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EXHIBIT 10.3
STERLING CHEMICALS HOLDINGS, INC.
Omnibus Stock Awards and Incentive Plan
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(As Amended)
I. PURPOSE
The purpose of the STERLING CHEMICALS HOLDINGS, INC. OMNIBUS
STOCK AWARDS AND INCENTIVE PLAN (the "Plan") is to provide a means through
which STERLING CHEMICALS HOLDINGS, INC., a Delaware corporation (the
"Company"), and its Subsidiaries (as defined herein), may attract able persons
to enter the employ of the Company and its Subsidiaries and to provide a means
whereby those employees upon whom the responsibilities of the successful
administration and management of the Company and its Subsidiaries rest, and
whose present and potential contributions to the welfare of the Company and its
Subsidiaries are of importance, can acquire and maintain stock ownership,
thereby strengthening their concern for the welfare of the Company and its
Subsidiaries and their desire to remain in the Company's and its Subsidiaries'
employ. A further purpose of the Plan is to provide such employees with
additional incentive and reward opportunities designed to enhance the
profitable growth of the Company and its Subsidiaries. Accordingly, the Plan
provides for granting Incentive Stock Options, Nonqualified Stock Options,
Stock Appreciation Rights, Restricted Stock Awards, Performance Awards, Phantom
Stock Awards, or any combination of the foregoing, as is best suited to the
circumstances of the particular employee as provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan
unless specifically modified by any paragraph:
(a) "Affiliates" means any "parent corporation" of the Company
and any "subsidiary" of the Company within the meaning of Code Sections
424(e) and (f), respectively.
(b) "Agreement" means, individually or collectively, any Option
Agreement, Performance Award Agreement, Phantom Stock Award Agreement,
Restricted Stock Agreement and Stock Appreciation Rights Agreement.
(c) "Award" means, individually or collectively, any Option,
Restricted Stock Award, Phantom Stock Award, Performance Award or Stock
Appreciation Right.
(d) "Board" means the Board of Directors of the Company.
(e) "Change of Control" means the occurrence of any of the
following events: (i) the Company shall not be the surviving entity in
any merger, consolidation or other reorganization (or survives only as a
subsidiary of an entity other than a previously wholly-owned subsidiary
of the Company), (ii) the Company sells, leases or exchanges all or
substantially all of its assets to any other person or entity (other
than a wholly-owned subsidiary of the Company), (iii) the Company is to
be dissolved and liquidated, (iv) any person or entity, including a
"group" as contemplated by Section 13(d)(3) of the 1934 Act, acquires or
gains ownership or control (including, without limitation, power to
vote) of more than 50% of the outstanding shares of the Company's voting
stock (based upon voting power), or (v) as a result of or in connection
with a contested election of
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directors, the persons who were directors of the Company before such
election shall cease to constitute a majority of the Board.
(f) "Change of Control Value" shall mean (i) the per share price
offered to stockholders of the Company in any such merger,
consolidation, reorganization, sale of assets or dissolution
transaction, (ii) the price per share offered to stockholders of the
Company in any tender offer or exchange offer whereby a Change of
Control takes place, or (iii) if such Change of Control occurs other
than in (i) or (ii) above, the Fair Market Value per share of the shares
into which Awards are exercisable, as determined by the Committee,
whichever is applicable. In the event that the consideration offered to
stockholders of the Company consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to any section and any
regulations under such section.
(h) "Committee" means the Compensation Committee of the Board
which shall be (i) constituted so as to permit the Plan to comply with
Rule16b-3 and (ii) constituted solely of "outside directors," within the
meaning of section 162(m) of the Code and applicable interpretive
authority thereunder.
(i) "Company" means Sterling Chemicals Holdings, Inc. and any
successors thereto.
(j) "Director" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable corporate
law who is serving on the Board on the date the Plan is adopted by the
Board or is elected to the Board after such date.
(k) "Disabled" means a Holder who is on Long-Term Disability as
defined in the Pension Plan.
(l) An "employee" means any person (including an officer or a
Director) in an employment relationship with the Employer.
(m) "Employer" means the Company, an Affiliate or any Subsidiary.
(n) "Fair Market Value" means, with respect to a share of Stock
as of any specified date, (i) if the Stock is listed on a national stock
exchange the mean of the high and low sales prices of the Stock reported
on the stock exchange composite tape on that date, or if no prices are
reported on that date, on the last preceding date on which such prices
of Stock are so reported; or (ii) in the event the Stock is not traded
on a national stock exchange, the fair market value of a share of Stock
determined by the Committee in such reasonable manner as it deems
appropriate.
(o) "Forfeiture Restrictions" means with regard to shares of
Stock that are subject to a Restricted Stock Award, restrictions placed
on a Holder's disposition of such shares under certain circumstances or
an obligation of a Holder to forfeit and surrender such shares under
certain circumstances.
(p) "Holder" means an employee who has been granted an Award.
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(q) "Incentive Stock Option" means an incentive stock option
within the meaning of section 422(b) of the Code.
(r) "Initial Public Offering" or "IPO" means the consummation of
an underwritten public offering of Stock pursuant to a registration
statement of the Company filed under the Securities Act of 1933, as
amended, after the effective date of the Plan (other than any
registration statement (a) relating to warrants, options or shares of
capital stock of the Company granted or to be granted or sold primarily
to employees, directors, or officers of the Company, (b) filed in
connection with a transaction described in Rule 145 under the Securities
Act of 1933, as amended, or any successor rule, (c) relating to employee
benefit plans or interests therein, or (d) primarily relating to
preferred stock or other securities issued in connection with any
financing by the Company which is principally debt or preferred stock
financing) wherein the aggregate net proceeds (after deducting all
costs, discounts, commissions and other expenses of the offering) to the
Company are at least $100,000,000.
(s) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(t) "Nonqualified Stock Option" means an option granted under
Paragraph VII of the Plan to purchase Stock which does not constitute an
Incentive Stock Option.
(u) "Option" means an Award granted under Paragraph VII of the
Plan and includes both Incentive Stock Options to purchase Stock and
Nonqualified Stock Options to purchase Stock.
(v) "Optionee" means a Holder who has been granted an Option.
(w) "Option Agreement" means a written agreement between the
Company and a Holder with respect to an Option.
(x) "Pension Plan" means the Sterling Chemicals, Inc. Amended and
Restated Salaried Employees' Pension Plan (Effective as of May 1, 1996).
(y) "Performance Award" means an Award granted under Paragraph X
of the Plan.
(z) "Performance Award Agreement" means a written agreement
between the Company and a Holder with respect to a Performance Award.
(aa) "Phantom Stock Award" means an Award granted under Paragraph
XI of the Plan.
(bb) "Phantom Stock Award Agreement" means a written agreement
between the Company and a Holder with respect to a Phantom Stock Award.
(cc) "Plan" means the Sterling Chemicals Holdings, Inc. Omnibus
Stock Awards and Incentive Plan, as amended from time to time.
(dd) "Restricted Stock Agreement" means a written agreement
between the Company and a Holder with respect to a Restricted Stock
Award.
(ee) "Restricted Stock Award" means an Award granted under
Paragraph IX of the Plan.
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(ff) "Retirement" means a Holder's Early Retirement, Normal
Retirement or Late Retirement as set forth in the Pension Plan.
(gg) "Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934
Act, as such may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or a similar function.
(hh) "Spread" means, in the case of a Stock Appreciation Right,
an amount equal to the excess, if any, of the Fair Market Value of a
share of Stock on the date such right is exercised over the exercise
price of such Stock Appreciation Right; provided, however, the Committee
may establish, in its sole discretion, in any Stock Appreciation Rights
Agreement, the maximum amount of Spread attributable to a Stock
Appreciation Right.
(ii) "Stock" means the common stock, $0.01 par value of the
Company.
(jj) "Stock Appreciation Right" means an Award granted under
Paragraph VIII of the Plan.
(kk) "Stock Appreciation Rights Agreement" means a written
agreement between the Company and a Holder with respect to an Award of
Stock Appreciation Rights.
(ll) "Subsidiary" means any corporation or entity of which more
than 50% of the outstanding securities or ownership interests having
ordinary voting power to elect a majority of the members of the Board of
Directors, or persons in similar capacity of such corporation or entity,
is, directly or indirectly owned by the Company.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon the date of its adoption by the
Board, provided that the Plan is approved by the stockholders of the Company
within twelve months thereafter. No further Awards may be granted under the
Plan after the expiration of ten years from the date of its adoption by the
Board. The Plan shall remain in effect until all Awards granted under the Plan
have been satisfied or expired.
IV. ADMINISTRATION
(a) Committee. The Plan shall be administered by the Committee.
(b) Powers. Subject to the provisions of the Plan, the Committee
shall have sole authority, in its discretion, to determine which employees
shall receive an Award, the time or times when such Award shall be made,
whether an Incentive Stock Option, Nonqualified Option or Stock Appreciation
Right shall be granted, the number of shares of Stock which may be issued under
each Option, Stock Appreciation Right or Restricted Stock Award, and the value
of each Performance Award and Phantom Stock Award. In making such
determinations the Committee may take into account the nature of the services
rendered by the respective employees, their present and potential contributions
to the Employer's success and such other factors as the Committee in its
discretion shall deem relevant.
(c) Additional Powers. The Committee shall have such additional
powers as are delegated to it by the other provisions of the Plan. Subject to
the express provisions of the Plan, the Committee is authorized to construe the
Plan and the respective agreements executed thereunder, to prescribe such rules
and regulations relating to the Plan as it may deem advisable to carry out the
Plan, and to determine the terms, restrictions and provisions of each Award
including such terms, restrictions and provisions as
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shall be requisite in the judgment of the Committee to cause designated Options
to qualify as Incentive Stock Options, and to make all other determinations
necessary or advisable for administering the Plan. The Committee may correct
any defect or supply any omission or reconcile any inconsistency in any
agreement relating to an Award in the manner and to the extent it shall deem
expedient to carry it into effect. The determinations of the Committee on the
matters referred to in this Article IV shall be conclusive.
(d) Expenses. All expenses and liabilities incurred by the
Committee in the administration of this Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons to
assist the Committee in the carrying out of its duties hereunder.
V. STOCK SUBJECT TO THE PLAN
(a) Stock Grant and Award Limits. The Committee may from time to
time grant Awards to one or more employees determined by it to be eligible for
participation in the Plan in accordance with the provisions of Paragraph VI.
Subject to Paragraph XII, the aggregate number of shares of Stock that may be
issued under the Plan shall not exceed 2,000,000 shares. The shares subject to
this Plan shall consist of authorized but unissued shares of Stock or
previously issued shares of Stock reacquired and held by the Company, and such
number of shares shall be and is hereby reserved for such purpose. Shares of
Stock shall be deemed to have been issued under the Plan only to the extent
actually issued and delivered pursuant to an Award. To the extent that an Award
lapses or the rights of its Holder terminate or the Award is to only be paid in
cash or is paid in cash, any shares of Stock subject to such Award shall again
be available for the grant of an Award. To the extent that an Award lapses or
the rights of its Holder terminate, any shares of Stock subject to such Award
shall again be available for the grant of an Award. Separate stock certificates
shall be issued by the Company for those shares acquired pursuant to the
exercise of an Incentive Stock Option and for those shares acquired pursuant to
the exercise of a Nonqualified Stock Option.
(b) Stock Offered. The stock to be offered pursuant to the grant
of an Award may be authorized but unissued Stock or Stock previously issued and
outstanding and reacquired by the Company.
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant,
are employees. Awards may not be granted to any Director who is not an
employee. An Award may be granted on more than one occasion to the same person,
and, subject to the limitations set forth in the Plan, such Award may include
an Incentive Stock Option or a Nonqualified Stock Option, a Stock Appreciation
Right, a Restricted Stock Award, a Performance Award, a Phantom Stock Award or
any combination thereof.
VII. STOCK OPTIONS
(a) Option Period. The term of each Option shall be as specified
by the Committee at the date of grant.
(b) Limitations on Exercise of Option. An Option shall be
exercisable in whole or in such installments and at such times as determined by
the Committee.
(c) Special Limitations on Incentive Stock Options. To the extent
that the aggregate Fair Market Value (determined at the time the respective
Incentive Stock Option is granted) of Stock with
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respect to which Incentive Stock Options are exercisable for the first time by
an employee during any calendar year under all incentive stock option plans of
the Company and its Affiliates exceeds $100,000, such Incentive Stock Options
shall be treated as Nonqualified Stock Options as determined by the Committee.
The Committee shall determine, in accordance with applicable provisions of the
Code, Treasury Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Optionee of such determination
as soon as practicable after such determination. No Incentive Stock Option
shall be granted to an employee if, at the time the Option is granted, such
employee owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of its parent or subsidiary
corporation, within the meaning of section 422(b)(6) of the Code, unless (i) at
the time such Option is granted the option price is at least 110% of the Fair
Market Value of the Stock subject to the Option and (ii) such Option by its
terms is not exercisable after the expiration of five years from the date of
grant.
(d) Option Agreement. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. An Option Agreement may provide for the payment
of the option price, in whole or in part, in cash or by the delivery of a
number of shares of Stock (plus cash if necessary) having a Fair Market Value
equal to such option price. Each Option shall specify the effect of termination
of employment on the exercisability of the Option; provided, that upon the
death of an Optionee, the Retirement of an Optionee, or upon the Optionee
becoming Disabled, all outstanding Options of such Optionee shall immediately
vest and become exercisable. Moreover, an Option Agreement may provide for a
"cashless exercise" of the Option by establishing procedures whereby the
Holder, by a properly-executed written notice, directs (i) an immediate market
sale or margin loan respecting all or a part of the shares of Stock to which he
is entitled upon exercise pursuant to an extension of credit by the Company to
the Holder of the option price, (ii) the delivery of the shares of Stock from
the Company directly to a brokerage firm and (iii) the delivery of the option
price from the sale or margin loan proceeds from the brokerage firm directly to
the Company. Such Option Agreement may also include, without limitation,
provisions relating to (i) vesting of Options, subject to the provisions hereof
accelerating such vesting upon the occurrence of an IPO or a Change of Control,
(ii) tax matters (including provisions (y) permitting the delivery of
additional shares of Stock or the withholding of shares of Stock from those
acquired upon exercise to satisfy federal or state income tax withholding
requirements and (z) dealing with any other applicable employee wage
withholding requirements), and (iii) any other matters not inconsistent with
the terms and provisions of this Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Option
Agreements need not be identical.
(e) Option Price and Payment. The price at which a share of Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but (i) such purchase price shall not be less than the Fair Market
Value of Stock subject to an Incentive Stock Option on the date the Incentive
Stock Option is granted and (ii) such purchase price shall be subject to
adjustment as provided in Paragraph XII. The Option or portion thereof may be
exercised by delivery of an irrevocable notice of exercise to the Company. The
purchase price of the Option or portion thereof shall be paid in full in the
manner prescribed by the Committee.
(f) Stockholder Rights and Privileges. The Holder shall be
entitled to all the privileges and rights of a stockholder only with respect to
such shares of Stock as have been purchased under the Option and for which
certificates of stock have been registered in the Holder's name.
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(g) Options and Rights in Substitution for Stock Options Granted
by Other Corporations. Options and Stock Appreciation Rights may be granted
under the Plan from time to time in substitution for stock options held by
individuals employed by corporations who become employees as a result of a
merger or consolidation of the employing corporation with the Company, an
Affiliate, or any Subsidiary, or the acquisition by the Company, an Affiliate
or a Subsidiary of the assets of the employing corporation, or the acquisition
by the Company, an Affiliate or a Subsidiary of stock of the employing
corporation with the result that such employing corporation becomes a
Subsidiary.
VIII. STOCK APPRECIATION RIGHTS
(a) Stock Appreciation Rights. A Stock Appreciation Right is the
right to receive an amount equal to the Spread with respect to a share of Stock
upon the exercise of such Stock Appreciation Right. Stock Appreciation Rights
may be granted in connection with the grant of an Option, in which case the
Option Agreement will provide that exercise of Stock Appreciation Rights will
result in the surrender of the right to purchase the shares under the Option as
to which the Stock Appreciation Rights were exercised. The Spread with respect
to a Stock Appreciation Right may be payable either in cash, shares of Stock
with a Fair Market Value equal to the Spread or in a combination of cash and
shares of Stock. With respect to Stock Appreciation Rights that are subject to
Section 16 of the 1934 Act, however, the Committee shall, except as provided in
Paragraph XII(c), retain sole discretion (i) to determine the form in which
payment of the Stock Appreciation Right will be made (i.e., cash, securities or
any combination thereof) or (ii) to approve an election by a Holder to receive
cash in full or partial settlement of Stock Appreciation Rights.
(b) Stock Appreciation Rights Agreement. Stock Appreciation
Rights granted independently of Options shall be evidenced by a Stock
Appreciation Rights Agreement. Each Stock Appreciation Rights Agreement shall
specify the effect of termination of employment on the exercisability of the
Stock Appreciation Rights; provided, that upon the death of a Holder of a Stock
Appreciation Right, the Retirement of such Holder, or upon such Holder becoming
Disabled, all outstanding Stock Appreciation Rights of such Holder shall
immediately vest and become exercisable. Stock Appreciation Rights Agreements
may also include, without limitation, provisions relating to (i) vesting of
Awards, subject to the provisions hereof accelerating vesting upon the
occurrence of an IPO or a Change of Control, (ii) tax matters (including
provisions covering applicable wage withholding requirements), and (iii) any
other matters not inconsistent with the terms and provisions of this Plan, that
the Committee shall in its sole discretion determine. The terms and conditions
of the respective Stock Appreciation Rights Agreements need not be identical.
(c) Exercise Price. The exercise price of each Stock Appreciation
Right shall be determined by the Committee in its sole discretion and shall be
subject to adjustment as provided in Paragraph XII.
(d) Exercise Period. The term of each Stock Appreciation Right
shall be as specified by the Committee at the date of grant.
(e) Limitations on Exercise of Stock Appreciation Right. A Stock
Appreciation Right shall be exercisable in whole or in such installments and at
such times as determined by the Committee.
IX. RESTRICTED STOCK AWARDS
(a) Restricted Stock Awards. A Restricted Stock Award shall be
represented by a certificate of Stock registered in the name of the Holder of
such Restricted Stock Award. The Holder
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shall have the right to receive dividends with respect to Stock subject to a
Restricted Stock Award, to vote Stock subject thereto and to enjoy all other
stockholder rights, except that (i) the Holder shall not be entitled to
delivery of the Stock certificate until the Forfeiture Restrictions shall have
expired, (ii) the Company shall retain custody of the Stock until the
Forfeiture Restrictions shall have expired, (iii) the Holder may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the Stock until
the Forfeiture Restrictions shall have expired, and (iv) a breach of the terms
and conditions established by the Committee pursuant to the Restricted Stock
Agreement shall cause a forfeiture of the Restricted Stock Award.
(b) Forfeiture Restrictions to be Established by the Committee.
The Forfeiture Restrictions on shares of Stock that are the subject of a
Restricted Stock Award shall be determined by the Committee in its sole
discretion, and the Committee may provide that the Forfeiture Restrictions
shall lapse upon (i) the attainment of targets established by the Committee
that are based on (1) the price of a share of Stock, (2) the Company's earnings
per share, (3) the Company's revenue, (4) the revenue of a business unit of the
Company designated by the Committee, (5) the return on stockholders' equity
achieved by the Company, or (6) the Company's pre-tax cash flow from
operations, (ii) the Holder's continued employment with the Employer for a
specified period of time, or (iii) a combination of any two or more of the
factors listed in clauses (i) and (ii) of this sentence. Each Restricted Stock
Award may have different Forfeiture Restrictions, in the discretion of the
Committee. The Forfeiture Restrictions applicable to a particular Restricted
Stock Award shall not be changed except as permitted by Paragraph IX(b) or
Paragraph XII.
(c) Other Terms and Conditions. At the time of a Restricted Stock
Award, the Committee may, in its sole discretion, prescribe additional terms,
conditions or restrictions relating to Restricted Stock Awards, including, but
not limited to, rules pertaining to the termination of employment of a Holder
prior to expiration of the Forfeiture Restrictions; provided, that upon the
death of a Holder of a Restricted Stock Award, the Retirement of such Holder,
or upon such Holder becoming Disabled, all Forfeiture Restrictions applicable
to all Restricted Stock Awards of such Holder shall lapse and expire. Such
additional terms, conditions or restrictions shall be set forth in a Restricted
Stock Agreement made in conjunction with the Award. Such Restricted Stock
Agreement may also include, without limitation, provisions relating to (i)
subject to the provisions hereof accelerating vesting upon the occurrence of an
IPO or a Change of Control, vesting of Awards, (ii) tax matters (including
provisions (y) covering any applicable employee wage withholding requirements
and (z) prohibiting an election by the Holder under section 83(b) of the Code),
and (iii) any other matters not inconsistent with the terms and provisions of
this Plan that the Committee shall in its sole discretion determine. The terms
and conditions of the respective Restricted Stock Agreements need not be
identical.
(d) Payment for Restricted Stock. The Committee shall determine
the amount and form of any payment for Stock received pursuant to a Restricted
Stock Award, provided that in the absence of such a determination, a Holder
shall not be required to make any payment for Stock received pursuant to a
Restricted Stock Award, except to the extent otherwise required by law.
(e) Agreements. At the time any Award is made under this
Paragraph IX, the Company and the Holder shall enter into a Restricted Stock
Agreement setting forth each of the matters as the Committee may determine to
be appropriate. The terms and provisions of the respective Restricted Stock
Agreements need not be identical.
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X. PERFORMANCE AWARDS
(a) Performance Period. The Committee shall establish, with
respect to and at the time of each Performance Award, a performance period over
which the performance of the Holder shall be measured.
(b) Performance Awards. Each Performance Award shall have a
maximum value established by the Committee at the time of such Award.
(c) Performance Measures. A Performance Award shall be awarded to
an employee contingent upon future performance of the employee, the Company, an
Affiliate, any Subsidiary, or any division or department thereof by or in which
he is employed during the performance period. The Committee shall establish the
performance measures applicable to such performance prior to the beginning of
the performance period but subject to such later revisions as the Committee
shall deem appropriate to reflect significant, unforeseen events or changes.
(d) Awards Criteria. In determining the value of Performance
Awards, the Committee shall take into account an employee's responsibility
level, performance, potential, other Awards and such other considerations as it
deems appropriate.
(e) Payment. Following the end of the performance period, the
Holder of a Performance Award shall be entitled to receive payment of an
amount, not exceeding the maximum value of the Performance Award, based on the
achievement of the performance measures for such performance period, as
determined by the Committee. Payment of a Performance Award may be made in
cash, Stock or a combination thereof, as determined by the Committee. Payment
shall be made in a lump sum or in installments as prescribed by the Committee.
Any payment to be made in Stock shall be based on the Fair Market Value of the
Stock on the payment date. If a payment of cash is to be made on a deferred
basis, the Committee shall establish whether interest shall be credited, the
rate thereof and any other terms and conditions applicable thereto.
(f) Termination of Employment. A Performance Award shall
terminate if the Holder does not remain continuously in the employ of the
Employer at all times during the applicable performance period, except as maybe
determined by the Committee or as may otherwise be provided in the Award at the
time granted.
(g) Agreements. At the time any Award is made under this
Paragraph X, the Company and the Holder shall enter into a Performance Stock
Award Agreement setting forth each of the matters contemplated hereby, and, in
addition such matters are set forth in Paragraph IX(b) as the Committee may
determine to be appropriate. The terms and provisions of the respective
agreements need not be identical.
XI. PHANTOM STOCK AWARDS
(a) Phantom Stock Awards. Phantom Stock Awards are rights to
receive shares of Stock (or cash in an amount equal to the Fair Market Value
thereof), or rights to receive an amount equal to any appreciation in the Fair
Market Value of Stock (or portion thereof) over a specified period of time,
which vest over a period of time (subject to the provisions hereof accelerating
vesting upon the occurrence of an IPO or a Change of Control) as established by
the Committee, without payment of any amounts by the Holder thereof (except to
the extent otherwise required by law) or satisfaction of any performance
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criteria or objectives. Each Phantom Stock Award shall have a maximum value
established by the Committee at the time of such Award.
(b) Award Period. The Committee shall establish, with respect to
and at the time of each Phantom Stock Award, a period over which or the event
upon which the Award shall vest with respect to the Holder.
(c) Awards Criteria. In determining the value of Phantom Stock
Awards, the Committee shall take into account an employee's responsibility
level, performance, potential, other Awards and such other considerations as it
deems appropriate.
(d) Payment. Following the end of the vesting period for a
Phantom Stock Award, the Holder of a Phantom Stock Award shall be entitled to
receive payment of an amount, not exceeding the maximum value of the Phantom
Stock Award, based on the then vested value of the Award. Payment of a Phantom
Stock Award may be made in cash, Stock or a combination thereof as determined
by the Committee. Payment shall be made in a lump sum or in installments as
prescribed by the Committee in its sole discretion. Any payment to be made in
Stock shall be based on the Fair Market Value of the Stock on the payment date.
Cash dividend equivalents may be paid during or after the vesting period with
respect to a Phantom Stock Award, as determined by the Committee. If a payment
of cash is to be made on a deferred basis, the Committee shall establish
whether interest shall be credited, the rate thereof and any other terms and
conditions applicable thereto.
(e) Termination of Employment. Except as may be otherwise
determined by the Committee or as set forth in the Award at the time of grant,
a Phantom Stock Award shall terminate if the Holder does not remain
continuously in the employ of the Employer at all times during the applicable
vesting period; provided, however, that upon the death of a Holder of a Phantom
Stock Award, the Retirement of such Holder, or upon such Holder becoming
Disabled, all outstanding Phantom Stock Awards of such Holder shall immediately
vest and become distributable.
(f) Agreements. At the time any Award is made under this
Paragraph XI, the Company and the Holder shall enter into a Phantom Stock Award
Agreement setting forth each of the matters contemplated hereby and, in
addition, such matters as are set forth in Paragraph IX(b) as the Committee may
determine to be appropriate. The terms and provisions of the respective
agreements need not be identical.
XII. RECAPITALIZATION OR REORGANIZATION
(a) The shares with respect to which Awards may be granted are
shares of Stock as presently constituted, but if, and whenever, prior to the
expiration of an Award theretofore granted, the Company shall effect a
subdivision or consolidation of such shares of Stock or other capital
readjustment, the number of shares of Stock with respect to which such Award
may thereafter be exercised or satisfied, as applicable, (i) in the event of an
increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
(b) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of an
Award theretofore granted the Holder shall be entitled to (or entitled to
purchase, if applicable) under such Award, in lieu of the number of shares of
Stock then covered by such Award, the number and class of shares of stock and
securities to which the Holder
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would have been entitled pursuant to the terms of the recapitalization if,
immediately prior to such recapitalization, the Holder had been the holder of
record of the number of shares of Stock then covered by such Award.
(c) In the event of an IPO or a Change of Control, all
outstanding Awards shall immediately vest and become exercisable or
satisfiable, as applicable. The Committee, in its discretion, may determine
that upon the occurrence of a Change of Control, each Award other than an
Option outstanding hereunder shall terminate within a specified reasonable
number of days after notice to the Holder, and such Holder shall receive, with
respect to each share of Stock subject to such Award, cash in an amount equal
to the excess, if any, of the Change of Control Value over any exercise price
or purchase price paid, if applicable. Further, in the event of a Change of
Control, the Committee, in its discretion shall act to effect one or more of
the following alternatives with respect to outstanding Options, which may vary
among individual Holders and which may vary among Options held by any
individual Holder: (i) determine a reasonable period of time on or before a
specified date (before or after such Change of Control) after which specified
date all unexercised Options and all rights of Holders thereunder shall
terminate, (2) require the mandatory surrender to the Company by selected
Holders of some or all of the outstanding Options held by such Holders
(irrespective of whether such Options are then exercisable under the provisions
of the Plan) as of a date, before or after such Change of Control, specified by
the Committee, in which event the Committee shall thereupon cancel such Options
and the Company shall pay to each Holder an amount of cash per share equal to
the excess, if any, of the Change of Control Value of the shares subject to
such Option over the exercise price(s) under such Options for such shares, or
(3) provide that thereafter upon any exercise of an Option theretofore, granted
the Holder shall been titled to purchase under such Option, in lieu of the
number of shares of Stock then covered by such Option, the number and class of
shares of stock or other securities or property (including, without limitation,
cash) to which the Holder would have been entitled pursuant to the terms of the
agreement of merger, consolidation or sale of assets and dissolution if,
immediately prior to such merger, consolidation or sale of assets and
dissolution the Holder has been the holder of record of the number of shares of
Stock then covered by such Option. The provisions contained in this paragraph
shall not terminate any rights of the Holder to further payments pursuant to
any other agreement with the Company following a Change of Control.
(d) In the event of changes in the outstanding Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Award and not otherwise provided for by this Paragraph XII,
any outstanding Awards and any agreements evidencing such Awards shall be
subject to adjustment by the Committee at its reasonable discretion as to the
number and price of shares of Stock or other consideration subject to such
Awards. In the event of any such change in the outstanding Stock, the aggregate
number of shares available under the Plan may be appropriately adjusted by the
Committee, whose determination shall be reasonable and conclusive.
(e) The existence of the Plan and the Awards granted hereunder
shall not affect in any way the right or power of the Board or the stockholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of debt or
equity securities ahead of or affecting Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(f) Any adjustment provided for in Subparagraphs (a), (b), (c)
or(d) above shall be subject to any required stockholder action.
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<PAGE> 12
(g) Except as herein before expressly provided, the issuance by
the Company of shares of stock of any class or securities convertible into
shares of stock of any class, for cash, property, labor or services, upon
direct sale, upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares of obligations of the Company convertible into such
shares or other securities, and in any case whether or not for fair value,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to Awards theretofore granted
or the purchase price per share, if applicable.
XIII. AMENDMENT AND TERMINATION OF THE PLAN
The Board, in its discretion, may at any time or times amend,
suspend or terminate the Plan; provided, however, such action shall be subject
to the approval of the stockholders of the Company where stockholder approval
(i) is required by applicable law or (ii) the Board determines (A) such
approval is necessary to comply with any requirements of any securities
exchange on which the stock is listed or (B) such approval is desired for any
other reason; provided, further, however, that no amendment, suspension or
termination of the Plan may, without the consent of the holder of an Award,
terminate such Award or adversely affect such person's rights in any material
respect.
XIV. MISCELLANEOUS
(a) No Right to An Award. Neither the adoption of the Plan by the
Company nor any action of the Board or the Committee shall be deemed to give an
employee any right to be granted an Award to purchase Stock, a right to a Stock
Appreciation Right, a Restricted Stock Award, a Performance Award or a Phantom
Stock Award or any of the rights hereunder except as may be evidenced by an
Award or by an Option Agreement, Stock Appreciation Rights Agreement,
Restricted Stock Agreement, Performance Award Agreement or Phantom Stock Award
Agreement on behalf of the Company, and then only to the extent and on the
terms and conditions expressly set forth therein. The Plan shall be unfunded.
The Company shall not be required to establish any special or separate fund or
to make any other segregation of funds or assets to assure the payment of any
Award.
(b) Employees' Rights Unsecured. The right of an employee to
receive Stock, cash or any other payment under this Plan shall be an unsecured
claim against the general assets of the Company. The Company may, but shall not
be obligated to, acquire shares of Stock from time to time in anticipation of
its obligations under this Plan, but a Participant shall have no right in or
against any shares of Stock so acquired. All Stock shall constitute the general
assets of the Company and may be disposed of by the Company at such time and
for such purposes as it deems appropriate.
(c) Agreement Controls. No discretionary action by the Committee
as set forth herein shall amend or supersede the express terms of any
Agreement.
(d) No Employment Rights Conferred. Nothing contained in the Plan
shall (i) confer upon any employee any right with respect to continuation of
employment with any Employer or (ii) interfere in any way with the right of any
Employer to terminate an employee's employment at any time.
(e) Other Laws; Withholding. The Company shall not be obligated
to issue any Stock pursuant to any Award granted under the Plan at any time
when the shares covered by such Award have not been registered under the
Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules or regulations available for the
issuance and sale of such shares. Unless the Awards and Stock covered by this
Plan
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have been registered under the Securities Act of 1933, or the Company has
determined that such registration is unnecessary, each Holder exercising an
Award under this Plan may be required by the Company to give representation in
writing that such Holder is acquiring such shares for his or her own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof. No fractional shares of Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The Company
shall have the right to deduct in connection with all Awards any taxes required
by law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.
(f) No Restriction on Corporate Action. Nothing contained in the
Plan shall be construed to prevent the Company, an Affiliate or any Subsidiary
from taking any corporate action which is deemed by the Company, an Affiliate
or any Subsidiary to be appropriate or in its best interest, whether or not
such action would have an adverse effect on the Plan or any Award made under
the Plan. No employee, beneficiary or other person shall have any claim against
the Company, an Affiliate or any Subsidiary as a result of any such action.
(g) Restrictions on Transfer. Except as provided below, an Award
shall not be transferable otherwise than by will or the laws of descent and
distribution and shall be exercisable during the Holder's lifetime only by such
Holder or the Holder's guardian or legal representative. However, the Committee
may, in its discretion, provide in an option agreement (other than with respect
to an Incentive Stock Option) that the option right granted to the individual
may be transferred (in whole or in part and shall be subject to such terms and
conditions as the Committee may impose thereon, including, without limitation,
the approval by the Company of the form of transfer agreement) by the
individual to (i) the spouse, children or grandchildren of the individual
("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of the Immediate Family Members and, if applicable, the individual, (iii) a
partnership in which such Immediate Family Members and, if applicable, the
individual are the only partners, or (iv) any other person or entity otherwise
permitted by the Committee. Following transfer, any such transferred option
rights shall continue to be subject to the same terms and conditions as were
applicable to the option rights immediately prior to transfer; provided,
however, that no transferred option rights shall be exercisable unless
arrangements satisfactory to the Company have been made to satisfy any tax
withholding obligations the Company may have with respect to the option rights.
(h) Beneficiary Designation. Each Holder may name, from time to
time, any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of his
or her death before he or she receives any or all of such benefit. Each
designation will revoke all prior designations by the same Holder, shall be in
a form prescribed by the Committee, and will be effective only when filed by
the Holder in writing with the Committee during his lifetime. In the absence of
any such designation, benefits remaining unpaid at the Holder's death shall be
paid to his estate.
(i) Rule 16b-3. It is intended that the Plan and any grant of an
Award made to a person subject to Section 16 of the 1934 Act meet all of the
requirements of Rule 16b-3. If any provision of the Plan or any such Award
would disqualify the Plan or such Award under, or would otherwise not comply
with, Rule 16b-3, such provision or Award shall be construed or deemed amended
to conform to Rule 16b-3.
(j) Section 162(m). If the Plan is subject to Section 162(m) of
the Code, it is intended that the Plan comply fully with and meet all the
requirements of Section 162(m) of the Code so that Options and Stock
Appreciation Rights granted hereunder and, if determined by the Committee,
Restricted Stock Awards, shall constitute "performance-based" compensation
within the meaning of such section. If any
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<PAGE> 14
provision of the Plan would disqualify the Plan or would not otherwise permit
the Plan to comply with Section 162(m) as so intended, such provision shall be
construed or deemed amended to conform to the requirements or provisions of
Section 162(m);provided that no such construction or amendment shall have an
adverse effect on the economic value to a Holder of any Award previously
granted hereunder.
(k) Indemnification. Each person who is or shall have been a
member of the Committee or of the Board and any employee delegated authority
hereunder shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of any judgment in any
such action, suit, or proceeding against him, provided he shall give the
Company prompt written notice of any such action, suit or proceeding, and an
opportunity, at its own expense, to handle, defend and/or settle the same
before he undertakes to handle, defend and/or settle it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights
or indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
(l) Governing Law. This Plan shall be construed in accordance
with the laws of the State of Delaware and applicable federal law.
IN WITNESS WHEREOF, Sterling Chemicals Holdings, Inc. has caused
this document to be duly executed in its name and behalf by its proper officer
thereunto duly authorized, effective for all purposes as of the date of the
adoption of the Plan by the Board, being April 23, 1997.
STERLING CHEMICALS HOLDINGS, INC.
By: /s/ FRANK P. DIASSI
----------------------
Frank P. Diassi
Chairman of the Board of Directors
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