF SERVICE
-----------------------------------------------------------
AVERAGE EARNINGS 10 20 30 40
---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 50,000 . . . . . . . . . . $ 6,000 $12,000 $18,000 $24,000
100,000 . . . . . . . . . . 12,000 24,000 36,000 48,000
150,000 . . . . . . . . . . 18,000 36,000 54,000 72,000
200,000 . . . . . . . . . . 18,000 36,000 54,000 72,000
250,000 . . . . . . . . . . 18,000 36,000 54,000 72,000
300,000 . . . . . . . . . . 18,000 36,000 54,000 72,000
350,000 . . . . . . . . . . 18,000 36,000 54,000 72,000
</TABLE>
The benefits under the Pension Plan are computed by multiplying
Average Earnings by credited years of service times the respective percentages
referred to above. The benefits payable under the Pension Plan are not reduced
by any benefits payable under Social Security or other offset amounts.
-11-
<PAGE> 14
The benefits payable to Table A participants are reduced by the amount of
pension benefits which participants may be entitled to under Monsanto's pension
plan. Compensation covered by the Pension Plans consists of base salary only.
The number of credited years of service of each of the Named Executive Officers
are as follows: J. Virgil Waggoner - 38 years; Robert W. Roten - 33 years;
Richard K. Crump - 8 years; F. Maxwell Evans - 2 years; Robert N. Bannon - 23
years; and J. David Heaney (who resigned effective September 6, 1994) - 8
years.
BENEFIT EQUALIZATION PLAN
The Company maintains the Sterling Chemicals, Inc. Pension Benefit
Equalization Plan (the "Equalization Plan"). The Equalization Plan provides
additional benefits to employees whose retirement benefits under the Pension
Plan are reduced, curtailed or otherwise limited as a result of certain
limitations under the Code. The additional benefits provided by the
Equalization Plan are in an amount equal to the benefits under the Pension Plan
which are reduced, curtailed or limited by reason of the application of such
limitations. All employees who participate in the Pension Plan are eligible to
participate in the Equalization Plan. Benefits have been paid to participants
under the Equalization Plan and such benefits are generally payable at the
time, and in the manner, benefits are payable under the Pension Plan.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
The Company maintains the Sterling Chemicals, Inc. Supplemental
Employee Retirement Plan (the "Supplemental Plan"). The Supplemental Plan also
provides additional benefits to certain employees whose retirement benefits
under the Pension Plan are reduced, curtailed or otherwise limited because such
employee's annual compensation is in excess of $150,000 or because certain
Social Security integration benefits were removed from the Pension Plan. The
additional benefits provided by the Supplemental Plan are in an amount equal to
the benefits under the Pension Plan which are reduced, curtailed or limited by
reason of the applications of such limitations. Only those employees who are a
part of management or are "highly compensated" and are selected by the
Compensation Committee may participate in the Supplemental Plan. No benefits
have been paid to participants under the Supplemental Plan and such benefits
are generally payable at the time, and in the manner, benefits are payable
under the Pension Plan.
Assuming retirement at age 65, or their current age, if older, and the
continuation of their current levels of base salary until such retirement,
total retirement benefits under the Equalization Plan and/or the Supplemental
Plan payable to Messrs. Waggoner, Roten, Evans, Crump and Bannon will be
$110,068, $86,098, $29,226, $53,616, and $85,389 per year, respectively,
reduced by the value of the benefits payable under the Pension Plan, which are
$41,437, $56,697, $29,226, $44,680, and $69,105, respectively. Mr. Heaney
resigned effective September 6, 1994 and has no supplemental retirement
benefits payable to him under the Supplemental Plan as a result of offsetting
benefits of $14,729 payable to him under the Pension Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. McMinn
(Chairman), Cain, Portal, Pizzitola and Knowland. Mr. McMinn served, during
fiscal 1994, as a director and Chairman of the Board of Arcadian Corporation
("Arcadian") and was a member of the Compensation Committee of Arcadian. Mr.
McMinn also served, in fiscal 1994, as a director of the Company and was a
member
-12-
<PAGE> 15
of the Compensation Committee. The Chairman of the Board of the Company in
fiscal 1994 was Mr. Cain, who served on the Compensation Committee of the
Company. Mr. Cain also served, during fiscal 1994, as a director of Arcadian
and was a member of the Compensation Committee of Arcadian Corporation. Mr.
Cain received no compensation for his role as Chairman of the Board of the
Company beyond his compensation as a director of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership, as "beneficial ownership" is defined under Rule 13d-3
under the Securities Exchange Act of 1934, as amended, of the Common Stock as
of December 5, 1994, by (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock,
(ii) each director and nominee for director of the Company, (iii) each Named
Executive Officer of the Company, and (iv) all of the directors and executive
officers as a group. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially owned.
The information is based upon information furnished to the Company by each
individual or entity named below.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP
NAME AND ADDRESS OF COMMON PERCENT OF OUTSTANDING
OF BENEFICIAL OWNER STOCK COMMON STOCK
------------------- ----- ------------
<S> <C> <C>
Gordon A. Cain . . . . . . . . . . . . . . . . . . . . . . . . 6,032,850(1) 10.8
1200 Smith Street
Suite 1900 Houston, Texas 77002-4312
Merrill Lynch Trust Company of Texas, . . . . . . . . . . . . . 6,437,528(2) 11.6
Trustee for the Sterling
Chemicals, Inc. Employee
Stock Ownership Plan
5910 North Central Expressway
Suite 900
Dallas, Texas 75208
J. Virgil Waggoner . . . . . . . . . . . . . . . . . . . . . . 4,568,507(3) 8.2
1200 Smith Street
Suite 1900 Houston, Texas 77002-4312
William A. McMinn . . . . . . . . . . . . . . . . . . . . . . . 154,579 *
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
James J. Kerley . . . . . . . . . . . . . . . . . . . . . . . . 144,579 *
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
Gilbert M.A. Portal . . . . . . . . . . . . . . . . . . . . . . -- --
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
Frank J. Pizzitola . . . . . . . . . . . . . . . . . . . . . . 10,000 *
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
</TABLE>
-13-
<PAGE> 16
<TABLE>
<S> <C> <C>
Raymond R. Knowland . . . . . . . . . . . . . . . . . . . . . . 2,500 *
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
Robert W. Roten . . . . . . . . . . . . . . . . . . . . . . . . 1,101,088(4) 2.0
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
Robert N. Bannon . . . . . . . . . . . . . . . . . . . . . . . 261,985(5) *
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
Richard K. Crump . . . . . . . . . . . . . . . . . . . . . . . 655,433(6) 1.2
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
J. David Heaney . . . . . . . . . . . . . . . . . . . . . . . . 732,652(7) 1.3
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
F. Maxwell Evans . . . . . . . . . . . . . . . . . . . . . . . 46,709(8) *
1200 Smith Street
Suite 1900
Houston, Texas 77002-4312
All executive officers and directors
of the Company as a group
(15 persons) . . . . . . . . . . . . . . . . . . . . . . . . . 14,236,821(1)(3)(9) 25.6
</TABLE>
______________________
*Less than 1%
(1) Includes 375,000 shares held in Mr. Cain's Keogh Plan, over which Mr.
Cain has sole voting power and excludes 600,000 shares with respect to
which Mr. Cain disclaims beneficial ownership, held by a private
family foundation for which Mr. Cain serves as the Chairman of the
Board of Trustees.
(2) Merrill Lynch Trust Company of Texas disclaims beneficial ownership
with respect to the shares of Common Stock held in its capacity as
Trustee of the Sterling Chemicals, Inc. Employee Stock Ownership Plan
("ESOP").
(3) Excludes 50,602 shares held by Mr. Waggoner's wife, with respect to
which Mr. Waggoner disclaims beneficial ownership. Includes 76,139
shares over which Mr. Waggoner has sole voting power held by Merrill
Lynch Trust Company of Texas, as Trustee of the ESOP as of September
30, 1994 and allocated to Mr. Waggoner's account.
(4) Includes 47,940 shares over which Mr. Roten has sole voting power held
by Merrill Lynch Trust Company of Texas, as Trustee of the ESOP as of
September 30, 1994 and allocated to Mr. Roten's account.
(5) Includes 27,837 shares over which Mr. Bannon has sole voting power
held by Merrill Lynch Trust Company of Texas, as Trustee of the ESOP
as of September 30, 1994 and allocated to Mr. Bannon's account.
-14-
<PAGE> 17
(6) Includes 36,291 shares over which Mr. Crump has sole voting power held
by Merrill Lynch Trust Company of Texas, as Trustee of the ESOP as of
September 30, 1994 and allocated to Mr. Crump's account.
(7) Includes 37,618 shares over which Mr. Heaney has sole voting power
held by Merrill Lynch Trust Company of Texas, as Trustee of the ESOP
as of September 30, 1994 and allocated to Mr. Heaney's account.
(8) Include 1,146 shares over which Mr. Evans has sole voting power held
by Merrill Lynch Trust Company of Texas, as Trustee of the ESOP as of
September 30, 1994 and allocated to Mr. Evans account.
(9) Includes 278,270 shares held by Merrill Lynch Trust Company of Texas,
as Trustee of the ESOP and allocated through September 30, 1994 to the
accounts of such officers.
EXECUTIVE OFFICERS OF THE COMPANY
The following list sets forth the names, ages and offices of the
executive officers of the Company. The periods during which such persons have
served in such capacities are indicated in the description of business
experience of such persons below. Each of such persons has held his position
with the Company as described since 1986, unless otherwise indicated.
<TABLE>
<CAPTION>
NAME AND AGE POSITION WITH THE COMPANY
- - ------------ -------------------------
<S> <C>
Gordon A. Cain (82) . . . . . . . . . . . . . . . . . . Chairman of the Board of Directors
J. Virgil Waggoner (67) . . . . . . . . . . . . . . . . President, Chief Executive Officer and Director
Robert W. Roten (60) . . . . . . . . . . . . . . . . . Executive Vice President and Chief Operating Officer
Jim P. Wise (51) . . . . . . . . . . . . . . . . . . . Vice President - Finance and Chief Financial Officer
Richard K. Crump (48) . . . . . . . . . . . . . . . . . Vice President - Commercial
Robert N. Bannon (49) . . . . . . . . . . . . . . . . . Vice President - Operations
Stewart H. Yonts (49) . . . . . . . . . . . . . . . . . Treasurer
F. Maxwell Evans (50) . . . . . . . . . . . . . . . . . General Counsel and Secretary
J. David Heaney (46) . . . . . . . . . . . . . . . . . Vice President - Finance and Chief Financial Officer (Resigned)
Ben L. Roberts (49) . . . . . . . . . . . . . . . . . . Treasurer and Assistant Secretary (Resigned)
</TABLE>
Mr. Cain is President of Beta Consulting, Inc., a consulting and
investment company. From August 1982 until December 31, 1992, he was Chairman
of the Board of The Sterling Group, Inc., a firm organized in 1982 which
specializes in leveraged acquisitions. Mr. Cain has been on the Board of
Directors of Arcadian Corporation since May 1989 and Atlantic Coast Airlines,
Inc. since November 1991. Mr. Cain has been Chairman of the Board of Ultrair,
Inc. since November 1992. Prior to organizing The Sterling Group, Inc., Mr.
Cain was involved in the purchase of a variety of businesses and provided
consulting services to these and other companies. Mr. Cain was also Chairman of
the
-15-
<PAGE> 18
Board of Cain Chemical, Inc. from its organization in March 1987 until its
acquisition by Occidental Petroleum Corporation in May 1988 and the Chairman of
the Board of Vista Chemical Company from July 1984 until October 1986.
Mr. Waggoner has been on the Boards of Directors of Kirby Corporation
and Mail-Well Holdings, Inc. since July 1993 and February 1994, respectively.
Mr. Waggoner was President of El Paso Products Company (now a subsidiary of
Rexene Corporation), a commodity chemicals and plastics company, from 1980 to
1983 and was a self-employed industry consultant from 1983 to 1986. From 1950
to 1980 Mr. Waggoner was employed by Monsanto Company, last serving as Group
Vice President and Managing Director of Monsanto's Plastics and Resins Company.
Mr. Roten was President of Materials Exchange, Inc., a Houston-based
petrochemical and plastics marketing firm, from 1983 until 1986. Mr. Roten
spent the first 25 years of his career with Monsanto Company and served as Vice
President for sales and marketing for El Paso Products Company from 1981 to
1983. He served as Vice President--Commercial of the Company from August 1986
until September 1991, when he became Vice President--Corporate Development. Mr.
Roten became Executive Vice President and Chief Operating Officer in April
1993.
Mr. Heaney was a member of the law firm of Bracewell & Patterson of
Houston, Texas, from 1980 until 1986. He served as Vice President--
Administration and Secretary of the Company from August 1986 until August 1,
1992, when he became Vice President--Finance and Chief Financial Officer. He
served in that capacity until his resignation effective September 6, 1994.
Mr. Wise was employed by Transco Energy Company, most recently as
Executive Vice President, Chief Financial Officer and a member of the Board of
Directors from November 1982 until September 1991. From September 1991 to July
1994, he was Chairman and Chief Executive Officer of Neostar Group, Inc., a
private investment banking and financial advisory firm. From July 1994 to
September 1994, he was Senior Vice President and Chief Financial Officer of
U.S. Delivery Systems, Inc. Mr. Wise joined the Company on September 26, 1994
as Vice President-Finance and Chief Financial Officer.
Mr. Crump was Vice President of Sales for Rammhorn Marketing from 1984
to August 1986 and Vice President of Materials Management for El Paso Products
Company from 1976 through 1983. He served as Director--Commercial of the
Company from August 1986 until October 1991, when he became Vice
President--Commercial.
Mr. Bannon was employed by Monsanto Company for 15 years, most
recently as Manager, Strategic Operations-Sales. He became a Director in the
Company's Commercial Department in August, 1986. He became the Director of
Manufacturing for the Company in October 1989, and served in that capacity
until he became Vice President--Operations in October 1991. Mr. Bannon has
been the President of Sterling Pulp Chemicals, Ltd. since August 1992 and is a
Director of Mainland Bank in Texas City, Texas.
Mr. Roberts for more than five years prior to 1986 was employed by Roy
M. Huffington, Inc., a private, international oil and gas company with
headquarters in Houston, Texas, most recently as Vice President, Financial
Administration of the Indonesian Joint Venture Division. He served as Treasurer
and Assistant Secretary until his resignation effective September 30, 1994.
-16-
<PAGE> 19
Mr. Yonts was the Tax Manager of the Company from August 1986 to
November 1989 and Manager of Taxes and Benefits Accounting from November 1989
until he became the Treasurer on October 1, 1994.
Mr. Evans was a member of the law firm of Bracewell & Patterson of
Houston, Texas from 1979 through December 1991. He received an LL.M. in
Environmental Law in August 1992. He became General Counsel and Secretary of
the Company on September 1, 1992.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company.
Solicitations of proxies are being made by the Company through the mail, and
may also be made in person or by telephone. Employees and directors of the
Company may be utilized in connection with such solicitation. The Company will
also request brokers and nominees to forward soliciting materials to the
beneficial owners of the stock held of record by such persons and will
reimburse them for their reasonable forwarding expenses.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The stockholders will be asked to ratify the appointment of Coopers &
Lybrand L.L.P. as independent auditors of the books and accounts of the Company
for the fiscal year ending September 30, 1995.
The Board of Directors recommends a vote FOR the proposal to ratify
such appointment and, unless authority to vote for the appointment is withheld,
all shares represented by proxies will be voted for the appointment. The
ratification of the appointment of Coopers & Lybrand L.L.P. will require the
affirmative vote of the holders of a majority vote of the shares of Common
Stock present, in person or by proxy, at the Annual Meeting.
Representatives of Coopers & Lybrand L.L.P. will be present at the
Annual Meeting, will be given an opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate questions.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
In order for stockholder proposals to be included in the Company's
Proxy Statement and proxy relating to the Company's 1996 Annual Meeting of
Stockholders, such proposals must be received by the Company at its principal
executive offices not later than August 22, 1995.
OTHER MATTERS
The Board of Directors does not intend to bring any other matters
before the meeting and has not been informed that any other matters are to be
presented by others. In the event any other matters properly come before the
meeting, the persons named in the enclosed form of proxy will vote all proxies
in accordance with their best judgment on such matters.
Whether or not you are planning to attend the meeting, you are urged
to complete, date and sign the enclosed proxy and return it in the enclosed
stamped envelope at your earliest convenience.
-17-
<PAGE> 20
By Order of the Board of Directors
F. MAXWELL EVANS
---------------------------------------------
F. Maxwell Evans
Secretary
<PAGE> 21
________________________________________________________________________________
PROXY STERLING CHEMICALS, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JANUARY 25, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints J. Virgil Waggoner and
William A. McMinn, and each of them, attorneys and agents, with full power of
substitution to vote as proxy all the shares of Common Stock standing in the
name of the undersigned at the Annual Meeting of Stockholders of Sterling
Chemicals, Inc. ("Company") to be held at Texas Commerce Center Auditorium, 601
Travis Street, Houston, Texas at 9:00 A.M., Houston time, on Wednesday,
January 25, 1995, and at any adjournments thereof, in accordance with the
instructions noted below, and with discretionary authority with respect to such
other matters, not known or determined at the time of the solicitation of this
proxy, as may properly come before said meeting or any adjournments thereof.
Receipt of notice of the meeting and Proxy Statement dated December 19, 1994 is
hereby acknowledged.
The undersigned hereby revokes any proxies heretofore given and directs
said attorneys to act or vote as follows:
(1) ELECTION OF DIRECTORS
/ / FOR all nominees listed below (except as marked to the contrary
below)
Gordon A. Cain William A. McMinn James J. Kerley
Raymond R. Knowland J. Virgil Waggoner Frank J. Pizzitola
Gilbert M. A. Portal
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
________________________________________________________________________________
(2) PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P., as
independent auditors of the books and accounts of Sterling Chemicals,
Inc. for the year ending September 30, 1995.
/ / FOR / / AGAINST / / ABSTAIN
(TO BE SIGNED ON REVERSE HEREOF)
________________________________________________________________________________
________________________________________________________________________________
(PROXY -- CONTINUED FROM OTHER SIDE)
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED IN
ACCORDANCE WITH THE STOCKHOLDER'S SPECIFICATIONS HEREON. IN THE ABSENCE OF SUCH
SPECIFICATION, THE PROXY WILL BE VOTED IN FAVOR OF EACH NOMINEE FOR DIRECTOR
AND "FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND.
Dated______________________, 19_____
___________________________________________
Signature of Stockholder*
___________________________________________
Signature of Stockholder*
___________________________________________
Signature of Stockholder*
*Please sign as name appears hereon. Joint
owners each should sign. When signing as
attorney, trustee, administrator,
executor, etc., please indicate your full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE, AND PROMPTLY RETURN THIS PROXY
USING THE ENCLOSED ENVELOPE.
________________________________________________________________________________
