8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 23, 2006

LYONDELL CHEMICAL COMPANY

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-10145	95-4160558
(Commission File Number)	(I.R.S. Employer Identification No.)
1221 McKinney Street, Suite 700, Houston, Texas	77010
(Address of principal executive offices)	(Zip Code)

(713) 652-7200

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

The descriptions set forth below are qualified in their entirety by the full text of the documents to which they refer, which documents are filed herewith.

Item 1.01 Entry into a Material Definitive Agreement

Executive Officer Plans and Agreements

Change in Control Revisions in Plans and Agreements for Executive Officers

On February 23, 2006, the Lyondell Chemical Company (“Lyondell”) Executive Severance Pay Plan (the “Severance Plan”) and the Form of Award Agreement for Lyondell’s Amended and Restated 1999 Incentive Plan (the “Incentive Plan Award Agreement”) were amended and restated, and Lyondell’s Supplemental Executive Benefit Plans Trust Agreement (the “Executive Trust Agreement”) was amended, to revise the definition of Change in Control. Under the prior definition of Change in Control, a Change in Control generally would have occurred if, among other things, (i) the current shareholders did not own at least 80% of the outstanding shares of Lyondell common stock after consummation of a transaction or (ii) an individual or organization accumulated over 20% of the outstanding shares of Lyondell common stock. Under the revised definition, a change in control generally occurs if, among other things, (i) the current shareholders do not own at least 50% of the outstanding shares of Lyondell common stock after consummation of a transaction or (ii) an individual or organization accumulates over 20% of the outstanding shares of Lyondell common stock. For the Incentive Plan Award Agreement, the revised definition of Change in Control applies to awards granted on or after February 23, 2006. The Severance Plan, Executive Trust Agreement and Incentive Plan Award Agreement are being filed with this Current Report on Form 8-K as Exhibits 10.1, 10.9 and 10.18(a), respectively.

Executive Deferral Plan

On February 23, 2006, in connection with the adoption of a revised Change in Control definition, Lyondell’s Executive Deferral Plan (the “New Executive Deferral Plan”) was amended and restated by merging the pre-2005 Executive Deferral Plan (the “Former Executive Deferral Plan) into the New Executive Deferral Plan. The New Executive Deferral Plan had been adopted in 2005 in response to the American Jobs Creation Act of 2004. Pursuant to the February 23 amendment of the New Executive Deferral Plan, all deferred compensation will be subject to the New Executive Deferral Plan’s definition of Change in Control, which conforms to the American Jobs Creation Act of 2004. Under the Former Executive Deferral Plan’s definition of Change in Control, a change in control generally would have occurred if, among other things, (1) the current shareholders did not own at least 80% of the outstanding shares of Lyondell common stock after consummation of a transaction or (2) an individual or organization accumulated over 20% of the outstanding shares of Lyondell common stock. Under the New Executive Deferral Plan’s definition of Change in Control, a change in control generally occurs if, among other things, (1) the current shareholders do not own at least 50% of the outstanding shares of Lyondell common stock after consummation of a transaction or (2) an individual or organization accumulates over 50% of the outstanding shares of Lyondell common stock. The New Executive Deferral Plan is being filed with this Current Report on Form 8-K as Exhibit 10.6.

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Annual Cash Bonus Guidelines

On February 23, 2006, the annual cash bonus guidelines were approved for executive officers of the Company, effective January 1, 2006. The bonus guidelines have been revised in response to the American Jobs Creation Act of 2004, and to reflect Lyondell’s acquisition of Millennium Chemicals Inc. (“Millennium”) and the remaining 29.5% interest in Equistar Chemicals, LP (“Equistar”) held by Millennium such that both Millennium and Equistar are indirect wholly owned subsidiaries of Lyondell, and to remove the definition of Change in Control. In addition, the performance period for the annual cash bonus will be based on a three-year average measure for awards beginning in 2006. The annual cash bonus guidelines are being filed with this Current Report on Form 8-K as Exhibit 10.20

Non-Employee Director Plans and Agreements

Non-Employee Director Deferral Plan

On February 23, 2006, in connection with the adoption of a revised Change in Control definition, the Lyondell Elective Deferral Plan for Non-Employee Directors (the “New Directors’ Deferral Plan”) was amended and restated by merging the pre-2005 Directors’ Deferral Plan (the “Former Directors’ Deferral Plan”) into the New Directors’ Deferral Plan. The New Directors’ Deferral Plan had been adopted in 2005 in response to the American Jobs Creation Act of 2004. Pursuant to the February 23 amendment of the New Directors’ Deferral Plan, all deferred compensation will be subject to the New Directors’ Deferral Plan’s definition of Change in Control, which conforms to the American Jobs Creation Act of 2004. Under the Former Directors’ Deferral Plan’s definition of Change in Control, a change in control generally would have occurred if, among other things, (1) the current shareholders did not own at least 80% of the outstanding shares of Lyondell common stock after consummation of a transaction or (2) an individual or organization accumulated over 20% of the outstanding shares of Lyondell common stock. Under the New Directors’ Deferral Plan’s definition of Change in Control, a change in control generally occurs if, among other things, (1) the current shareholders do not own at least 50% of the outstanding shares of Lyondell common stock after consummation of a transaction or (2) an individual or organization accumulates over 50% of the outstanding shares of Lyondell common stock. The New Directors’ Deferral Plan is being filed with this Current Report on Form 8-K as Exhibit 10.12.

Non-Employee Directors Benefit Plans Trust Agreement

On February 23, 2006, the Lyondell Non-Employee Directors Benefit Plans Trust Agreement (the “Directors’ Trust Agreement”) was amended to revise the definition of Change in Control. The previous definition of Change in Control was the same as the previous definition discussed above under “Change in Control Revisions in Plans and Agreements for Executive Officers” – Executive Officer Plans and Agreements,” and the revised definition of Change in Control is the same as the revised definition discussed above in that same section. The Directors’ Trust Agreement is being filed with this Current Report on Form 8-K as Exhibit 10.16.

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Restricted Stock Plan for Non-Employee Directors

On February 23, 2006, the Lyondell Restricted Stock Plan for Non-Employee Directors (the “Directors’ Restricted Stock Plan”) was amended and restated to permit the award of restricted share units, to provide for early vesting for restricted stock on the later of the last day of the month in which the non-employee director attains age 72 or May 4, 2006, and to revise the definition of Change in Control. The previous definition of Change in Control was the same as the previous definition discussed above under “Change in Control Revisions in Plans and Agreements for Executive Officers” – Executive Officer Plans and Agreements,” and the revised definition of Change in Control is the same as the revised definition discussed above in that same section. The Directors’ Restricted Stock Plan is being filed with this Current Report on Form 8-K as Exhibit 10.15.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

10.1	Lyondell Chemical Company Executive Severance Pay Plan
10.6	Lyondell Chemical Company Executive Deferral Plan
10.9	Lyondell Chemical Company Supplemental Executive Benefit Plans Trust Agreement
10.12	Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors
10.15	Lyondell Chemical Company Restricted Stock Plan for Non-Employee Directors
10.16	Lyondell Chemical Company Non-Employee Directors Benefit Plans Trust Agreement
10.18(a)	Form of Award Agreement for Lyondell Chemical Company Amended and Restated 1999 Incentive Plan
10.20	Lyondell Chemical Company Amended and Restated 1999 Incentive Plan Administrative Guidelines for Annual Cash Bonus Guidelines

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LYONDELL CHEMICAL COMPANY
By:	/s/ Kerry A. Galvin
Name:	Kerry A. Galvin
Title:	Senior Vice President, General Counsel & Secretary

Date: February 24, 2006

INDEX TO EXHIBITS

Exhibit Number	Description
10.1	Lyondell Chemical Company Executive Severance Pay Plan
10.6	Lyondell Chemical Company Executive Deferral Plan
10.9	Lyondell Chemical Company Supplemental Executive Benefit Plans Trust Agreement
10.12	Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors
10.15	Lyondell Chemical Company Restricted Stock Plan for Non-Employee Directors
10.16	Lyondell Chemical Company Non-Employee Directors Benefit Plans Trust Agreement
10.18(a)	Form of Award Agreement for Lyondell Chemical Company Amended and Restated 1999 Incentive Plan
10.20	Lyondell Chemical Company Amended and Restated 1999 Incentive Plan Administrative Guidelines for Annual Cash Bonus Guidelines

EX-10.1

Exhibit 10.1

INSTRUMENT AMENDING

LYONDELL CHEMICAL COMPANY

EXECUTIVE SEVERANCE PAY PLAN

LYONDELL CHEMICAL COMPANY hereby amends and restates the Lyondell Chemical Company Executive Severance Pay Plan, to read in its entirety as the document entitled “Lyondell Chemical Company Executive Severance Pay Plan”, attached hereto.

IN WITNESS WHEREOF, LYONDELL CHEMICAL COMPANY, acting by and through its duly authorized officer, has caused this Instrument to be executed on this 23rd day of February , 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ Janna Sewell	BY:	/s/ Dan F. Smith
	Assistant Secretary		Dan F. Smith
			President and Chief Executive Officer

LYONDELL CHEMICAL COMPANY

EXECUTIVE SEVERANCE PAY PLAN

As Amended and Restated Effective February 23, 2006

LYONDELL CHEMICAL COMPANY

EXECUTIVE SEVERANCE PAY PLAN

(As Amended and Restated Effective February 23, 2006)

1. Purpose. This Lyondell Chemical Company Executive Severance Pay Plan (the “Plan”) is intended to assure Lyondell Chemical Company (the “Company”) that it will have the continued dedication of specified executives and eliminate the distractions of personal uncertainties associated with potential transactions that the Company may undertake in the future by providing for certain severance benefit payments to those executives on employment termination within a specified period following a Change in Control, as defined below.

2. Definitions. The terms set forth below have the following meanings:

“Act” means Code Section 409A, as enacted by the American Jobs Creation Act of 2004, as it may be amended, and all applicable regulations and guidelines issued or promulgated by the appropriate government agency or regulatory body.

“Applicable Annual Earnings” means the sum of a Participant’s annual base salary in effect on the last day of employment with the Employer (or if greater, annual base salary in effect on the date of the Change in Control) and the Participant’s Target Award (whether or not paid) for personal services on the Employer’s behalf. The “Target Award” shall be the actual bonus compensation target for the calendar year when the Change in Control occurs, or if none has been established, the bonus compensation target for the immediately preceding calendar year. Applicable Annual Earnings shall include the Participant’s current annual base salary and Target Award whether paid or deferred, including without limit, amounts contributed by or on behalf of the Participant under any Employer-sponsored plan, such as (i) a plan described in Code Sections 125 or 401(k), or (ii) the Company’s Executive Deferral Plan. This definition of Applicable Annual Earnings excludes any income attributable to stock options, stock appreciation rights, performance awards other than awards under an executive bonus plan described above, dividend credits, and restricted stock granted under, and dividends on shares acquired pursuant to, any stock option plan, restricted stock plan or performance unit plan.

“Board” means the Board of Directors of the Company.

“Change in Control” shall be deemed to have occurred as of the date that one or more of the following occurs:

(i) Individuals who constitute the entire Board on the date of this amendment (“Incumbent Directors”) then cease to constitute at least a Board majority for any reason; provided, however, that any individual after the date of this amendment also shall be considered an Incumbent Director if the individual’s election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the then Incumbent Directors, but an individual shall not be considered an Incumbent Director if the individual’s initial assumption of office occurs as a result of either an actual or threatened election contest, as those terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as amended, or as a result of other actual or threatened solicitation of proxies or consents by or on behalf of any Person (as defined below) other than the Board;

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(ii) The consummation of any merger, consolidation, amalgamation, reorganization, share exchange or recapitalization of the Company (or, if the Company’s capital stock is affected, any Company subsidiary), or any sale, lease, exchange or other transfer (in one transaction of a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the Company’s assets (each of the foregoing being an “Acquisition Transaction”) where:

(1) the Company’s shareholders immediately before that Acquisition Transaction do not beneficially own, directly or indirectly, immediately after that Acquisition Transaction shares or other ownership interests representing in the aggregate fifty percent (50%) or more of (a) the then outstanding common stock or other equity interests of the corporation or other entity surviving or resulting from the merger, consolidation, amalgamation, reorganization, share exchange or recapitalization or acquiring such assets of the Company, as the case may be, or of its ultimate parent corporation or other entity, if any (the “Surviving Entity”), and (b) the Combined Voting Power of the Surviving Entity’s then outstanding Voting Securities, or

(2) the Incumbent Directors who initially approved the Acquisition Transaction do not constitute a majority of the Board of Directors, or similar managing group, of the Surviving Entity immediately after that Acquisition Transaction, or

(3) any Person directly or indirectly becomes the Beneficial Owner of the Surviving Entity’s securities representing, in the aggregate, more than twenty percent (20%) of either (A) the Surviving Entity’s then outstanding shares of common stock (“Common Shares”) or (B) the Combined Voting Power of all the Surviving Entity’s then outstanding Voting Securities, and that Person’s direct or indirect Beneficial Ownership of the Combined Voting Power of the outstanding Voting Securities of the Surviving Entity immediately after the Acquisition Transaction is more than five percentage points greater than that Person’s Beneficial Ownership in the Combined Voting Power of the outstanding Voting Securities of the Company immediately before the Acquisition Transaction was initially approved;

(iii) The Company’s stockholders approve any plan or proposal to liquidate or dissolve the Company; or

(iv) Any Person becomes, directly or indirectly, the Beneficial Owner, of Company securities representing, in the aggregate, more than twenty percent (20%) of either (A) the then outstanding Common Shares or (B) the Combined Voting Power of all of the Company’s then outstanding Voting Securities; provided, however, that notwithstanding the foregoing, no Change in Control shall be deemed to occur under this Subsection (iv):

(1) Solely as a result of the Company acquiring securities in an transaction that reduces the outstanding number of Common Shares or other Voting Securities and thereby increases (a) the proportion of Common Shares beneficially owned by any Person to more than twenty percent (20%) of the then outstanding Common Shares, or (b) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to more than twenty percent (20%) of the Combined Voting Power of all then outstanding Voting Securities;

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(2) Solely as a result of a Person acquiring securities directly from the Company, excluding any conversion of a security not acquired directly from the Company;

provided, further, that a Change in Control shall be deemed to occur if any Person referred to in paragraph (1) or (2) of this Subsection (iv) thereafter becomes the Beneficial Owner of additional shares or other ownership interests representing one percent (1%) or more of the Company’s outstanding Common Shares or one percent (1%) or more of the Combined Voting Power (other than as a result of (x) a stock split, stock dividend or similar transaction or (y) an event described in paragraph (1) or (2) of this Subsection (iv)).

(v) For purposes of this Change in Control definition, the following capitalized terms have the following meanings:

(1) “Affiliate” means, as to a specified person, another person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person, within the meaning of terms used in Rule 405 under the Securities Act of 1933, as amended, or any successor rule.

(2) “Beneficial Owner” has the meaning set forth in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended.

(3) “Combined Voting Power” means the aggregate votes entitled to be cast generally by holders of then outstanding Voting Securities of a corporation or other entity to elect the Board of Directors, or similar managing group, of that corporation or entity.

(4) “Person” means any individual, entity (including, without limit, any corporation, partnership, trust, joint venture, association or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations thereunder); provided, however, that Person excludes the Company, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established for or under the terms of any employee benefit plan by the Company, LCR, or their subsidiaries.

(5) “Voting Securities” means all securities of a corporation or other entity with the right, under ordinary circumstances, to vote to elect the Board of Directors or similar managing group of that corporation or other entity.

“Cause” means: (i) the Participant’s continued and willful refusal to substantially perform his duties (other than a willful refusal to perform a duty which constitutes Constructive Termination for Good Reason or refusal resulting from the Participant’s incapacity due to physical or mental illness), after the Governing Body delivers a demand for substantial performance that specifically identifies the Governing Body’s determination of the manner in which the Participant has not substantially performed his duties, where the Participant’s performance is not cured to the Governing Body’s reasonable satisfaction within thirty (30) days from that demand; (ii) the Participant’s engagement in willful misconduct or dishonesty that is materially injurious, monetarily or otherwise to the Employer; or (iii) a Participant’s final

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conviction of a felony. Notwithstanding the foregoing, a Participant shall not be deemed terminated for Cause by an Employer without (i) the Employer’s reasonable written notice to a Participant setting forth the reasons the Employer intends to terminate the Participant for Cause and (ii) the Participant’s opportunity, together with his counsel, to be heard before the Governing Body. It is specifically agreed that Cause shall exclude any act or omission by a Participant in the good faith exercise of the Participant’s business judgment as an officer of the Employer.

“Chief Executive Officer” means the Chief Executive Officer of the Company.

“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Compensation and Human Resources Committee of the Board or any person or persons appointed by the Board to administer the Plan.

“Common Stock” means the Company’s common stock, par value $1.00 per share.

“Company” means Lyondell Chemical Company.

“Constructive Termination for Good Reason” means:

(i) the Participant is assigned to any duties or responsibilities that are not comparable to the Participant’s position, offices, duties, responsibilities or status with the Employer at the time of the Change in Control, or the Participant’s reporting responsibilities or titles are changed and the change results in a reduction of the Participant’s responsibilities or position with the Employer;

(ii) the Participant’s level of benefits (qualified and executive) or compensation (individual base compensation and short and long-term incentive opportunity) is reduced below the comparable level payable to similarly situated executives at the Employer; or

(iii) the Participant is actually transferred, or offered a proposed transfer, as evidenced in the Employer’s written communication to the Participant, to a location other than the location where he was primarily employed immediately preceding the Change in Control, unless that new location is a major operating unit or facility of the Employer that is located within 50 miles of the Participant’s primary location on the date immediately preceding a transfer; provided, however, (1) the Participant shall provide the Committee or the Board with written notice, within thirty (30) days from the date that he is given the Employer’s written notice of an actual or proposed transfer, that the transfer shall constitute a Constructive Termination for Good Reason, (2) the Employer fails to provide the Participant with written notice rescinding the actual or proposed transfer within twenty (20) days of the date the Employer receives the Participant’s notice and (3) if the Employer does not rescind the transfer, the Participant must terminate his employment due to Constructive Termination for Good Reason within forty (40) days after that twenty (20)-day rescission period so, in any event, the Participant shall have terminated his employment with the Employer within ninety (90) days after the Participant first receives the Employer’s written notice of the actual or proposed transfer.

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“Disability” means a permanent and total disability as defined in the Employer-sponsored long-term disability plan applicable to the affected Participant.

“Effective Date” means February 23, 2006.

“Employee” means an individual employed by the Company or a Subsidiary.

“Employer” means the Company or any Subsidiary that employs a Participant.

“Governing Body” means (i) the Board, if the Employer is the Company, or (ii) the applicable governing body of any other Employer.

“Key Employee” means a Participant who at any time during the prior Plan Year was identified as (i) an officer or the Company with annual compensation greater than $130,000, as adjusted, (ii) a five percent (5%) owner of the Company, or (iii) a one percent (1%) owner of the Company with annual compensation from the Company of more that $150,000, as adjusted, as determined according to the requirements of Code Sections 409A and 416(i). For Plan distribution purposes, an Employee identified as a Key Employee during a year ending on the identification date shall be considered a Key Employee for a twelve month period beginning on the following April 1. December 31 of the prior Plan Year shall be used as the identification date to identify Key Employees under the Act.

“Level One” means the Company’s Chief Executive Officer and those elected officers of the Company recommended by the Chief Executive Officer and approved by the Committee.

“Level One Participant” means a Participant who is employed in a Level One capacity by the Company during the relevant eligibility period under Section 3;

“Level Two” means an elected officer of the Company who does not serve in a Level One capacity, an officer of a Subsidiary or an Employee in a senior management position of the Company or any Subsidiary who the Chief Executive Officer designates as eligible to participate.

“Level Two Participant” means a Participant employed in a Level Two position during the relevant eligibility period under Section 3.

“Level Three” means an Employee in a senior management position of the Company or any Subsidiary who the Chief Executive Officer designates as eligible to participate.

“Level Three Participant” means a Participant employed in a Level Three position during the relevant eligibility period under Section 3.

“Participant” means an Employee eligible for a Plan benefit under Section 3 as a Level One Participant, Level Two Participant, or Level Three Participant.

“Plan” means the Lyondell Chemical Company Executive Severance Pay Plan, as amended from time to time.

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“Subsidiary” means (i) any corporation, limited liability company or similar entity of which the Company directly or indirectly owns shares representing more than 50% of the voting power of all classes or capital stock of such corporation which have the right to vote generally on matters submitted to a vote of the shareholders of that entity, (ii) LYONDELL-CITGO Refining, LP so long as the Company maintains an equity ownership interest equal to at least 25% in that entity, or (iii) any other entity in which the Company has an equity ownership interest of at least 25%, so long as the Committee designates that entity as a Subsidiary for Plan purposes.

3. Administration and Eligibility.

(a) Administration. The Plan shall be administered by the Committee, which shall have full and exclusive power to interpret this Plan and to adopt rules, regulations and guidelines to carry out this Plan as it deems necessary or appropriate. The Committee, in its discretion, may retain the services of an outside administrator to perform any of its Plan functions. Any Committee decision in interpreting and administering this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Notwithstanding the foregoing, on or before a Change in Control, the Board shall designate a successor plan administrator which, in all events, shall be independent of the Company and any Company affiliate. The successor plan administrator shall have all the powers given under the Plan to the Committee to (i) determine all questions relating to Plan benefits; (ii) adopt rules and procedures to administer the Plan; and (iii) interpret Plan provisions.

(b) Eligibility to Participate. Employees, who, at any time in the two (2) year period before a Change in Control, occupied a position classified as Level One or Level Two, shall be eligible to receive Plan benefits and those individuals shall be Level One Participants and Level Two Participants, respectively. In addition, the Chief Executive Officer may designate Employees in Level Two or Level Three, individually or by employee classification, as Level Two or Level Three Participants under the Plan. The Chief Executive Officer must notify an Employee of designation as a Level Two or Level Three Participant in writing, with notice delivered to the Participant and a copy sent to Committee members. Notwithstanding the foregoing, an Employee will not be eligible to become a Participant so long as that Employee is currently eligible for a severance benefit upon termination of employment with the Company pursuant to a plan or agreement established by Millennium Chemicals, Inc. or any of its former subsidiaries or affiliates.

(c) Eligibility for Severance Benefits. If a Participant’s employment is terminated within two years following a Change in Control, (i) by the Participant within ninety (90) days after any event occurs which constitutes a Constructive Termination for Good Reason, or (ii) by the Employer for reasons other than (A) Cause, or (B) the Participants’ death or Disability, then the Company will provide or cause to be provided to the Participant the rights and benefits in Section 4. No event which occurs on or after the date an Employer ceases to be a Subsidiary shall entitle a Participant employed by that former Subsidiary to receive any severance benefits pursuant to Section 4.

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4. Severance Benefits. If a Participant is eligible for Severance Benefit under Section 3(c), then the Company shall provide or cause to be provided to the Participant benefits as follows:

(a) Salary and Other Payment at Termination. The Company shall pay to the Participant a cash lump-sum payment in the amount of:

(i) for Level One Participants, three (3) times the Participant’s Applicable Annual Earnings;

(ii) for Level Two Participants, two (2) times the Participant’s Applicable Annual Earnings; and

(iii) for Level Three Participants, one (1) times the Participant’s Applicable Annual Earnings.

(b) Stock Options. All non-vested stock options which have been granted to the Participant under any of the Company’s incentive plans (a “Stock Option Plan”) shall become 100% vested and fully exercisable as of the date of the Change in Control, notwithstanding any provision of the Stock Option Plans or the Participant’s associated stock option agreements, if any, to the contrary.

If the Company is the surviving entity following a Change in Control, to the extent compliant with the Act, all stock options owned by a Participant shall be freely exercisable for the remainder of their existing terms without regard to any earlier date in any Stock Option Plan or associated stock option agreement, including, without limit, an earlier expiration date on a Participant’s employment termination.

(c) Minimum Retirement Benefits. If a Participant is not fully vested when he becomes eligible for Severance Benefits, the Company shall cause the Participant to be treated as if fully vested in the Employer’s qualified defined benefit retirement plan, and to be fully vested in the Company’s Supplementary Executive Retirement Plan (or its successor), and any Subsidiary plan comparable to the Company’s Supplementary Executive Retirement Plan. If the Participant has not satisfied the minimum age and service requirements for early retirement eligibility under these plans, the Company shall also cause the Participant to be treated as having satisfied or to have satisfied the minimum age and service requirements for early retirement eligibility to determine the Participant’s eligibility to commence benefit payments under these plans. To determine the amount of benefits payable under the Employer’s qualified defined benefit plan and Supplementary Executive Retirement Plan (or its successor) or comparable Subsidiary plan, benefits shall be calculated for a Participant who has attained age 55 when benefit payments commence as if the Participant met the plans’ early retirement eligibility requirements. Benefits for a Participant who has not attained age 55 when benefit payments commence shall be calculated as if the Participant had met early retirement eligibility requirements, and then shall be actuarially adjusted to reflect early commencement of the benefit. Payments attributable to these calculations which exceed any amount actually payable under the Employer’s qualified defined benefit retirement plan under this Section 4(c) shall be paid in a lump sum cash payment on employment termination. If the Participant is covered under a Subsidiary’s qualified defined benefit plan or a Subsidiary plan comparable to the Company’s Supplementary Executive Retirement Plan, the Company will cause the Subsidiary to provide a lump-sum cash payment on employment termination equal to the excess (if any) of the amount payable under this Section 4(c) and the present value of the amount payable under the Subsidiary’s plans. No payment under this Section shall be deemed to be any part of the Participant’s benefit vested on or before December 31, 2004 under any Employer Supplementary Executive Retirement Plan.

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The Participant shall be eligible for coverage under the retiree medical plan of the Company (or its successor) on employment termination, regardless of attained age and service. Excluding eligibility requirements, coverage shall be provided for the Participant and the Participant’s dependents on the same terms and conditions, as that provided to other retired executives or senior managers of the Company (or its successor) in the same class or category of position as the Participant held before the Change in Control; provided, however, that the medical coverage in Section 4(d) shall govern for the first twenty-four (24) months following termination if that coverage is more favorable to the Participant.

(d) Insurance and Other Benefits. For a period of twenty-four (24) months following termination, the Participant (and his or her dependents, as applicable) shall be covered at the Company’s expense by the Company’s life insurance, medical, dental, accident and disability plans or any successor to a plan or program in effect at employment termination for active employees in the same class or category as the Participant, or who would be in the same class or category if employed by the Company (hereafter individually and collectively referred to as “Welfare Plan”), subject to the terms of the Welfare Plan and to the Participant’s continued contributions, if required, which contributions shall not exceed those charged to active employees in the same class or category in which the Participant was employed by the Company. If the Participant is ineligible to continue to be covered under the terms of any Welfare Plan, or if the Participant is eligible but the benefits applicable to the Participant (and his dependents, as applicable) are not substantially equivalent to those benefits immediately before employment termination, then, the Company, at its expense, shall provide to the Participant (and his or dependents, as applicable) benefits substantially equivalent to those in effect immediately before employment termination through other sources for a period of twenty-four (24) months following employment termination,. Any continuation coverage required under the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (“COBRA”) under any Company group health plan shall be in addition to the coverage provided under this Section and shall not begin until the twenty-four (24) month period ends.

If the Company is unable to make monthly payments for these benefits under the Act, the Company shall calculate the cost of the benefits, at the rate in effect at employment termination, for the twenty-four (24) month period and shall pay that amount to the Participant at the same time other Severance Benefits are paid. The Participant then shall be responsible for any payment required to provide these benefits.

(e) Outplacement. The Company, at its expense, shall provide reasonable outplacement assistance to the Participant for a period not to exceed one (1) year from a professional outplacement assistance firm which is reasonably suitable to the Participant and commensurate with his position and responsibilities. In no event will the amount expended for outplacement assistance for the Participant exceed $40,000 USD.

(f) Certain Tax Payments. If the Participant becomes entitled to one or more payments (with a “payment” including, without limit, an increase in pension benefits and the vesting of an option or other non-cash benefit or property) under the terms of any plan, arrangement or agreement with the Employer (the “Change in Control Payments”), which are or

10

become subject to the tax imposed by Code Section 4999 of the Code (or any similar tax that may be imposed) (the “Excise Tax”), the Company shall pay to the Participant an additional cash amount (the “Additional Gross-up Payment”) such that the net amount retained by the Participant after reduction for (i) any Excise Tax on the Change in Control Payments and (ii) any federal, state and local income or employment tax and Excise Tax payable with respect to the Additional Gross-up Payment, shall equal the Change in Control Payments. To determine the amount of the Additional Gross-up Payment, the Participant shall be deemed (i) to pay federal income taxes at the highest stated rate of federal income taxation (including surtaxes, if any) for the calendar year in which the Additional Gross-up Payment is to be made; and (ii) to pay any applicable state and local income taxes at the highest stated rate of taxation (including surtaxes, if any) for the calendar year in which the Additional Gross-up Payment is to be made. Any Additional Gross-up Payment required hereunder shall be made to the Participant at the same time any Change in Control Payment subject to the Excise Tax is paid or deemed received by the Participant. The Additional Gross-up Payment shall not be paid under this Plan if an Additional Gross-up Payment which is identical to or greater than the amount calculated in this Section 4(f) is paid under any plan, arrangement or agreement with the Employer.

If, in connection with the examination of a Participant’s tax return, the Internal Revenue Service asserts that any amount payable or benefit provided hereunder is a “parachute payment” as defined in the Code and that amount or benefit was not treated as a parachute payment in determining an Additional Gross-up Payment, the Company, at its cost, shall assume the defense of any controversy involving this issue and shall indemnify and hold the Participant harmless for all liabilities, costs, taxes, interest and penalties attributable to this issue and, to the extent necessary (without duplication), shall increase the Additional Gross-up Payment to give effect to any additional amount or benefit determined to be a parachute payment. The Participant shall cooperate with the Company so the Company will be able to challenge any adverse determination by the Internal Revenue Service through administrative proceedings and, if the Company decides, through litigation.

(g) No Duty to Mitigate; Offsets. A Participant’s Severance Benefit entitlement shall not be governed by any duty to mitigate the Participant’s damages by seeking further employment nor offset by any compensation which the Participant may receive from future employment. However, a Participant’s payment under Section 4(a) shall be reduced by any payment required by law, regulation, custom, contract, agreement or other Company or Employer severance plan related to the Participant’s employment termination, including but not limited to, any salary continuation during any notice period required by law, other than the notice period applicable to a Constructive Termination for Good Reason.

(h) Time of Payments. Any cash payment under this Section shall be paid to a Participant within thirty (30) days of the Participant’s employment termination, unless the Participant is a Key Employee. Cash payments and benefits to a Participant who is a Key Employee shall be made six (6) months after that Participant’s severance from service, to the extent required by the Act.

5. Company Benefit Plans. The specific arrangements referred to in this Plan are not intended (i) to exclude or limit a Participant’s participation in other benefit plans or programs in which the Participant currently participates or may participate including, without limit, retiree benefits, or benefits which are available to executive personnel generally in the same class or

11

category as the Participant or (ii) to preclude or limit other compensation or benefits as may be authorized by the Committee or the Governing Body from time to time. If not otherwise paid or provided, the Company shall timely pay or provide to the Participants and/or the Participant’s dependents any other amounts or benefits required to be paid or provided or which the Participant or the Participant’s dependents are eligible to receive under this Plan and under any plan program, policy or practice or contract or agreement of the Company as in effect and applicable generally to executive personnel in the same class or category of a Participant.

6. Payment Obligations Absolute. The Company’s obligation to pay or provide, or to cause to be paid or provided, to Participants the amounts and benefits and to make the arrangements provided in this Plan shall be absolute and unconditional and shall not be affected by any circumstances (including, without limit, any claim, counterclaim, recoupment, defense or other right, which the Employer may have against a Participant or anyone else, other than an offset provided under Section 4(g)). All amounts payable by or on behalf of the Company shall be paid without notice or demand. Each and every payment made by or on behalf of the Company shall be final and the Company and its subsidiaries or affiliates, for any reason whatsoever, shall not seek to recover all or any part of that payment from a Participant or from whomever shall be entitled to it. In no event shall an asserted violation of any Plan provision constitute a basis to defer or withhold any amount payable to, or on behalf of, a Plan Participant.

7. Confidentiality and Cooperation.

(a) Cooperation. Following termination, Participants will furnish information and render assistance and cooperation as reasonably requested in connection with any litigation or legal proceedings concerning the Company, any of its Subsidiaries (other than any legal proceedings arising out of or concerning Participant’s employment or Participant’s termination). The Company will pay or reimburse Participants for reasonable expenses in connection with this cooperation.

(b) Release of Liability. Each Participant, as a further eligibility condition for Plan benefits under Section 4, must execute and deliver to the Company, in a form acceptable to the Company, a separate release and waiver, which, without limiting the generality of the foregoing, shall include a release and discharge of the Company, its Subsidiaries, and its and their directors, board of directors, officers, employees, owners, agents, successors and assigns from any and all suits, causes of action, demands, claims, charges, complaints, liabilities, costs, losses, damages, injuries, bonds, judgments, attorneys’ fees and expenses, in any form whatsoever, in law or in equity, whether known or unknown, whether suspect or unsuspected, arising out of the Participant’s employment with Company or any Subsidiary through his termination.

8. Plan Term. If a Change in Control occurs, this Plan shall continue in full force and effect and shall not terminate or expire until all Participants who become entitled to any Plan payments shall have received those payments in full. The Committee may amend, substitute, revoke or terminate the Plan at any time before a Change in Control; provided, however, that no amendment, substitution, revocation or termination shall occur without consent of the affected Participants if a third party has submitted a proposal to the Board that is reasonably calculated, in the Committee’s judgment to effect a Change in Control. After a Change in Control, the Plan shall not be amended, substituted, revoked or terminated in any respect which adversely affects a Participant’s rights of a Participant without the Participant’s consent.

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Notwithstanding the above, if any Plan provision would result in an additional tax under the Act, that provision will be reformed to avoid the additional tax and no action taken to comply with the Act shall be deemed to adversely affect a Participant’s rights. Without limiting this general provision, the Plan may be amended to modify (i) the definition of “Constructive Termination for Good Reason,” (ii) the conditions for eligibility under Section 3(c), (iii) the time to pay or provide benefits under Section 4, and (iv) eligibility for insurance coverage under Section 4, including retiree medical coverage, to the extent necessary to avoid imposition of an additional tax under the Act.

9. Notices. All notices, requests, demands and other communications required or permitted to be given under this Plan (“notices”) shall be in writing and shall be deemed to have been given if delivered by-hand, given by facsimile or telegram, or mailed via certified or registered U.S. mail, to the party to receive the notice at the party’s address set forth below; provided that either party may change its address for notice by giving the other party written notice of that change.

If to the Company:

Lyondell Chemical Company

1221 McKinney, Suite 700,

Houston, TX 77010

Attn: Chairman of the Board of Directors

If to a Participant:

Last address on the books of the Employer.

Any notice given under this Plan shall be deemed received (i) when delivered if delivered by-hand or mailed and; (ii) 24 hours after sending, if sent by facsimile or telegram.

10. Claims Procedure. If a Participant or his authorized representative (“claimant”) makes a written request alleging a right to receive Plan benefits or alleging a right to receive an adjustment in Plan benefits being paid, the Committee shall treat it as a benefit claim. All benefit claims under the Plan shall be sent to the Committee and must be received within thirty (30) days after employment termination. The decision will be made within ninety (90) days after the Committee receives the claim unless the Committee determines additional time due to special circumstances is needed. If the Committee determines that an extension to process a claim is required, the final decision may be deferred up to one hundred eight (180) days after the claim is received, if the claimant is notified in writing of the need for the extension and the anticipated date of a final decision before the end of the initial ninety (90) day period.

If the Committee decides that any individual who has claimed a right to receive benefits, or different benefits, under the Plan is not entitled to receive all or any part of the benefits claimed, it will inform the claimant in writing, in terms calculated to be understood by the claimant, of the specific reasons for the denial, the Plan provisions on which the denial is based, a description of additional material of information necessary to perfect the claim and an explanation of why the material or information is needed, and an explanation of the Plan’s claim

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review procedures. If no action is taken on the claim within the time periods shown above, the claim shall be deemed denied on the last day of the applicable time period. The claimant is entitled to a full and fair review of the denied claim after actual or constructive notice of a denial.

The claimant must file a written request for review with the Committee, setting forth the grounds for the request and any supporting facts, comments or arguments he wishes to make, within sixty (60) days after actual or constructive notice. If a written request for review is not received within this sixty (60) day period, the denial will be final. The claimant shall have reasonable access to all relevant documents pertaining to the claim.

The Committee or the persons responsible to conduct the review on the Committee’s behalf shall conduct a full and review the claim. Unless special circumstances require an extension of the review period, the Committee will render its decision no later than the date of its next regularly scheduled meeting, unless the request is filed less than thirty (30) days before that meeting. If the request is filed less than thirty (30) days before a regularly scheduled meeting, the Committee will render its decision no later than the date of the second regularly scheduled meeting after it receives the request. However, if special circumstances require an extension of the review period, a final decision shall be rendered no later than the third regularly scheduled meeting after it receives the request for review, if the claimant is notified in writing of the special circumstances and the date of the expected decision, before the time is extended due to special circumstances. If the decision on review is not furnished to the claimant within the applicable time period(s), the claim shall be denied on the last day of the applicable period. Committee decisions shall be in writing and provided no later than five (5) days after the decision is made. The decision shall include specific reasons for the action taken, including the specific Plan provisions on which the decision is based. The claimant shall be notified of the right to reasonable access, on request, to relevant documents or other information without charge.

11. Arbitration of Disagreements. Any dispute, controversy or claim arising out of or relating to Plan obligations (after exhaustion of the claims procedure remedies under Section 10), shall be settled by final and binding arbitration according to the American Arbitration Association Employment Dispute Resolution Rules. The arbitrator shall be selected by mutual agreement of the parties, if possible. If the parties fail to reach agreement upon appointment of an arbitrator within thirty (30) days after one party receives the other party’s notice of desire to arbitrate, the arbitrator shall be selected from a panel or panels submitted by the American Arbitration Association (the “AAA”). The selection process to be used is set forth in the AAA Employment Dispute Resolution Rules, but if the parties fail to select an arbitrator from one or more panels, AAA shall not have the power to appoint and arbitrator, but shall continue to submit additional panels until an arbitrator has been selected. All fees and expenses of the arbitration, including a transcript if requested, will be borne by the parties equally.

12. Miscellaneous.

(a) Assignment. No right, benefit or interest hereunder shall be subject to assignment, anticipation, alienation, sale, encumbrance, charge, pledge, hypothecation or set-off for any claim, debt or obligation, or subject to execution, attachment, levy or similar process; but a Participant may assign any right, benefit or interest if the assignment is permitted under the terms of any plan or insurance policy, or annuity contract governing that right, benefit or interest.

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(b) Construction. Nothing in this Plan shall be construed to amend any provision of any plan or policy of the Company or any Subsidiary except as otherwise expressly noted herein. This Plan is not, and shall not, be deemed to create any commitment by the Company or any Subsidiary to continue a Participant’s employment. The captions of this Plan are not part of the provisions and shall have no force or effect. Whenever the context requires, the masculine gender includes the feminine gender, and words used in the singular or plural will include the other.

(c) Successors. A Participant’s rights under this Plan are personal to the Participant and shall not be assignable by a Participant other than by will or the laws of descent and distribution without the Company’s prior written consent. This Plan shall inure to the benefit of and be enforceable by a Participant’s legal representatives. The Company will require any successor to assume this Plan, and to agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform this Plan if no succession had taken place. The Company’s failure to obtain the successor’s assumption and agreement shall entitle a Participant to compensation from the Company in the same amount and on the same terms as he would be entitled under this Plan as if a Constructive Termination for Good Reason had occurred.

This Plan shall be binding upon and inure to the benefit of the Company and any successor organization or organizations which shall succeed to substantially all of the Company’s business and/or assets (whether directly or indirectly by merger, consolidation, acquisition of substantially all the Company’s assets or otherwise, including by operation of law).

(d) Taxes. Any payment or delivery required under this Plan shall be subject to all legal requirements regarding tax withholding, filing, reporting and other obligations.

(e) Governing Law. TO THE EXTENT THIS PLAN IS NOT GOVERNED BY FEDERAL LAW, THIS PLAN SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES.

LYONDELL CHEMICAL COMPANY

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EX-10.6

Exhibit 10.6

INSTRUMENT AMENDING

LYONDELL CHEMICAL COMPANY

EXECUTIVE DEFERRAL PLAN

LYONDELL CHEMICAL COMPANY hereby amends, effective February 23, 2006, the Lyondell Chemical Company Executive Deferral Plan, (“Plan”) applicable to deferrals before 2005 to merge the Plan into the 2005 Lyondell Chemical Company Executive Deferral Plan, (“Executive Deferral Plan”). The Executive Deferral Plan shall be the surviving plan and its terms shall apply to all deferral accounts now held under the Executive Deferral Plan as a result of the merger.

IN WITNESS WHEREOF, LYONDELL CHEMICAL COMPANY, acting by and through its duly authorized officer, has caused this Instrument to be executed on this 23rd day of February, 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ Janna Sewell	BY:	/s/ Dan F. Smith
	Assistant Secretary		Dan F. Smith
			President and Chief Executive Officer

INSTRUMENT AMENDING

LYONDELL CHEMICAL COMPANY

DEFERRAL PLAN

LYONDELL CHEMICAL COMPANY hereby amends the Lyondell Chemical Company Deferral Plan, to read in its entirety as the document entitled “Lyondell Chemical Company Executive Deferral Plan”, attached hereto.

IN WITNESS WHEREOF, LYONDELL CHEMICAL COMPANY, acting by and through its duly authorized officer, has caused this Instrument to be executed on this 23rd day of February. 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ Janna Sewell	BY:	/s/ Dan F. Smith
	Assistant Secretary		Dan F. Smith
			President and Chief Executive Officer

Lyondell Chemical Company

EXECUTIVE DEFERRAL PLAN

Amended and Restated, February 23, 2006

Lyondell Chemical Company

Executive Deferral Plan

Table of Contents

ARTICLE I GENERAL PROVISIONS		1
Section 1.1	Purpose and Intent	1
Section 1.2	Effective Date	1
Section 1.3	Definitions	1
ARTICLE II PARTICIPATON AND DEFERRAL ELECTIONS		5
Section 2.1	Eligibility and Participation	5
Section 2.2	Deferral Types	5
Section 2.3	Deferral Elections	5
Section 2.4	Deferral Limits	5
Section 2.5	Separation from Service	6
Section 2.6	Transfers	6
Section 2.7	Modification of Deferral Elections	6
ARTICLE III DEFERRED COMPENSATION ACCOUNTS		7
Section 3.1	Accounts	7
Section 3.2	Deferred Compensation	7
Section 3.3	Interest Rate	7
Section 3.4	Account Value	7
Section 3.5	Vesting	8
Section 3.6	Account Statements	8
ARTICLE IV PLAN BENEFITS		9
Section 4.1	Basic Plan Benefit	9
Section 4.2	Distribution Elections	9
Section 4.3	Survivor Benefits	11
Section 4.4	Early Distribution	12
Section 4.5	Financial Hardship Distribution	12
Section 4.6	Valuation and Settlement	12
Section 4.7	Small Benefit	13
Section 4.8	Benefits On a Change in Control	13
Section 4.9	Events Constituting a “Change in Control”	13
ARTICLE V BENEFICIARY DESIGNATION		16
Section 5.1	Beneficiary Designation	16
Section 5.2	Failure to Designate a Beneficiary	16

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ARTICLE VI ADMINISTRATION		17
Section 6.1	Interpretation	17
Section 6.2	Administrative Records	17
Section 6.3	Claims	17
Section 6.4	Committee Liability	18
ARTICLE VII AMENDMENT AND TERMINATION		19
Section 7.1	Plan Amendment	19
Section 7.2	Termination	19
Section 7.3	Effect of Amendment or Termination	19
Section 7.4	Effect of Legislation	19
ARTICLE VIII MISCELLANEOUS		20
Section 8.1	Unfunded Benefit Plan	20
Section 8.2	Unsecured General Creditor	20
Section 8.3	Grantor Trust	20
Section 8.4	Non-Assignment	20
Section 8.5	No Employment Right	21
Section 8.6	Adjustments	21
Section 8.7	Obligation to Company	21
Section 8.8	Protective Provisions	21
Section 8.9	Gender, Singular and Plural	21
Section 8.10	Governing Law	21
Section 8.11	Notice	22
Section 8.12	Successors and Assigns	22
Section 8.13	Incapacity	22

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ARTICLE I

GENERAL PROVISIONS

Section 1.1 Purpose and Intent.

This Plan is intended to provide the opportunity for eligible Employees to accumulate supplemental funds for retirement or special needs before retirement through deferral of portions of their regular Salary, Awards and Executive Supplementary Savings Plan benefits.

This Plan replaces the deferral provisions of the Lyondell Chemical Company Executive Deferral Plan for amounts deferred before 2005 (“Prior Plan”) to conform to the requirements of Code Section 409A and any related regulation or other guidance promulgated by applicable governmental agencies (“Code Section 409A”) and establishes the provisions of this Plan as intended to apply to deferrals of compensation earned or accrued in 2005 and thereafter. Effective February 23, 2006, the Prior Plan was merged into this Plan and the terms of this Plan shall govern the Prior Plan Account.

Section 1.2 Effective Date.

This Plan document generally shall be effective as of January 1, 2005 and shall apply to Plan Participants on or after January 1, 2005, unless certain provisions specify that they are effective on a different date.

Section 1.3 Definitions.

Account means a separate bookkeeping account maintained by the Company for each Employee which measures and determines the amounts to be paid to the Employee under the Plan. An Account may be divided in subaccounts as needed to reflect particular Deferral Elections.

Administrative Committee means the Benefits Administrative Committee of the Company.

Awards means immediate cash awards made under the Lyondell Chemical Company annual incentive compensation plans for executives and senior managers or awards under any other plan that the Board of Directors of Lyondell Chemical Company, or its Compensation and Human Resources Committee, has authorized the Company to adopt and to treat as Awards under this Plan.

Beneficiary means a person who is entitled to receive a Participant’s interest under this Plan when the Participant dies before his Account is totally distributed.

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Change in Control means a change in the control of Lyondell Chemical Company as defined in Section 4.9.

Code means the Internal Revenue Code of 1986, as amended, including any successor provisions and any regulations or other guidance promulgated by applicable governmental agencies.

Company means Lyondell Chemical Company, a Delaware corporation, or its successor.

Deferral Election means a Participant’s election to defer Salary, Awards, and/or ESSP Benefits during a Deferral Period according to Article II.

Deferral Period means the particular calendar year for which a Deferral Election is made. A new Deferral Period begins each January 1 and ends each December 31.

Deferred Compensation means the amount of Salary, Awards and/or ESSP Benefits a Participant elects to defer by a Deferral Election.

Disability means a medically determinable physical or mental impairment which is expected to last for at least a continuous twelve (12) month period or is expected to result in death, where the Participant (i) either cannot engage in any substantial gainful employment due to the impairment or (ii) is receiving disability benefits for at least three (3) months under the Company’s applicable disability plan.

Distribution means a distribution of a Participant’s Account as a result of a Separation from Service or other event specified under this Plan and permitted by Code Section 409A.

Early Distribution means a Distribution before Separation from Service as specified in Section 4.4 and permitted by Code Section 409A.

Effective Date means January 1, 2005.

Employee means a regular salaried employee of the Company.

ERISA means the Employee Retirement Income Security Act of 1974, as amended, including any successor provisions and any regulations or other guidance promulgated by applicable governmental agencies.

ESSP Benefits means benefits under the Company’s Executive Supplementary Savings Plan.

Financial Hardship means a condition of severe financial difficulty due to an unforeseeable emergency resulting from (i) an illness or accident of the Participant, his spouse

2

or dependent; (ii) a casualty causing a Participant’s property loss; or (iii) other similar or extraordinary and unforeseeable circumstances created by events beyond the Participant’s control, as determined by the Administrative Committee, upon advice of counsel, based on written information supplied by the Participant and which is sufficient, in counsel’s judgment, to justify a change in a Distribution election under the Plan without causing the Participant or any other Participant to receive taxable income from the Plan before the Participant actually receives his benefit.

Interest Rate means the interest rate announced by the Company before the Deferral Period and applied to the Participant’s Account during that Plan Year.

Key Employee means an Employee who, at any time during the prior Plan Year, was identified as (i) an officer of the Company with annual compensation greater than $130,000, as adjusted, (ii) a five percent (5%) owner of the Company, or (iii) a one percent (1%) owner of the Company with annual compensation from the Company of more than $150,000, as adjusted, as determined according to the requirements of Code Sections 409A and 416(i). For Plan Distribution purposes, an Employee identified as a Key Employee during a year ending on an identification date shall be considered a Key Employee for a twelve (12) month period beginning on the following April 1. December 31 of the prior Plan Year shall be used as the identification date to identify Key Employees under Code Section 409A.

Participant means any Employee who is participating in this Plan under Article II, and any former Employee who has not received the entire benefit to which he is entitled under this Plan.

Plan means this Lyondell Chemical Company Executive Deferral Plan.

Plan Year means each calendar year beginning on January 1 and ending on December 31.

Prior Plan Account means the amounts deferred under the Prior Plan before 2005 and associated earnings.

Salary means the Employee’s regular, biweekly salary, excluding Awards and any other special or additional compensatory payments made by the Company.

Separation from Service means the Participant’s employment termination from Lyondell Chemical Company, or any of its Subsidiaries and Affiliates, which complies with the requirements of Code Section 409A. A transfer to or from Lyondell Chemical Company and any of its Subsidiaries or Affiliates shall not be a Separation from Service under this Plan.

3

Subsidiaries or Affiliates means:

(a) All corporations that are members of a controlled group of corporations within the meaning of Code Section 414(b) and of which the Company is then a member, and

(b) All trades or businesses, whether or not incorporated, that are then under common control with the Company within the meaning of Code Section 414(c).

Survivor Benefit means the benefit under Section 4.3 provided when a Participant dies before his Account is distributed.

Valuation Date means the last day of each month, or another date the Administrative Committee determines, in its discretion, which may be either more or less frequent, used to value Participants’ Accounts.

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ARTICLE II

PARTICIPATION AND DEFERRAL ELECTIONS

Section 2.1 Eligibility and Participation.

(a) Eligibility. Eligibility to participate in this Plan shall be limited to Employees who (1) are eligible to receive an Award (2) are participants in the Executive Supplementary Savings Plan, or (3) have been designated as eligible by a specific resolution of the Administrative Committee upon recommendation of the Company’s Vice President, Human Resources. Effective January 1, 2006, an Employee who becomes eligible to participate in this Plan after a Deferral Period begins shall not be eligible to participate until the following Deferral Period.

(b) Participation. An eligible Employee may elect to participate in the Plan by submitting a Deferral Election for a Deferral Period.

Section 2.2 Deferral Types.

A Participant may elect to defer Salary, Awards and/or ESSP Benefits, subject to any limits, conditions or restrictions, such as minimum or maximum deferral amounts, as the Administrative Committee prescribes before the Deferral Period begins. A Participant may also elect to defer an Early Distribution at the time and in the manner the Administrative Committee prescribes.

Section 2.3 Deferral Elections.

Before each Deferral Period, at a time and in the manner the Administrative Committee prescribes, each eligible Employee may elect to defer Salary, Awards, and/or ESSP Benefits. The time and form of Distribution of the deferred amount shall be elected when the Deferral Election is made. This Deferral Election shall be irrevocable after the Deferral Period begins, unless modifications are authorized under Section 2.7.

Section 2.4 Deferral Limits.

Deferral Elections are subject to the following limits:

(a) A Participant may not defer more than fifty percent (50%) of his Salary.

(b) The Administrative Committee shall establish a minimum amount that may be deferred before the Deferral Period begins.

5

Section 2.5 Separation from Service.

Any outstanding Deferral Election relating to Awards and/or ESSP Benefits payable after Separation from Service shall remain binding; otherwise, a Participant’s Deferral Elections shall terminate on the Participant’s Separation from Service.

Section 2.6 Transfers.

A Participant’s Deferral Elections shall be irrevocable regardless of a transfer of employment among Lyondell Chemical Company, any of its Subsidiaries or Affiliates, or LYONDELL-CITGO Refining LP. When a transfer occurs, the Participant’s Deferral Election shall continue to apply to Awards, Salary or ESSP Benefits granted by the transferee company and the transferee company’s deferral plan shall assume responsibility for the remainder of the Deferral Period, if any, subject to any Deferral Election that the Participant made under the transferor company’s plan.

Section 2.7 Modification of Deferral Elections.

The Administrative Committee may permit a Participant to cease remaining deferrals under a Deferral Election upon finding that the Participant has suffered a Financial Hardship, to the extent that the Deferral Election may be revoked as a result of Financial Hardship under the Code Section 409A or a hardship Distribution under Code Section 401(k).

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ARTICLE III

DEFERRED COMPENSATION ACCOUNTS

Section 3.1 Accounts.

Accounts shall be maintained for each Participant for record-keeping purposes only. A Participant’s Account may be divided into subaccounts if necessary to determine how a Participant’s Distribution Elections shall apply to portions of the Account.

Section 3.2 Deferred Compensation.

A Participant’s Deferred Compensation shall be credited to the Participant’s Account on the date when the corresponding non-deferred portion of the compensation is paid or would have been paid but for the Deferral Election. The Company shall have the right to withhold from Salary (or otherwise to cause the Participant or the executor or administrator of his estate, or his Beneficiary) to pay any federal, state, local and/or foreign taxes required to be withheld on any Deferred Compensation.

Section 3.3 Interest Rate.

Interest shall be credited monthly on the balance of the Account on each Valuation Date beginning on the date when deferred amounts are credited to the Account. A Participant’s Account will be credited with interest monthly during each Plan Year before the full Distribution of the Participant’s Account at the Interest Rate previously announced by the Company to apply during the Plan Year. Prior to January 1, 2006, the monthly Interest Rate shall be based on the previous monthly average of the Salomon Brothers Corporate BB Bond Yield. Effective January 1, 2006, the monthly Interest Rate during the Plan Year shall be based on the previous monthly average of the closing yield to maturity, as reported by Bloomberg, of Lyondell Chemical Company’s most junior publicly traded debt on December 1 of the prior Plan Year. If this debt is retired during the Plan Year, the monthly interest Rate shall be based on the previous monthly average of the then longest maturity for the Company’s most junior publicly traded debt.

Section 3.4 Account Value.

A Participant’s Account on each Valuation Date shall consist of the balance of the Participant’s Account on the immediately preceding Valuation Date, plus the amount of the Participant’s Deferred Compensation since the Valuation Date, plus interest credited to the Account, and minus any Distributions or reductions made from the Account since the immediately preceding Valuation Date.

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Section 3.5 Vesting.

Each Participant shall be one hundred percent (100%) vested at all times in the amounts credited to the Participant’s Account.

Section 3.6 Account Statements.

The Company shall provide each Participant with periodic statements setting forth the Participant’s Account balance.

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ARTICLE IV

PLAN BENEFITS

Section 4.1 Basic Plan Benefit.

Except as provided in Section 4.2, if a Participant has a Separation from Service, the Company shall pay a Plan benefit equal to the Participant’s Account, including interest at the Interest Rate established in Section 3.3. Interest is payable on a Participant’s Account balance until the Account is fully distributed.

Section 4.2 Distribution Elections.

(a) Time and Form of Distribution. If the Participant becomes entitled to a Distribution due to Separation from Service on or after attaining age fifty-five (55) with at least ten (10) years of service recognized by the Company or due to Disability, Distribution shall be made at the time and form specified in the applicable Deferral Elections, except as provided in this section or in (f)(2) below. However, if the Participant’s Separation from Service is due to a transfer to LYONDELL-CITGO Refining LP, the Participant will become entitled to a Distribution in the tenth (10^th) calendar year following the year when the transfer occurred.

A Participant may elect one or more of the following forms and commencement dates for all or portions of his Account.

(1) Lump Sum. A single payment of all of the amount deferred under a Deferral Election.

(2) Installment Payments. Monthly installment payments for five (5), ten (10) or fifteen (15) years of the amount deferred under a Deferral Election in substantially equal payments of principal and interest.

Notwithstanding the foregoing, a Participant’s Account may be distributed earlier under the Plan terms due to death or Financial Hardship, as provided in Sections 4.3 and 4.5, or for other reasons as may be provided under Code Section 409A.

A Prior Plan Account for a Participant who was not an Employee of the Company or a Subsidiary on February 23, 2006 shall be distributed according to the criteria established under the Prior Plan and the Distribution election in effect on February 23, 2006. This Distribution election shall be irrevocable.

(b) Distribution Elections Inapplicable. If a Participant’s Account becomes distributable due to Separation from Service before attaining age fifty-five (55) with at least

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ten (10) years of service recognized by the Company, except as provided in (f)(2) below, the Participant’s Deferral Elections shall be disregarded and the Participant’s Account will be paid in substantially equal payments of principal and interest over a three (3) year period. Distribution shall begin as soon as administratively possible, but no later than sixty (60) days after a Separation from Service or as provided in (e) if the Participant is a Key Employee unless the Participant’s Separation from Service is due to a transfer to LYONDELL-CITGO Refining LP. However, if the Participant transfers to LYONDELL-CITGO Refining LP, the Participant will become entitled to a Distribution in the tenth (10^th) calendar year following the year when the transfer occurred. The amount of each monthly installment shall be redetermined, effective January 1 of each year, based on the remaining balance subject to the installment payment election and the remaining number of installment payments.

(c) Failure to Make a Distribution Election. If the Participant becomes entitled to a Distribution on Separation from Service on or after attaining age fifty-five (55) with at least ten (10) years of service recognized by the Company or due to a Disability and has failed to make a Distribution election for an amount deferred for a particular Deferral Period, except as provided in (f)(2) below, that portion of the Participant’s Account balance will be distributed immediately in a single cash payment as soon as administratively possible, but no later than sixty (60) days following that distributable event or as provided in (e) if the Participant is a Key Employee.

(d) Change in Time or Form of Distribution. A Participant may elect to delay the commencement, or change the form, of a Plan Distribution, according to procedures adopted by the Administrative Committee, but (1) the election may not become effective until at least twelve (12) months after the date the Distribution election is made, (2) the election must defer payment for a period of at least five (5) years after the original Distribution date and (3) the new Distribution election must be made at least twelve (12) months before the date the original Distribution was scheduled to occur.

(e) Key Employees. If a Participant is a Key Employee whose Account becomes distributable due to Separation from Service, a Distribution shall not begin until six (6) months following the Key Employee’s Separation from Service, whether in a lump sum or installment payment form. Lump sum and installment payments shall be calculated on the Account value at the delayed Distribution date and shall commence as soon as administratively possible following the delayed Distribution date.

(f) Special Distribution Election Rules.

(1) A Participant who made a Deferral Election for the Deferral Period beginning on January 1, 2005 (“2005 Deferral Election”) may elect to change the time or form of Distribution of the amount deferred under the 2005 Deferral Election, according to procedures established by the Administrative Committee, if the Distribution change is made before December 31, 2005.

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(2) A Participant who is an Employee of the Company or a Subsidiary on February 23, 2006 (“Active Participant”) and whose Prior Plan Account was merged into this Plan effective February 23, 2006 may elect to change the time or form of Distribution of the Prior Plan Account, according to procedures established by the Administrative Committee, if the Distribution change is made before December 31, 2006 and would not apply to amounts otherwise payable in 2006. If an Active Participant does not elect to change an existing Distribution election, the Prior Plan Account shall be distributed in the form previously selected by the Active Participant, following the Separation from Service or Disability. If an Active Participant does not have an existing Distribution election for the Prior Plan Account, payment of the Prior Plan Account will be made according to the applicable procedure for Distribution without a Distribution election set forth in (b) and (c) above.

Section 4.3 Survivor Benefits.

(a) Amount and Form. If the Participant dies before his Account Distribution begins, the Plan shall pay a Survivor Benefit equal to the value of the Participant’s Account balance, increased by the applicable Interest Rate on the unpaid Account balance during the period when Survivor Benefit payments are being made to the Participant’s Beneficiary. A Participant may elect the form of Survivor Benefit payments and the election will apply to his entire Account balance. A Participant may elect Survivor Benefits payable in a lump sum or monthly installments for five (5), ten (10) or fifteen (15) years in substantially equal payments of principal and interest. If the Participant has changed the Survivor Benefit election, the change shall not be effective until twelve (12) months after the date the change was made. If the Participant fails to elect a form of Survivor Benefit payments, the Participant’s Account balance shall be distributed in a lump sum as soon as practical following the Participant’s death.

If the Participant dies after his Account Distribution begins, any Survivor Benefit payment elected under this Plan shall not apply and the Participant’s Account balance shall continue to be paid to the Beneficiary in the benefit form that was payable to the Participant, until all remaining payments that would have been made to the Participant if the Participant had lived have been made. Payments shall be increased by the applicable Interest Rate credited on the deceased Participant’s unpaid Account balance during each year payment is made to the Beneficiary.

(b) Death Following Change in Control. If a Participant is entitled to a payment under Section 4.8 and dies before receiving his entire Account, the balance of the Participant’s Account shall be paid to Participant’s Beneficiary in a lump sum.

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Section 4.4 Early Distribution.

A Participant may elect to receive an Early Distribution from his Account subject to the following restrictions:

(a) Election. The election to take an Early Distribution for a particular Deferral Election must be made at the same time the Participant makes that Deferral Election.

(b) Amount. The amount which a Participant can elect to receive as an Early Distribution shall be the portion of the amounts deferred under a particular Deferral Election, as prescribed by the Administrative Committee before the Deferral Period. If a previously elected amount exceeds the related Account balance when an Early Distribution is to be made, only the Account balance will be paid.

(c) Time of Early Distribution. The Early Distribution shall begin at a time elected by the Participant when the Deferral Election was made and the date elected for an Early Distribution must be at least two (2) years after the Deferral Election becomes effective. If the Participant has a Separation from Service before the Early Distribution date, the Early Distribution election will be canceled and Distribution will be made under Section 4.2.

(d) Distributions from Account. Amounts paid to a Participant under this Section shall be treated as Distributions from the Participant’s Account.

Section 4.5 Financial Hardship Distribution.

(a) Financial Hardship Distribution. When the Administrative Committee finds that a Participant has suffered a Financial Hardship, following the Participant’s written application, the Administrative Committee shall distribute all or a portion of the Participant’s Account reasonably necessary to satisfy the Financial Hardship. The amount necessary to satisfy the Financial Hardship shall be the amount determined according to the requirements of Code Section 409A. The Distribution shall be paid in a lump sum as soon as administratively practical following the Financial Hardship finding.

(b) Review of the Request for Financial Hardship Distribution. Counsel for the Plan, on an ongoing basis, shall review legal and tax developments to assure continuous compliance with the relevant authorities governing plan design to prevent constructive receipt of taxable income by any Participant, and shall advise the Administrative Committee of the applicable law.

Section 4.6 Valuation and Settlement.

The Settlement Date shall be the earlier of the date when a lump sum is paid or when installment payments commence. The Settlement Date for a Distribution shall be no more than thirty (30) days after the last day of the month when the Participant or his Beneficiary

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becomes entitled to a Distribution, or six (6) months later, if the Participant is a Key Employee. The Settlement Date for an Early Distribution shall be the month that the Participant has elected to commence payment. The amount of a lump sum and the initial amount of installment payments for a Participant’s Account shall be based on the value of the Participant’s Account on the Valuation Date at the end of the immediately preceding month before the Settlement Date.

Section 4.7 Small Benefit.

Notwithstanding any Distribution Election, the Administrative Committee, in its sole discretion, may pay any benefit as a lump sum payment to the Participant or any Beneficiary, if the lump sum amount of the Account balance that remains in the Account, or which is payable to the Participant or Beneficiary in installments when payments to the Participant or Beneficiary would otherwise commence, is less than $10,000.

Section 4.8 Benefits On a Change in Control.

Notwithstanding any contrary Plan provisions, the provisions of this Section shall control on a Change in Control of the Company. On a Change in Control, as defined in Section 4.9, the full amount of contributions and earnings accrued or credited to the Participant’s Account (on the date immediately before the Change in Control) shall be distributed to the Participant or the Participant’s Beneficiary, if a Survivor Benefit is being paid when the Change in Control occurs. Payment shall be made in a lump sum form.

Section 4.9 Events Constituting a Change in Control.

For Plan purposes, a Change in Control shall be deemed to have occurred on the date that one or more of the following occurs:

(a) Individuals who, within any twelve (12) month period, constitute a majority of the Board (“Incumbent Directors”) are replaced as members of the Board by individuals who are not Incumbent Directors. Incumbent Directors shall include any individual becoming a director within the same twelve (12) month period when the person’s election or appointment was approved by a vote of at least a majority of the then Incumbent Directors and shall exclude for this purpose any individual whose initial assumption of office was not endorsed by a majority of the Board.

(b) The date of any merger, consolidation or recapitalization of the Company (or, if the capital stock of the Company is affected, any subsidiary of the Company), or any sale, lease, or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company (each of the foregoing being an “Acquisition Transaction”) where the shareholders of the Company immediately before that Acquisition Transaction would beneficially own, directly or indirectly, immediately after that Acquisition Transaction, shares or other ownership interests representing in the aggregate less than fifty percent (50%) of (i) the then outstanding common stock or other

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equity interests of the corporation or other entity surviving or resulting from such merger, consolidation or recapitalization or acquiring such assets of the Company, as the case may be, or of its ultimate parent corporation or other entity, if any (in either case, the “Surviving Entity”), and (ii) the Combined Voting Power of the then outstanding Voting Securities of the Surviving Entity.

(c) Any Person shall be or become the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing in the aggregate more than fifty percent (50%) of either (i) the then outstanding shares of common stock of the Company (“Common Shares”) or (ii) the Combined Voting Power of all then outstanding Voting Securities of the Company; provided, however, that notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for purposes of this Subsection (c):

(1) Solely as a result of an acquisition of securities by the Company which, by reducing the number of Common Shares or other Voting Securities outstanding, increases (A) the proportionate number of Common Shares beneficially owned by any Person to more than fifty percent (50%) of the Common Shares then outstanding, or (B) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to more than fifty percent (50%) of the Combined Voting Power of all then outstanding Voting Securities; or

(2) Solely as a result of an acquisition of securities directly from the Company, except for any conversion of a security that was not acquired directly from the Company;

(d) For purposes of this Change in Control definition, the following capitalized terms have the following meanings:

(i) “Affiliate” shall mean, as to a specified person, another person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person, within the meaning of such terms as used in Rule 405 under the Securities Act of 1933, as amended, or any successor rule.

(ii) “Combined Voting Power” shall mean the aggregate votes entitled to be cast generally in the election of the Board of Directors, or similar managing group, of a corporation or other entity by holders of the then outstanding Voting Securities of such corporation or other entity.

(iii) “Person” shall mean any individual, entity (including, without limitation, any corporation, partnership, trust, joint venture, association or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations thereunder); provided, however, that Person shall not include the Company, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established by the Company, LCR, or their subsidiaries for or pursuant to the terms of any plan.

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(iv) “Voting Securities” shall mean all securities of a corporation or other entity having the right under ordinary circumstances to vote in an election of the Board of Directors, or similar managing group, of such corporation or other entity.

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ARTICLE V

BENEFICIARY DESIGNATION

Section 5.1 Beneficiary Designation.

Each Participant has the right to designate a Beneficiary or Beneficiaries to receive his interest in his Account on his death. The designation shall be made in the time and manner the Administrative Committee prescribes. The Participant has the right to change or revoke any designation from time to time by filing a new designation or notice of revocation, and no notice to any Beneficiary nor consent by any Beneficiary shall be required to make any change or revocation.

Section 5.2 Failure to Designate a Beneficiary.

If a Participant fails to designate a Beneficiary before his death, or if no designated Beneficiary survives the Participant, the Administrative Committee shall direct the Company to pay his Account balance in a lump sum to the executor or administrator of his estate.

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ARTICLE VI

ADMINISTRATION

Section 6.1 Interpretation.

The Administrative Committee has the exclusive right and discretionary authority to interpret the Plan’s provisions and to decide questions arising in its administration. The Administrative Committee’s decisions and interpretations shall be final and binding on the Company, Participants, Employees and all other persons.

Section 6.2 Administrative Records.

The Administrative Committee shall keep records reflecting Plan administration, which the Company may audit.

Section 6.3 Claims.

If a Participant makes a written request alleging a right to receive Plan benefits or alleging a right to receive an adjustment in Plan benefits being paid, the Administrative Committee shall treat it as a benefit claim. All benefit claims under the Plan shall be sent to the Administrative Committee and must be received within thirty (30) days after Separation from Service. The decision will be made within ninety (90) days after the Administrative Committee receives the claim unless the Administrative Committee determines additional time due to special circumstances is needed. If the Administrative Committee determines that an extension to process a claim is required, the final decision may be deferred up to one hundred eighty (180) days after the claim is received, if the claimant is notified in writing of the need for the extension and the anticipated date of a final decision before the end of the initial ninety (90) day period.

If the Administrative Committee decides that any individual who has claimed a right to receive benefits, or different benefits, under the Plan is not entitled to receive all or any part of the benefits claimed, it will inform the claimant in writing or electronically, in terms calculated to be understood by the claimant, of the specific reasons for the denial, the Plan provisions on which the denial is based, a description of additional material or information necessary to perfect the claim and an explanation of why the material or information is needed, and an explanation of the Plan’s claim review procedures. If no action is taken on the claim within these time periods, the claim shall be deemed denied on the last day of the applicable time period. The claimant is entitled to a full and fair review of the denied claim after actual or constructive notice of a denial.

The claimant, or his authorized representative, must file a written request for review with the Administrative Committee setting forth the grounds for the request and any supporting facts, comments or arguments he wishes to make, within sixty (60) days after actual or constructive notice. If a written request for review is not received within this sixty (60) day period, the denial will be final. The claimant shall have reasonable access to all relevant documents pertaining to the claim.

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The Administrative Committee or the persons responsible to conduct the review on the Administrative Committee’s behalf shall conduct a full review of the claim. Unless special circumstances require an extension of the review period, the Administrative Committee will render its decision no later than the date of its next regularly scheduled meeting, unless the request is filed less than thirty (30) days before that meeting. If the request is filed less than thirty (30) days before a regularly scheduled meeting, the Administrative Committee will render its decision no later than the date of the second regularly scheduled meeting after it receives the request. However, if special circumstances require an extension of the review period, a final decision shall be rendered no later than the third regularly scheduled meeting after it receives the request for review, if the claimant is notified in writing of the special circumstances and the date of the expected decision, before the time is extended due to special circumstances. If the decision on review is not furnished to the claimant within the applicable time period(s), the claim shall be denied on the last day of the applicable period. Administrative Committee decisions shall be in writing and provided no later than five (5) days after the decision is made. The decision shall include specific reasons for the action taken, including the specific Plan provisions on which the decision is based. The claimant shall be notified of the right to reasonable access, on request, to relevant documents or other information without charge.

Section 6.4 Committee Liability.

No Administrative Committee member shall be liable for any action taken in good faith or for exercise of any power given the Administrative Committee, or for the actions of other Administrative Committee members.

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ARTICLE VII

AMENDMENT AND TERMINATION

Section 7.1 Plan Amendment.

This Plan may be amended from time to time by a resolution of the Compensation and Human Resources Committee of the Board of Directors of the Company.

Section 7.2 Termination.

The Company intends to continue this Plan indefinitely, but reserves the right to terminate it at any time for any reason.

Section 7.3 Effect of Amendment or Termination.

No Plan amendment or termination may adversely affect the benefit payable to any Participant receiving or entitled to receive Plan benefits before the effective date of the amendment or termination. However, the Company may amend the Plan to eliminate any form of payment or to comply with any law or regulation, including but not limited to, reformation of any Plan provision that would result in an excise tax being imposed under Code Section 409A, and if so, that amendment or reformation will not be deemed to adversely affect any Participant’s benefit entitlement.

Section 7.4 Effect of Legislation.

If any Plan provision would result in imposition of an excise tax under Code Section 409A, the terms of Code Section 409A shall apply and that Plan provision will be reformed to avoid the excise tax.

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ARTICLE VIII

MISCELLANEOUS

Section 8.1 Unfunded Benefit Plan.

This Plan is intended to constitute an unfunded plan which is maintained primarily to provide deferred compensation in the form of additional benefits to a select group of management or highly compensated employees, as defined in ERISA Sections 201(a)(2), 301(a)(3) and 401(a)(1).

Section 8.2 Unsecured General Creditor.

Participants and their Beneficiaries shall have no legal or equitable rights, claims or interests in any specific Company assets or property, nor are they the Beneficiaries of, or have any rights, claims or interests in, any life insurance policies, annuity contracts, or the proceeds of those policies or contracts which the Company owns or acquires (“Policies”). Any Policies or other Company assets shall be and shall remain general, unpledged, unrestricted Company assets. The Company’s obligation under the Plan is merely an unfunded and unsecured Company promise to pay money in the future.

Section 8.3 Grantor Trust.

Although the Company is responsible for all Plan benefits, the Company, in its discretion, may contribute funds to a grantor trust, as it deems appropriate, to pay Plan benefits. The trust may be irrevocable, but trust assets shall be subject to the claims of creditors of Lyondell Chemical Company. To the extent any Plan benefits are actually paid from the trust, the Company shall have no further obligation for those benefits, but to the extent the benefit is not paid, benefits shall remain the obligation of, and shall be paid by, the Company. Participants shall be unsecured creditors insofar as their legal claim for Plan benefits and Participants shall have no security interest in the grantor trust.

Section 8.4 Non-Assignment.

Payments to and benefits under this Plan are not assignable, transferable or subject to alienation since they are primarily for the support and maintenance of the Participants and their Beneficiaries. Likewise, payments shall not be subject to attachments by creditors of, or through legal process against, the Company, the Administrative Committee or any Participant. Payments may be offset by the Company as provided under Section 8.7.

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Section 8.5 No Employment Right.

The Plan provisions shall not give an Employee the right to be retained in Company service nor shall this Plan or any action taken under it be construed as an employment contract.

Section 8.6 Adjustments.

At the Company’s request, the Administrative Committee may adjust a Participant’s Plan benefit or make other adjustments required to correct administrative errors or provide uniform treatment of Participants, in a manner consistent with the Plan’s intent and purpose.

Section 8.7 Obligation to Company.

If a Participant becomes entitled to a Distribution of Plan benefits and the Participant has any debt, obligation, or other liability representing an amount owed to the Company or any Company benefit plan, then the Administrative Committee, in its sole discretion, may offset the amount owed to the Company or the benefit plan against the amount of benefits otherwise distributable under this Plan.

Section 8.8 Protective Provisions.

Each Participant shall cooperate with the Company by furnishing any and all information the Company requests to facilitate Plan benefit payments, taking any physical examinations the Company deems necessary and taking other relevant action as the Company requests. If a Participant refuses to cooperate, the Company shall have no further obligation to the Participant under the Plan. If the Participant makes any material misstatement of information or nondisclosure of medical history, no benefits will be payable to the Participant or his Beneficiary unless, at the Company’s sole discretion, benefits are payable in an amount reduced to compensate the Company for any loss, cost, damage or expense suffered or incurred by the Company as a result in any way of any Participant action, misstatement or nondisclosure.

Section 8.9 Gender, Singular and Plural.

All pronouns and any variations are deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons requires. The singular may be read as the plural and the plural as the singular, as the context may require.

Section 8.10 Governing Law.

This Plan shall be construed, regulated and administered under the laws of the State of Texas, except to the extent that those laws are preempted by ERISA.

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Section 8.11 Notice.

Any notice or filing required or permitted to be given to the Administrative Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Company’s principal office, directed to the attention of the Secretary of the Administrative Committee. Notice shall be deemed given on the delivery date or, if delivery is made by mail, on the date shown on the postmark on the receipt for registration or certification.

Section 8.12 Successors and Assigns.

This Plan shall be binding on the Company and its successors and assigns.

Section 8.13 Incapacity.

If the Administrative Committee deems any person entitled to receive any Plan payment is incapable of receiving or disbursing the payment because of minority, illness or infirmity, mental incompetency, or incapacity of any kind, the Administrative Committee, in its sole discretion, may take any one or more of the following actions: it may apply the payment directly for the person’s comfort, support and maintenance; it may reimburse any person for any support supplied to the person entitled to receive any payment; or it may pay any other person the Administrative Committee selects to disburse the payment for the person’s comfort, support and maintenance, including, without limit, to any relative who has undertaken, wholly or partially, the expense of the person’s comfort, care and maintenance, or any institution in whose care or custody the person entitled to the payment may be. The Administrative Committee, in its sole discretion, may deposit any payment due to a minor to the minor’s credit in any savings or commercial bank of the Administrative Committee’s choice.

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EX-10.9

Exhibit 10.9

INSTRUMENT AMENDING

LYONDELL CHEMICAL COMPANY

SUPPLEMENTAL EXECUTIVE BENEFIT PLANS

TRUST AGREEMENT

Lyondell Chemical Company hereby amends, effective February 23, 2006, the Lyondell Chemical Company Supplemental Executive Benefit Plans Trust Agreement, as follows:

Section 3, Change in Control, Section 3.2., “Definition of Change in Control” is revised in its entirety to read as follows:

Section 3.2. Definition of “Change in Control”. For purposes of this Trust Agreement, a “Change in Control” shall be deemed to occur on the date that one or more of the following occurs:

(i) Individuals who constitute the entire Board on the date of this amendment (“Incumbent Directors”) then cease to constitute at least a Board majority for any reason; provided, however, that any individual after the date of this amendment also shall be considered an Incumbent Director if the individual’s election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the then Incumbent Directors, but an individual shall not be considered an Incumbent Director if the individual’s initial assumption of office occurs as a result of either an actual or threatened election contest, as those terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as amended, or as a result of other actual or threatened solicitation of proxies or consents by or on behalf of any Person (as defined below) other than the Board;

(ii) The consummation of any merger, consolidation, amalgamation, reorganization, share exchange or recapitalization of the Company (or, if the Company’s capital stock is affected, any Company subsidiary), or any sale, lease, exchange or other transfer (in one transaction of a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the Company’s assets (each of the foregoing being an “Acquisition Transaction”) where:

(1) the Company’s shareholders immediately before that Acquisition Transaction do not beneficially own, directly or indirectly, immediately after that Acquisition Transaction shares or other ownership interests representing in the aggregate fifty percent (50%) or more of (a) the then outstanding common stock or other equity interests of the corporation or other entity surviving or resulting from the merger, consolidation, amalgamation, reorganization, share exchange or recapitalization or

acquiring such assets of the Company, as the case may be, or of its ultimate parent corporation or other entity, if any (the “Surviving Entity”), and (b) the Combined Voting Power of the Surviving Entity’s then outstanding Voting Securities, or

(2) the Incumbent Directors who initially approved the Acquisition Transaction do not constitute a majority of the Board of Directors, or similar managing group, of the Surviving Entity immediately after that Acquisition Transaction, or

(3) any Person directly or indirectly becomes the Beneficial Owner of the Surviving Entity’s securities representing, in the aggregate, more than twenty percent (20%) of either (A) the Surviving Entity’s then outstanding shares of common stock (“Common Shares”) or (B) the Combined Voting Power of all the Surviving Entity’s then outstanding Voting Securities, and that Person’s direct or indirect Beneficial Ownership of the Combined Voting Power of the outstanding Voting Securities of the Surviving Entity immediately after the Acquisition Transaction is more than five percentage points greater than that Person’s Beneficial Ownership in the Combined Voting Power of the outstanding Voting Securities of the Company immediately before the Acquisition Transaction was initially approved;

(iii) The Company’s stockholders approve any plan or proposal to liquidate or dissolve the Company; or

(iv) Any Person becomes, directly or indirectly, the Beneficial Owner, of Company securities representing, in the aggregate, more than twenty percent (20%) of either (A) the then outstanding Common Shares or (B) the Combined Voting Power of all of the Company’s then outstanding Voting Securities; provided, however, that notwithstanding the foregoing, no change in Control shall be deemed to occur under this Subsection (iv):

(1) Solely as a result of the Company acquiring securities in an transaction that reduces the outstanding number of Common Shares or other Voting Securities and thereby increases (a) the proportion of Common Shares beneficially owned by any Person to more than twenty percent (20%) of the then outstanding Common Shares, or (b) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to more than twenty percent (20%) of the Combined Voting Power of all then outstanding Voting Securities;

(2) Solely as a result of a Person acquiring securities directly from the Company, excluding any conversion of a security not acquired directly from the Company;

provided, further, that a Change in Control shall be deemed to occur if any Person referred to in paragraph (1) or (2) of this Subsection (iv) thereafter becomes the Beneficial Owner of additional shares or other ownership interests representing one percent (1%) or more of the Company’s outstanding Common Shares or one percent (1%) or more of the Combined Voting Power (other than as a result of (x) a stock split, stock dividend or similar transaction or (y) an event described in paragraph (1) or (2) of this Subsection (iv)).

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(v) For purposes of this Change in Control definition, the following capitalized terms have the following meanings:

(1) “Affiliate” means, as to a specified person, another person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person, within the meaning of terms used in Rule 405 under the Securities Act of 1933, as amended, or any successor rule.

(2) “Beneficial Owner” has the meaning set forth in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended.

(3) “Combined Voting Power” means the aggregate votes entitled to be cast generally by holders of then outstanding Voting Securities of a corporation or other entity to elect the Board of Directors, or similar managing group, of that corporation or entity.

(4) “Person” means any individual, entity (including, without limit, any corporation, partnership, trust, joint venture, association or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations thereunder); provided, however, that Person excludes the Company, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established for or under the terms of any employee benefit plan by the Company, LCR, or their subsidiaries.

(5) “Voting Securities” means all securities of a corporation or other entity with the right, under ordinary circumstances, to vote to elect the Board of Directors or similar managing group of that corporation or other entity.

IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this instrument on this 23^rd day of February, 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ JoAnn L. Beck	BY:	/s/ Allen C. Holmes
	Assistant Secretary		Allen C. Holmes
			Vice President and Chairman,
			Benefits Administrative Committee

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EX-10.12

Exhibit 10.12

INSTRUMENT AMENDING

LYONDELL CHEMICAL COMPANY

ELECTIVE DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS

LYONDELL CHEMICAL COMPANY hereby amends, effective February 23, 2006, the Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors, (“Plan”) applicable to deferrals before 2005, to merge the Plan into the 2005 Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors, (“Elective Deferral Plan”). The Elective Deferral Plan shall be the surviving plan and its terms shall apply to all deferral accounts now held under the Elective Deferral Plan as a result of the merger.

IN WITNESS WHEREOF, LYONDELL CHEMICAL COMPANY, acting by and through its duly authorized officer, has caused this Instrument to be executed on this 23rd day of February, 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ Janna Sewell	BY:	/s/ Dan F. Smith
	Assistant Secretary		Dan F. Smith
			President and Chief Executive Officer

INSTRUMENT

AMENDING AND RESTATING

LYONDELL CHEMICAL COMPANY

ELECTIVE DEFERRAL PLAN FOR

NON-EMPLOYEE DIRECTORS

Lyondell Chemical Company hereby amends and restates the Elective Deferral Plan for Non-Employee Directors, effective as of February 23, 2006, to read in its entirety as the document entitled “Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors” that is attached hereto.

IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this Instrument on this 23rd day of February, 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ Janna Sewell	BY:	/s/ Dan F. Smith
	Assistant Secretary		Dan F. Smith
			President and Chief Executive Officer

Lyondell Chemical Company

ELECTIVE DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS

Amended and Restated, February 23, 2006

ARTICLE I

GENERAL PROVISIONS

Section 1.1 Purpose and Intent of Plan.

This Plan is intended to provide an opportunity for Directors who are not Company employees to accumulate supplemental funds for retirement or special needs before retirement through the deferral of portions of their Retainer Fee.

This Plan replaces the deferral provisions of the Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors for amounts deferred before 2005 (“Prior Plan”) to conform to the requirements of Code Section 409A and any related regulation or other guidance promulgated by applicable government agencies (“Code Section 409A”) and establishes the provisions of this Plan to apply to all deferrals of compensation earned or accrued in 2005 and thereafter. Effective February 23, 2006, the Prior Plan was merged into this Plan and the terms of this Plan shall govern all amounts deferred before 2005 and associated earnings.

Section 1.2 Effective Date of Plan.

This Plan document generally shall be effective January 1, 2005, unless certain provisions specify that they are effective on a different date.

Section 1.3 Definitions

(a) Account means a separate bookkeeping account maintained by the Company for each Participant which measures and determines the amounts to be paid to the Participant under the Plan from January 1, 2005 forward. An Account may be divided into subaccounts as needed to reflect particular Deferral Elections.

(b) Administrative Committee means a committee of independent directors designated by the Board.

(c) Beneficiary means a person entitled to receive a Participant’s Plan interest when the Participant’s dies before his Account is totally distributed.

(d) Board means the Board of Directors of Lyondell Chemical Company.

(e) Board Committee means any committee established by the Board which consists of Directors and which reports to the Board.

(f) Chairman Fee means the annual cash amount payable to a Director as additional compensation for serving as Chairman of the Board or as Chairman of a Board Committee.

(g) Change in Control shall be deemed to have occurred on the date that one or more of the following occurs:

(i) Individuals who, within any twelve (12) month period, constitute a majority of the Board (“Incumbent Directors”) are replaced as members of the Board by individuals who are not Incumbent Directors. Incumbent Directors shall include any individual becoming a director within the same twelve (12) month period when the person’s election or appointment was approved by a vote of at least a majority of the then Incumbent Directors and shall exclude for this purpose any individual whose initial assumption of office was not endorsed by a majority of the Board,

(ii) The date of any merger, consolidation or recapitalization of the Company (or, if the capital stock of the Company is affected, any subsidiary of the Company), or any sale, lease, or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company (each of the foregoing being an “Acquisition Transaction”) where the shareholders of the Company immediately before that Acquisition Transaction would beneficially own, directly or indirectly, immediately after that Acquisition Transaction, shares or other ownership interests representing in the aggregate less than fifty percent (50%) of (a) the then outstanding common stock or other equity interests of the corporation or other entity surviving or resulting from the merger, consolidation or recapitalization or acquiring assets of the Company, as the case may be, or of its ultimate parent corporation or other entity, if any (in either case, the “Surviving Entity”), and (b) the Combined Voting Power of the then outstanding Voting Securities of the Surviving Entity; or

(iii) Any Person shall be or become the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing in the aggregate more than fifty percent (50%) of either (A) the then outstanding shares of common stock of the Company (“Common Shares”) or (B) the Combined Voting Power of all then outstanding Voting Securities of the Company; provided, however, that notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for purposes of this Subsection (iii):

(1) Solely as a result of an acquisition of securities by the Company which, by reducing the number of Common Shares or other Voting Securities outstanding, increases (a) the proportionate number of Common Shares beneficially owned by any Person to more than fifty percent (50%) of the Common Shares then outstanding, or (b) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to more than fifty percent (50%) of the Combined Voting Power of all then outstanding Voting Securities;

(2) Solely as a result of an acquisition of securities directly from the Company, except for any conversion of a security that was not acquired directly from the Company;

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(iv) For purposes of this Change in Control definition, the following capitalized terms have the following meanings:

(1) “Affiliate” shall mean, as to a specified person, another person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person, within the meaning of such terms as used in Rule 405 under the Securities Act of 1933, as amended, or any successor rule.

(2) “Combined Voting Power” shall mean the aggregate votes entitled to be cast generally in the election of the Board of Directors, or similar managing group, of a corporation or other entity by holders of then outstanding Voting Securities of such corporation or other entity.

(3) “Person” shall mean any individual, entity (including, without limit, any corporation, partnership, trust, joint venture, association or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations thereunder); provided, however, that Person shall not include the Company, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established by the Company, LCR, or their subsidiaries for or pursuant to the terms of any plan.

(4) “Voting Securities” shall mean all securities of a corporation or other entity having the right under ordinary circumstances to vote in an election of the Board of Directors, or similar managing group, of such corporation or other entity.

(h) Code means the Internal Revenue Code of 1986, as amended, including any successor provisions and any regulations or other guidance promulgated by applicable government agencies.

(i) Common Stock means the Company’s common stock, par value $1.00 per share.

(j) Company means Lyondell Chemical Company, a Delaware corporation, or its successor.

(k) Deferral Election means a Director’s election to defer Retainer Fees during a Deferral Period according to Section 2.1.

(l) Deferral Period means the particular calendar year for which a Deferral Election is made. A new Deferral Period begins each January 1 and ends each December 31, but for a new Director, his or her initial Deferral Period shall commence thirty (30) days after the Director’s election to the Board.

(m) Deferred Compensation means the aggregate amount of Retainer Fees a Director elects to defer and DSUs credited to the Participant’s Account.

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(n) Deferred Stock Units or DSUs means a bookkeeping unit representing the value of one share of Common Stock used to credit certain deferrals to a Participant’s account and track investment returns.

(o) Director means a Director of the Board who is not a current employee of the Company or any of its subsidiaries or affiliates.

(p) Distribution means a distribution of a Participant’s Account as a result of Termination of Service or other event specified under this Plan and permitted by Code Section 409A.

(q) Effective Date means January 1, 2005.

(r) Financial Hardship means a condition of severe financial difficulty, due to an unforeseeable emergency resulting from (i) an illness or accident of the Participant, his spouse or dependent; (ii) a casualty causing a Participant’s property loss; or (iii) other similar or extraordinary and unforeseeable circumstances created by events beyond the Participant’s control, as determined by the Administrative Committee, upon advice of counsel, based on written information supplied by the Participant and which is sufficient, in counsel’s judgment, to justify a change in a Plan distribution election without causing the Participant or any other Plan Participant to receive taxable income from the Plan before the Participant actually receives his or her benefit.

(s) In-Service Distribution means a distribution before Termination of Service as specified in Section 4.4 and permitted by Code Section 409A.

(t) Interest Rate means (i) prior to January 1, 2006, 125 percent of the rolling average Ten-Year Treasury Note Rate, on October 1 before the applicable Plan Year begins, and (ii) for each Plan Year commencing on or after January 1, 2006, the previous monthly average of the closing yield to maturity, as reported by Bloomberg, of Lyondell Chemical Company’s most junior publicly traded debt on December 1 of the prior Plan Year. If this debt is retired during the Plan Year, the monthly interest rate shall be based on the previous monthly average of the then longest maturity for the Company’s most junior publicly traded debt.

(u) Participant means any Director participating in this Plan under Article II, or any former Director who has not received the entire Plan benefit to which he or she is entitled.

(v) Plan means this Elective Deferral Plan for Non-Employee Directors.

(w) Plan Year means each calendar year beginning on January 1 and ending on December 31.

(x) Prior Plan Account means the amounts deferred under the Prior Plan, and associated earnings, which were transferred to this Plan February 23, 2006.

(y) Retainer Fee means the annual amount paid in cash to a Director as compensation for serving in that capacity and any additional Chairman Fees.

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(z) Survivor Benefit means the benefits described in Section 4.3 provided when a Participant dies before his or her Account is distributed.

(aa) Termination of Service means the Director ceasing to be a Board member, which complies with the requirements of Code Section 409A.

(bb) Trust Agreement means the Lyondell Chemical Company Non-Employee Directors Benefit Plans Trust Agreement and any amendments or successor agreements.

(cc) Valuation Date means the last day of each month, or other dates Administrative Committee determines in its discretion, which may be either more or less frequent, used to value Participants’ Accounts.

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ARTICLE II

PARTICIPATION AND DEFERRAL ELECTIONS

Section 2.1 Elective Deferrals.

A Director may elect to defer Retainer Fees and specify the desired form of crediting method under Section 3.5 before a Deferral Period begins by submitting a Deferral Election for the Deferral Period. The time and form or distribution of the amount deferred shall be elected at the time the Deferral Election is made. Each Director’s Deferral Election shall be irrevocable after the Deferral Period begins. A Participant may also elect to defer an In-Service Distribution as provided in Section 4.4.

Section 2.2 Deferral Limits.

Deferral Elections shall be subject to the following limits:

(a) A Participant must defer a minimum deferral amount reasonably anticipated to exceed Eight Thousand Dollars ($8,000) per Deferral Period.

(b) A Participant may not defer an amount exceeding one hundred (100%) of the Participant’s Retainer Fee that would otherwise be payable in cash for that Deferral Period.

Section 2.3 Termination of Service.

Any outstanding Deferral Election shall terminate on the Participant’s Termination of Service.

Section 2.4 Modification of Deferral Elections.

The Administrative Committee may permit a Participant to cease the remaining deferrals under a Deferral Election, if it finds that the Participant has suffered a Financial Hardship, to the extent that the Deferral Election may be revoked as a result of Financial Hardship under Code Section 409A.

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ARTICLE III

DEFERRED COMPENSATION ACCOUNTS

Section 3.1 Accounts.

Accounts shall be maintained for each Participant for record-keeping purposes only. A Participant’s Account may be divided into subaccounts if necessary to determine how a Participant’s Distribution Elections shall apply to portions of the Account.

Section 3.2 Deferred Compensation.

A Participant’s Deferred Compensation shall be credited to the Participant’s Account on the date when the corresponding non-deferred portion of compensation is paid or would have been paid but for the Deferral Election.

(a) New Directors. A person who becomes a Director after January 1 of a Plan Year shall be eligible to make a Deferral Election within thirty (30) days of the date he becomes a Director for the pro-rated Retainer Fee payable for service during that Plan Year.

(b) Tax Withholding. The Company shall have the right to withhold from any Retainer Fees or Plan benefits (or otherwise cause the Director, his Beneficiary or the executor or administrator of his estate to pay) any federal, state, local or foreign taxes required to be withheld for any Deferred Compensation or benefits paid by the Plan, including, but not limited to, Medicare taxes.

Section 3.3 Deferred Stock Units.

(a) DSU Valuation. DSUs allocated to a Participant’s Account during a Plan Year for any reason other than a dividend payment, and DSUs transferred into the cash portion of a Participant’s Account according to a crediting method election change under Section 3.5, shall be valued at the closing price per share of Common Stock on the last trading date of the prior Plan Year.

(b) Dividends. When dividends are paid on shares of Common Stock, a Participant’s Account which has been credited with DSUs also shall be credited on the dividend record date with an additional number of DSUs equal to (A) the total amount of dividends payable for the number of shares of Common Stock represented by the DSUs credited to the Participant’s Account, divided by (B) the closing price per share of Common Stock on the dividend record date.

Section 3.4 Interest Rate.

Except as provided in Section 4.8, the cash portion of the Accounts shall be credited with interest at the applicable Interest Rate, compounded monthly during each Plan Year before the full distribution of the Participant’s Account. Interest shall be credited monthly on the cash portion of the balance of the Account on each Valuation Date beginning on the date when Deferred Compensation is credited to the Account.

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Section 3.5 Election of Crediting Method.

Once each Plan Year, a Participant may elect, prospectively, to have the balance credited to his Account allocated between DSUs and cash, and the corresponding crediting methods in Sections 3.3 and 3.4 will apply to the election. Elections will be effective the first day of the following Plan Year. Deferral elections shall specify the initial form of crediting Deferred Compensation.

Section 3.6 Account Value

A Participant’s Account on each Valuation Date shall consist of the balance of the Participant’s Account on the immediately preceding Valuation Date, plus the amount of the Participant’s Deferred Compensation (in both cash and DSUs) since that Valuation Date, plus interest and dividend-derived DSUs credited to the Account, minus any distributions from or reductions to the Account since the immediately preceding Valuation Date.

Section 3.7 Vesting

Each Participant shall be one hundred percent (100%) vested at all times in the amounts credited to his or her Account.

Section 3.8 Account Statement.

The Company shall provide each Participant with a statement of his or her Account balance at least annually.

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ARTICLE IV

PLAN BENEFITS

Section 4.1 Plan Benefit.

A Participant’s Plan benefit shall equal the amount of his or her Account, determined according to Sections 3.6 and 4.6. DSUs credited to a Participant’s Account shall be paid in cash based on the closing price of a share of Common Stock on the most recent Valuation Date. Interest is payable on a Participant’s Account balance until the Account is fully distributed.

Section 4.2 Distribution Elections.

(a) Time and Form of Distribution. If the Participant becomes entitled to a distribution due to Termination of Service, distribution shall be made at the time and form specified in the applicable Deferral Elections, except as provided in (d)(2) below. A Participant may elect one or more of the following forms and commencement dates for all or a portion of his Deferral Account.

(1) Lump Sum. A single payment of all of the Participant’s amount deferred under a Deferral Election.

(2) Installment Payments. Monthly installment payments for five (5) years, ten (10) years or fifteen (15) years of the amount deferred under a Deferral Election, in substantially equal payments of principal and interest. The amount of each monthly installment shall be recalculated effective January 1 of each year, based on the remaining balance subject to the installment payment election and the remaining number of installment payments.

Notwithstanding the foregoing, a Participant’s Account may be distributed earlier under Plan terms due to death or Financial Hardship, as provided in Sections 4.3 and 4.5, or for other reasons as may be provided under Code Section 409A.

(b) Failure to Make a Distribution Election. If the Participant fails to make a distribution election for a Prior Plan Account or an amount deferred for a particular Deferral Period, the Prior Plan Account or that portion of the Participant’s Account balance will be distributed immediately in lump sum cash payment as soon as administratively possible, but no later than thirty (30) days following Termination of Service.

(c) Change in Time or Form of Distribution. A Participant may elect to change the form of a Plan distribution, but (1) the election may not become effective until at least twelve (12) months after the date the new distribution election is made, (2) the election must defer payment for a period of five (5) years after the original distribution date and (3) the new distribution election must be made at least twelve (12) months before the date the original distribution was scheduled to occur.

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(d) Special Distribution Election Rules.

(1) A Participant who made a Deferral Election for the Deferral Period beginning on January 1, 2005 (“2005 Deferral Election”) may elect to change the distribution of the amount deferred under the 2005 Deferral Election, if the distribution change is made before December 31, 2005.

(2) A Participant who is not eligible for a distribution in 2006 may elect to change the distribution of a Prior Plan Account, if the distribution change is made before December 31, 2006. If a Participant does not elect to change an existing distribution election, the Participant’s Prior Plan Account shall be distributed in the form previously selected by the Participant for the Prior Plan Account following the Participant’s Termination of Service. If a Participant does not have an existing distribution election for the Prior Plan Account, the Prior Plan Account will be paid according to (b) above.

Section 4.3 Survivor Benefits.

(a) Death Before Account Distribution. If the Participant dies before his or her Account distribution begins, the Plan shall pay a Survivor Benefit equal to the value of the Participant’s Account, determined according to Sections 3.6 and 4.6, increased by the applicable Interest Rate on the unpaid Account balance during the period when Survivor Benefit payments are being made to the Participant’s Beneficiary.

The Survivor Benefit shall be paid in a lump sum cash payment unless the Participant elected to have the Participant’s Account balance distributed in installment payments. A Participant may elect to have the Survivor Benefit paid to the Participant’s Beneficiary in substantially equal monthly cash payments over five (5) years, ten (10) years or fifteen (15) years. The amount of each of the monthly installments shall be recalculated effective January 1 of each year, based on the remaining Account balance.

(b) Death After Account Distribution. If a Participant who is receiving installment payments dies after his or her Account distribution begins, any Survivor Benefit elected under this Plan shall not apply and the Participant’s Account balance shall continue to be paid to the Beneficiary in the benefit form that was payable to the Participant, until all remaining payments that would have been made to the Participant if the Participant had lived, have been made. Payments shall be increased by the applicable Interest Rate credited on the deceased Participant’s unpaid Account balance during each year payment is made to the Beneficiary.

(c) Election Change. A Participant may change his Survivor Benefit at any time, but the change shall not be effective until twelve (12) months after the date the election was made. If the Participant fails to elect a form of Survivor Benefit payments, the Participant’s Account balance shall be distributed in a lump sum payment as soon as practical following the Participant’s death.

(d) Death Following Change in Control. If a Participant is entitled to a payment under Section 4.8 and dies before receiving his entire Account, the balance of the Participant’s Account shall be paid to Participant’s Beneficiary in a lump sum cash payment.

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Section 4.4 In-Service Distributions.

A Participant may elect to receive an In-Service Distribution from his or her Account subject to the following restrictions:

(a) Election. The election to take an In-Service Distribution for a particular Deferral Election must be made at the same time the Participant makes that Deferral Election.

(b) Amount. A Participant may elect to receive an In-Service Distribution equal to the amount the Participant deferred under a particular Deferral Election. If a previously elected amount exceeds the related Account balance when an In-Service Distribution is to be made, only the Account balance will be paid.

(c) Timing of In-Service Distribution. The In-Service Distribution shall be made in cash and shall begin at the time elected by the Participant when the Deferral Election was made. If the Participant has a Termination of Service before the In-Service Distribution date, the In-Service Distribution will be canceled and distribution will be made under Section 4.2. The date elected for an In-Service Distribution shall be at least two (2) years after the Deferral Election becomes effective.

(d) Distributions from Account. Amounts paid to a Participant under this Section 4.4 shall be treated as distributions from the Participant’s Account.

Section 4.5 Financial Hardship Distributions.

When the Administrative Committee finds that a Participant has suffered a Financial Hardship, following the Participant’s written application, the Administrative Committee shall distribute all or a portion of the Participant’s Account reasonably necessary to satisfy the Financial Hardship. The amount necessary to satisfy the Financial Hardship shall be the amount determined according to the requirements of Code Section 409A. The distribution shall be paid in a lump sum as soon as administratively practical following the Financial Hardship finding.

Section 4.6 Valuation and Settlement.

The Settlement Date shall be the earlier of the date when a lump sum is paid or when installment payments commence. The Settlement Date shall be no more than thirty (30) days after the last day of the month when the Participant or his Beneficiary becomes entitled to a Distribution. The Settlement Date for an In-Service Distribution shall be the month when the Participant elects to commence payment. The amount of a lump sum and the initial amount of installment payments shall be based on the Participant’s Account value on the Valuation Date immediately before the Settlement Date.

Section 4.7 Small Benefit.

Notwithstanding any Distribution election, the Company, in its sole discretion, may pay any benefit as a lump sum cash payment to the Participant or any Beneficiary, if the value of the Account balance that remains or the which is payable to the Participant or Beneficiary in installments when payments would otherwise commence, is less than $10,000.

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Section 4.8 Change in Control.

Notwithstanding any contrary Plan provision, the provisions of this Section shall control on a Change in Control of the Company. If a Change in Control occurs, the full amount of contributions and earnings accrued or credited to the Participant’s Account (either as cash amounts or as DSUs) on the date immediately before the Change in Control, shall be distributed in cash to the Participant or the Participant’s Beneficiary, if a Survivor Benefit is being paid to a Beneficiary at Change in Control. Payment shall be made in a lump sum form.

Section 4.9 Combined Gross-up Payment; Tax Defense.

(a) Combined Gross-up Payment. If a Participant becomes entitled to one or more payments (including, without limit, the vesting of an option or other non-cash benefit or property) under the terms of any Company plan, arrangement or agreement (the “Total Payments”), which are or become subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any similar tax that may be imposed) (the “Excise Tax”), the Company shall pay the Participant an additional cash amount (the “Combined Gross-up Payment”) so the net amount the Participant retains after reduction for (i) any Excise Tax on the Total Payments and (ii) any federal, state and local income or employment tax and Excise Tax payable for the Combined Gross-up Payment, shall equal the Total Payments. To determine the Combined Gross-up Payment amount, a Participant shall be deemed (i) to pay federal income taxes at the highest stated rate of federal income tax (including surtaxes, if any) for the calendar year when the Combined Gross up Payment is to be made; and (ii) to pay any applicable state and local income taxes at the highest stated rate of taxation (including surtaxes, if any) for the calendar year when the Combined Gross-up Payment is to be made. Any Combined Gross-up Payment shall be made to the Participant at the same time any Total Payment subject to the Excise Tax is paid or deemed received by the Participant. The Combined Gross-up Payment shall not be paid under this Plan if a Combined Gross-up Payment identical to or greater than the amount calculated under this Section 4.9 is paid under any other Company plan, arrangement or agreement.

(b) Tax Defense. If, in connection with the examination of a Participant’s tax return, the Internal Revenue Service asserts that any amount payable or benefit provided under this Plan is a “parachute payment” as defined in the Code, and the amount or benefit was not treated as a parachute payment to determine a Combined Gross-up Payment, the Company at its cost shall assume the defense of any controversy involving the issue and shall indemnify and hold the Participant harmless for all liabilities, costs, taxes, interest and penalties attributable to the issue and, to the extent necessary (without duplication), shall increase the Combined Gross-up Payment to give effect to any additional amount or benefit determined to be a parachute payment. The Participant shall cooperate with the Company so the Company will be able to challenge any adverse Internal Revenue Service determination through administrative proceedings and, if determined by the Company, through litigation.

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ARTICLE V

BENEFICIARY DESIGNATION

Section 5.1 Beneficiary Designation.

Each Participant shall have the right to designate a Beneficiary or Beneficiaries to receive his or her Account on his or her death. The designation shall be in a form provided by and delivered to the Company. The Participant shall have the right to change or revoke any designation from time to time by filing a new designation or notice of revocation with the Company. No notice to or consent by any Beneficiary shall be required for any change or revocation.

Section 5.2 Failure to Designate Beneficiary.

If a Participant fails to designate a Beneficiary before his or her death, or if no designated Beneficiary survives the Participant, the balance in the Participant’s Account shall be paid in a lump sum cash payment to the executor or administrator for his or her estate.

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ARTICLE VI

ADMINISTRATION

Section 6.1 Interpretation.

The Administrative Committee shall have the exclusive right and discretionary authority to interpret Plan provisions and to decide questions arising in its administration. The Administrative Committee’s decisions and interpretations shall be final and binding on the Company, Participants, Directors, Beneficiaries and all other persons.

Section 6.2 Administrative Records.

Records reflecting Plan administration shall be kept.

Section 6.3 Claims.

The Administrative Committee shall provide adequate notice in writing to any Participant, Director or Beneficiary whose claim for Plan benefits has been denied, setting forth the specific reasons for the denial. The Participant, Director or Beneficiary will be given an opportunity to request a review of the decision denying the claim. The Participant, Director or Beneficiary shall be given sixty (60) days from the date of the notice denying any claim to request a review. If a written request for a review is not received within this sixty (60) day period, the denial will be final. The Board or the person or entity delegated responsibility to review the claim on the Board’s behalf, shall conduct a full and fair review of the claim. A decision on review shall be in writing and shall include specific reasons for the decision.

Section 6.4 Liability.

No Administrative Committee member shall be liable for any action taken in good faith or exercise of any Administrative Committee power or for the actions of other Administrative Committee members.

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ARTICLE VII

AMENDMENT AND TERMINATION

Section 7.1 Plan Amendment.

This Plan may be amended from time to time by the Administrative Committee..

Section 7.2 Termination.

The Company intends to continue this Plan indefinitely, but reserves the right to terminate it at any time. If a Change in Control occurs, this Plan shall be terminated following distribution of assets to Participants or to the Independent Plan Administrator under the Trust Agreement.

Section 7.3 Effect of Amendment or Termination.

No Plan amendment or termination Plan may adversely affect the benefit payable to any Participant or Beneficiary receiving or entitled to receive Plan benefits before the effective date of the amendment or termination. However, the Board may amend the Plan to eliminate any form of payment or to comply with any law or regulation, including, but not limited to, reformation of any Plan provision that would result in the imposition of an excise tax under Code Section 409A, and if so, that amendment or reformation will not be deemed to adversely affect any Participant’s benefit entitlement.

No Plan amendment or termination due to a Change in Control shall adversely affect the amount of contributions and earnings accrued or credited to any former or current Participant’s Account immediately before the Change in Control.

Section 7.4 Effect of Legislation.

If any Plan provision would result in the imposition of any excise tax under Code Section 409A, the terms of Code Section 409A shall apply and that Plan provision will be reformed to avoid the excise tax.

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ARTICLE VIII

MISCELLANEOUS

Section 8.1 Unsecured General Creditor.

Participants and their Beneficiaries shall have no legal or equitable rights, claims or interests in any specific Company assets or property, nor are they beneficiaries of, or have any rights, claims or interests in any life insurance policies, annuity contracts, or the proceeds of those policies or contracts which the Company owns or acquires (“Policies”). Any Policies or other Company assets shall be, and remain, general unpledged, unrestricted Company assets. The Company’s obligation under the Plan is merely an unfunded and unsecured Company promise to pay money in the future.

Section 8.2 Grantor Trust.

Although the Company is responsible for all Plan benefits, the Company, in its sole discretion, may contribute funds to a grantor trust, as it deems appropriate, to pay Plan benefits. The trust may be irrevocable, but trust assets shall be subject to the claims of Company creditors. If any Plan benefits are actually paid from the trust, the Company shall have no further obligation for those benefits but to the extent the benefit is not paid, benefits shall remain the obligation of, and shall be paid, by the Company. Participants or Beneficiaries shall be unsecured creditors insofar as their legal claims for Plan benefits and shall have no security interest in the grantor trust.

Section 8.3 Non-assignment.

Payments to and benefits under this Plan are not assignable, transferable or subject to alienation since they are primarily for the support and maintenance of the Participants and their Beneficiaries. Likewise, payments shall not be subject to attachments by creditors of, or through legal process against, the Company, the Administrative Committee or any Participants. Payment may be offset by the Company as provided under Section 8.6.

Section 8.4 No Right To Board Service.

The Plan provisions shall not give a Director the right to be retained in Company service nor shall this Plan or any action taken under the Plan be construed as a contract for Board service.

Section 8.5 Adjustments.

At the Company’s request, the Administrative Committee may adjust a Participant’s Plan benefit or make other adjustments required to correct administrative errors or provide uniform treatment of Participants, in a manner consistent with the Plan’s intent and purpose.

Section 8.6 Obligation to Company.

If a Participant becomes entitled to a distribution of Plan benefits, and if at that time the Participant has any outstanding debt, obligation, or other liability representing an amount owed

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to the Company, or any Company benefit plan, then the Administrative Committee, in its sole discretion, may offset the amount owed to the Company or the benefit plan against the amount of benefits otherwise distributable under this Plan.

Section 8.7 Protective Provisions.

Each Participant shall cooperate with the Company by furnishing any and all information the Company requests to facilitate benefit payments, taking any physical examinations as the Company deems necessary and taking other relevant action as the Company requests. If a Participant refuses to cooperate, the Company shall have no further obligation to the Participant under the Plan. If the Participant makes any material misstatement of information or nondisclosure of medical history, no benefits will be payable to the Participant or his Beneficiary, unless, in the Company’s sole discretion, benefits may be payable in an amount reduced to compensate the Company for any loss, cost, damage or expense suffered or incurred by the Company as a result in any way of any Participant action, misstatement or nondisclosure.

Section 8.8 Gender, Singular and Plural.

All pronouns and any variations are deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons require. The singular may be read as the plural and the plural as the singular as the case requires.

Section 8.9 Governing Law.

This Plan shall be construed, regulated and administered under the laws of the State of Texas, except to the extent that the laws are preempted by federal law.

Section 8.10 Notice.

Any notice or filing required or permitted to be given to the Administrative Committee or the Company under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Company’s principal office directed to the attention of the Secretary of the Company. Notice shall be deemed given on the delivery date or, if delivery is made by mail, on the postmark date on the receipt for registration or certification.

Section 8.11 Successors and Assigns.

This Plan shall be binding upon the Company and its successors and assigns.

Section 8.12 Incapacity.

If the Administrative Committee deems that any person entitled to receive any Plan payment is incapable of receiving or disbursing the payment because of minority, illness or infirmity, mental incompetency, or incapacity of any kind, the Administrative Committee, in its sole discretion, may take any one or more of the following actions: it may apply the payment directly for the person’s comfort, support and maintenance; it may reimburse any person for any support supplied to the person entitled to receive any payment; or it may pay any other person the Administrative Committee selects to disburse the payment for the comfort, support and

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maintenance of the person entitled to it, including, without limit, to any relative who has wholly or partially undertaken the expense of the person’s comfort, care and maintenance, or any institution which has care or custody of the person entitled to the payment. The Administrative Committee, in its sole discretion, may deposit any payment due to a minor to the minor’s credit in any savings or commercial bank the Administrative Committee’s chooses.

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EX-10.15

Exhibit 10.15

INSTRUMENT

AMENDING AND RESTATING

LYONDELL CHEMICAL COMPANY

RESTRICTED STOCK PLAN FOR

NON-EMPLOYEE DIRECTORS

Lyondell Chemical Company hereby amends and restates the Restricted Stock Plan for Non-Employee Directors, effective as of February 23, 2006, to read in its entirety as the document entitled “Lyondell Chemical Company Restricted Stock Plan for Non-Employee Directors” that is attached hereto.

IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this Instrument on this 23rd day of February, 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ Janna Sewell	BY:	/s/ Dan F. Smith
	Assistant Secretary		Dan F. Smith
			President and Chief Executive Officer

Lyondell Chemical Company

RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS

As Amended and Restated Effective February 23, 2006

LYONDELL CHEMICAL COMPANY

RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS

1. Purpose.

The Restricted Stock Plan for Non-Employee Directors of Lyondell Chemical Company (the “Plan”) is intended to provide non-employee directors of Lyondell Chemical Company (the “Company”) with an increased proprietary interest in the Company’s success and progress by granting them shares of the Company’s Common Stock (“Common Stock”) (“Restricted Shares”) or share equivalents (“RSUs”) that are restricted according to the terms and conditions set forth below. The Plan is intended to increase the alignment of non-employee directors with the Company’s shareholders in terms of both risk and reward.

2. Administration.

The Plan is administered by a committee (the “Committee”) of independent members of the Company’s Board of Directors (the “Board”) designated by the Board. The Committee shall have all necessary authority and discretion to interpret any Plan provision or to determine any question regarding Restricted Shares grants under this Plan. The Committee’s determination or interpretations shall be final, conclusive and binding on all persons.

3. Eligibility.

All current or subsequently elected members of the Company’s Board of Directors who are not current employees of the Company or any of its subsidiaries (“Eligible Directors”) shall be eligible to participate in the Plan.

4. Grants.

(a) Awards. Eligible Directors shall receive an annual incentive award divided equally into an award of Restricted Shares or RSUs and an associated Deferred Cash Payment (as defined in Section 6). The Committee shall determine the amount and form of the award annually in its discretion, which may vary among Eligible Directors. The date when Committee determines the annual incentive award amount is the “Grant Date.” The Committee may provide for an RSU award in lieu of Restricted Shares, if it deems it appropriate, in its sole discretion. RSUs shall have a value equivalent to shares of Common Stock, payable solely in cash.

(b) Terms. Restricted Share or RSU awards to Eligible Directors shall be on the terms and conditions the Committee determines from time to time and with the restrictions set forth in Section 5. Deferred Cash Payments shall be subject to Section 6.

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(c) Number of Restricted Shares or RSUs. The number of Restricted Shares or RSUs granted shall be determined by dividing the dollar amount of the portion of the award allocable to Restricted Shares or RSUs by the closing price of a share of Common Stock on the last trading day of the calendar year before the calendar year when the Grant Date occurs.

(d) New Directors. A person who becomes an Eligible Director after the Grant Date for a calendar year shall receive a prorated annual Restricted Share or RSU award, based on the number of remaining months in the calendar year after the first day of the month when the person became an Eligible Director. The number of Restricted Shares or RSUs awarded shall be determined by dividing the prorated amount allocable to the partial year by the closing price of a share of Common Stock on the first trading day of the month after the month when the person became an Eligible Director.

5. Terms and Conditions of Restricted Shares or RSUs.

(a) General. Each Restricted Share or RSU award shall be subject to the restrictions under subsection (b) for the Restricted Period.

(b) Restrictions. The Restricted Shares and RSUs shall be subject to a substantial risk of forfeiture until the Restricted Period expires. An Eligible Director shall have all ownership rights and privileges of a shareholder for any outstanding unvested Restricted Shares, including the right to receive dividends and the right to vote those Restricted Shares, but shall not be entitled to delivery of a certificate for shares of Common Stock until the Restricted Period expires. An Eligible Director shall not have ownership rights and privileges attributable to any outstanding unvested RSUs, but shall be entitled to a cash payment for each RSU equal to the amount of cash dividends payable on a share of Common Stock at the time cash dividends are paid. None of the Restricted Shares or RSUs may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Restricted Period, and all Restricted Shares or RSU grants shall be forfeited and all rights of an Eligible Director to Restricted Shares or RSUs shall terminate without further obligation on the Company’s part if the Eligible Director terminates service prior to the date the Restricted Period lapses.

(c) Restricted Period. The Restricted Period for any award of Restricted Shares or RSUs shall begin on the Grant Date and shall lapse on the tenth anniversary of the Grant Date or, if earlier, the date specified in subsection (d).

During the Restricted Period, Restricted Shares may be held as a stock certificate representing the number of Restricted Shares awarded and may be registered in each Eligible Director’s name but held in the Plan’s custody for the Eligible Director’s account and not released to the Eligible Director until the Restricted Shares become vested when the Restricted Period lapses.

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(d) Lapse of Restricted Period. If an Eligible Director ceases to be a Company director due to Disability, death, Retirement, Change of Control or failure to be re-nominated to serve for any reason other than Cause, the Restricted Period shall lapse and the Restricted Shares or RSUs granted to that Eligible Director shall vest immediately. If an Eligible Director who has not ceased to be a Company director attains age 72, the Restricted Period for outstanding Restricted Shares shall lapse on the later of (i) the last day of the month in which the Eligible Director attained age 72 or (ii) May 4, 2006. If an Eligible Director ceases to be a director of the Company for any other reason, the Eligible Director shall forfeit immediately all Restricted Shares or RSUs , unless a majority of the Board, other than the Eligible Director, determines that termination of director service is in the Company’s best interest approves the lapse of the Restricted Period and vests the Restricted Shares or RSUs. Except as provided in Section 7, all restrictions on those Restricted Shares or RSUs shall lapse on vesting. A certificate for shares under a Restricted Share grant shall be delivered to the Eligible Director, or the Eligible Director’s beneficiary or estate, according to subsection (e).

For purposes of this section, the following definitions apply:

(i) “Disability” means a permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code.

(ii) “Retirement” means ceasing to be a Company director (i) on or after age 72 or (ii) at any time prior to age 72 with the consent of a majority of Board members, other than the Eligible Director.

(iii) “Change of Control” means a change of control as defined in the Company’s Non-Employee Directors Benefit Plans Trust Agreement, as in effect from time to time.

(iv) “Cause” means failure to diligently and prudently carry out the duties of a director, as determined by a majority of the Board members other than the affected director.

(e) Delivery of Restricted Shares. At the end of the Restricted Period, a stock certificate for the number of vested Restricted Shares shall be delivered free of all restrictions to the Eligible Director or the Eligible Director’s beneficiary or estate, as the case may be.

(f) Payment of RSUs. At the end of the Restricted Period, a cash payment shall be delivered to the Eligible Director or the Eligible Director’s beneficiary or estate, as the case may be. The RSU cash payment shall be calculated in the same manner as the Deferred Cash Payment.

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6. Deferred Cash Payment.

Each Eligible Director shall receive a cash payment (the “Deferred Cash Payment”) from the Company within thirty business days after the date Restricted Shares or RSUs vest when the Restricted Period lapses or, if applicable, after the date Restricted Shares or RSUs are forfeited. The amount of the Deferred Cash Payment shall be equal to the closing price per share of Common Stock on the trading date coincident with or next following the date the Restricted Shares or RSUs vest or are forfeited, multiplied by the number of vested or forfeited Restricted Shares or RSUs.

7. Regulatory Compliance.

An Eligible Director or an Eligible Director’s beneficiary or estate shall not receive or sell any Common Stock granted pursuant to this Plan until all appropriate listing, registration and qualification requirements and consents and approvals have been satisfied or obtained, free of any condition unacceptable to the Board.

The Committee shall have the authority to remove any or all of the restrictions on the Restricted Shares or RSUs, including restrictions under the Restricted Period, whenever it determines that such action is appropriate as a result of changes in applicable laws or other circumstances after the Grant date.

8. Shares Reserved Under the Plan.

The shares of Common Stock covered by grants under this Plan as Restricted Shares will not exceed 200,000 shares in the aggregate, subject to adjustment as provided below, according and subject to Rule 16b-3 of the Securities and Exchange Act of 1934, (“Exchange Act”), as amended. Restricted Shares may be originally issued or treasury shares or a combination of both.

Any shares of Common Stock granted as Restricted Shares that are terminated, forfeited or surrendered or which expire for any reason will not be available again for issuance under this Plan, if any Eligible Director received any of the benefits of shares ownership before termination, forfeiture or surrender.

9. Adjustment of Awards.

If a recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation, rights offering, separation, reorganization or liquidation, or any other change in the Company’s corporate structure or shares occurs, the Committee may make equitable adjustments in the number of Restricted Shares and RSUs and class of shares authorized to be granted as Restricted Shares or used to value RSUs, as it deems appropriate to prevent dilution or enlargement of rights. Restricted Shares or RSUs issued as a consequence of any such change shall be issued subject to the same restrictions and provisions applicable to the original Restricted Shares or RSU grant.

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10. Plan Termination or Amendment.

The Committee at any time may terminate the Plan and from time to time may alter or amend all or any part of the Plan (including any amendment deemed necessary to ensure that the Company complies with any regulatory requirement in Section 7) without shareholder approval, unless otherwise required by law or by the Securities and Exchange Commission or New York Stock Exchange rules. No Plan termination or amendment may impair the rights of an Eligible Director to awards of Restricted Shares or RSUs and associated Deferred Cash Payments granted under the Plan without the Director’s consent.

11. Section 409A.

Notwithstanding anything to the contrary in this Plan, if any Plan provision or Plan award would result in the imposition of an additional tax under Section 409A of the Internal Revenue Code, related regulations and United States Treasury Department pronouncements (“Section 409A”), that Plan provision or award will be reformed to avoid imposition of the applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect the Eligible Director’s rights under any award.

12. Miscellaneous.

(a) Nothing in the Plan shall be deemed to create any Board obligation to nominate any director for reelection by the Company’s shareholders.

(b) The Company shall have the right to require that an Eligible Director pay any taxes required by law on share issuance or delivery when the restrictions lapse before any Restricted Shares or RSUs are issued or delivered.

13. Governing Law.

The Plan shall be construed according to the law of the State of Texas if federal law does not supersede and preempt state law.

14. Effective Date.

The Plan was originally effective on June 1, 1996, and was amended and restated effective October 16, 1998 and January 1, 2003. The Plan is amended and restated effective February 23, 2006.

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EX-10.16

Exhibit 10.16

INSTRUMENT AMENDING

LYONDELL CHEMICAL COMPANY

NON-EMPLOYEE DIRECTORS BENEFIT PLANS

TRUST AGREEMENT

Lyondell Chemical Company hereby amends, effective February 23, 2006, the Lyondell Chemical Company Non-Employee Directors Benefit Plans Trust Agreement, as follows:

Section 3, Change in Control, Section 3.2., “Definition of Change in Control” is revised in its entirety to read as follows:

Section 3.2. Definition of “Change in Control”. For purposes of this Trust Agreement, a “Change in Control” shall be deemed to occur on the date that one or more of the following occurs:

(i) Individuals who constitute the entire Board on the date of this amendment (“Incumbent Directors”) then cease to constitute at least a Board majority for any reason; provided, however, that any individual after the date of this amendment also shall be considered an Incumbent Director if the individual’s election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the then Incumbent Directors, but an individual shall not be considered an Incumbent Director if the individual’s initial assumption of office occurs as a result of either an actual or threatened election contest, as those terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as amended, or as a result of other actual or threatened solicitation of proxies or consents by or on behalf of any Person (as defined below) other than the Board;

(ii) The consummation of any merger, consolidation, amalgamation, reorganization, share exchange or recapitalization of the Company (or, if the Company’s capital stock is affected, any Company subsidiary), or any sale, lease, exchange or other transfer (in one transaction of a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the Company’s assets (each of the foregoing being an “Acquisition Transaction”) where:

(1) the Company’s shareholders immediately before that Acquisition Transaction do not beneficially own, directly or indirectly, immediately after that Acquisition Transaction shares or other ownership interests representing in the aggregate fifty percent (50%) or more of (a) the then outstanding common stock or other equity interests of the corporation or other entity surviving or resulting from the merger, consolidation, amalgamation, reorganization, share exchange or recapitalization or

acquiring such assets of the Company, as the case may be, or of its ultimate parent corporation or other entity, if any (the “Surviving Entity”), and (b) the Combined Voting Power of the Surviving Entity’s then outstanding Voting Securities, or

(2) the Incumbent Directors who initially approved the Acquisition Transaction do not constitute a majority of the Board of Directors, or similar managing group, of the Surviving Entity immediately after that Acquisition Transaction, or

(3) any Person directly or indirectly becomes the Beneficial Owner of the Surviving Entity’s securities representing, in the aggregate, more than twenty percent (20%) of either (A) the Surviving Entity’s then outstanding shares of common stock (“Common Shares”) or (B) the Combined Voting Power of all the Surviving Entity’s then outstanding Voting Securities, and that Person’s direct or indirect Beneficial Ownership of the Combined Voting Power of the outstanding Voting Securities of the Surviving Entity immediately after the Acquisition Transaction is more than five percentage points greater than that Person’s Beneficial Ownership in the Combined Voting Power of the outstanding Voting Securities of the Company immediately before the Acquisition Transaction was initially approved;

(iii) The Company’s stockholders approve any plan or proposal to liquidate or dissolve the Company; or

(iv) Any Person becomes, directly or indirectly, the Beneficial Owner, of Company securities representing, in the aggregate, more than twenty percent (20%) of either (A) the then outstanding Common Shares or (B) the Combined Voting Power of all of the Company’s then outstanding Voting Securities; provided, however, that notwithstanding the foregoing, no change in Control shall be deemed to occur under this Subsection (iv):

(1) Solely as a result of the Company acquiring securities in an transaction that reduces the outstanding number of Common Shares or other Voting Securities and thereby increases (a) the proportion of Common Shares beneficially owned by any Person to more than twenty percent (20%) of the then outstanding Common Shares, or (b) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to more than twenty percent (20%) of the Combined Voting Power of all then outstanding Voting Securities;

(2) Solely as a result of a Person acquiring securities directly from the Company, excluding any conversion of a security not acquired directly from the Company;

provided, further, that a Change in Control shall be deemed to occur if any Person referred to in paragraph (1) or (2) of this Subsection (iv) thereafter becomes the Beneficial Owner of additional shares or other ownership interests representing one percent (1%) or more of the Company’s outstanding Common Shares or one percent (1%) or more of the Combined Voting Power (other than as a result of (x) a stock split, stock dividend or similar transaction or (y) an event described in paragraph (1) or (2) of this Subsection (iv)).

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(v) For purposes of this Change in Control definition, the following capitalized terms have the following meanings:

(1) “Affiliate” means, as to a specified person, another person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person, within the meaning of terms used in Rule 405 under the Securities Act of 1933, as amended, or any successor rule.

(2) “Beneficial Owner” has the meaning set forth in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended.

(3) “Combined Voting Power” means the aggregate votes entitled to be cast generally by holders of then outstanding Voting Securities of a corporation or other entity to elect the Board of Directors, or similar managing group, of that corporation or entity.

(4) “Person” means any individual, entity (including, without limit, any corporation, partnership, trust, joint venture, association or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations thereunder); provided, however, that Person excludes the Company, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established for or under the terms of any employee benefit plan by the Company, LCR, or their subsidiaries.

(5) “Voting Securities” means all securities of a corporation or other entity with the right, under ordinary circumstances, to vote to elect the Board of Directors or similar managing group of that corporation or other entity.

IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this instrument on this 23^rd day of February, 2006.

ATTEST:		LYONDELL CHEMICAL COMPANY
BY:	/s/ JoAnn L. Beck	BY:	/s/ Allen C. Holmes
	Assistant Secretary		Allen C. Holmes
			Vice President and Chairman,
			Benefits Administrative Committee

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EX-10.18.(A)

Exhibit 10.18(a)

LYONDELL CHEMICAL COMPANY

AMENDED AND RESTATED 1999 INCENTIVE PLAN

AWARD AGREEMENT

Lyondell Chemical Company (“Company)” has granted the Participant a right to receive an Award (“Grant”) under the Lyondell Chemical Company Amended and Restated 1999 Incentive Plan (the “Plan”), effective on the date specified in the Grant letter (“Grant Date”).

I. GENERAL TERMS

1. Relationship to Plan.

This Award is subject to all Plan terms, conditions, provisions and any administrative interpretations which the Committee has adopted and which are in effect, including adjustment as provided in Section 11 of the Plan. Except as defined in this Award Agreement, capitalized terms have the same meanings ascribed to them in the Plan.

2. Vesting on Death, Disability or Retirement.

If the Participant has been in continuous Employment since the Grant Date, this Award shall become fully vested or exercisable, irrespective of the limits on exercise or vesting, on Employment termination due to death, Disability or Retirement.

3. Change in Control.

If the Participant has been in continuous Employment since the Grant Date and a Change in Control occurs prior to the vesting or exercise of an Award under Section II, any non-vested or non-exercisable Awards under this Award Agreement shall become fully vested or exercisable on the Change in Control. If the Participant’s employment is terminated by the Company within a two year period following a Change in Control for reasons other than cause, Awards shall remain exercisable for the balance of the exercise period. Performance-Based Awards shall become payable to the Participant as if the Change in Control date occurred at the end of the applicable Performance Cycle and as if the Target Performance level was reached on that date. Any Cash Award under this Section shall be paid within 60 days after the Change in Control date.

4. Certain Limits.

Unless the Company provides otherwise by a separate written agreement or plan covering the Participant, if a Participant would be subject to the excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) on the amounts payable under this Award Agreement and other amounts or benefits the Participant receives from a. the Company,

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b. any person whose actions result in a change of ownership covered by Code Section 280G(b)(2) or c. any person affiliated with the Company or person required to be included to calculate parachute payments under Code Sections 280G and 4999, the amounts vested under this Award Agreement shall be reduced automatically to an amount one dollar less than that which, when combined with other amounts, would subject the Participant to the excise tax.

5. Legal Compliance.

The Participant will not be entitled to exercise this Award and the Company will not be obligated to issue any shares of Common Stock or cash under this Award Agreement, if at the exercise, the share issuance or cash payment would constitute the Participant’s or the Company’s violation of any provision of any law or regulation of any governmental authority or any stock exchange or transaction quotation system. Whether or not the options and shares covered by the Plan have been registered pursuant to the Securities Act of 1933 (the “Act”) and prior to issuing any certificates for shares of Common Stock, the Company may require that the Participant represent in writing and in form and substance satisfactory to the Company, that he is acquiring shares for his own account for investment and not with a view to, or for sale in connection with, the distribution of all or any part of the shares, in violation of the Act or any other securities laws.

6. Notice.

Notice of an Award exercise must be made in the following manner, using forms the Company may provide from time to time:

a. by registered or certified United States mail, postage prepaid, to Lyondell Chemical Company, Attn: Manager of Executive Services, 1221 McKinney Street, Suite 700, Houston, Texas 77010, and the exercise date shall be the mailing date; or

b. by hand delivery or otherwise to Lyondell Chemical Company, Attn: Manager of Executive Services, 1221 McKinney Street, Suite 700, Houston, Texas 77010, and the exercise date shall be the date when the Company acknowledges receipt of the notice.

Notwithstanding the foregoing, (1) if the Company’s address is changed before the exercise date of this Award, notice of exercise shall be made instead under the previous provisions at the Company’s current address, or (2) if the Committee delegates the administration of Award exercises to a third party administrator, notice of exercise shall be made instead according to the instructions that the third party administrator gives to the Participant for the exercise.

Any other notices provided for in this Award Agreement or in the Plan shall be given in writing and shall be deemed effectively delivered or given on receipt or, in the case of notices delivered by the Company to the Participant, five days after deposit in the United States mail, postage prepaid, addressed to the Participant at the address specified in the Company’s records or at another address the Participant designates by written notice to the Company.

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7. Stock Certificates.

Certificates representing shares of Common Stock attributable to vested or exercised Awards will bear all legends required by law and necessary or advisable to effectuate the Plan provisions and this Award Agreement.

8. Tax Withholding

The Company has the right to deduct applicable taxes from any Cash Award payment, to withhold an appropriate amount of cash to pay taxes required by law at delivery or when cash vesting occurs under this Plan or to take any other action that, in the Company’s opinion, may be necessary to satisfy all tax withholding obligations.

No certificates representing shares of Common Stock shall be delivered to or for a Participant unless the amount of all federal, state and other governmental withholding tax requirements imposed on the Company for those shares of Common Stock has been remitted to the Company or unless provisions to pay withholding requirements have been made to the Committee’s satisfaction. A Participant may pay all or any portion of the taxes required to be withheld by the Company or paid by the Participant related to an Award of shares of Common Stock by delivering cash, by electing to have the Company withhold shares of Common Stock, or by delivering previously owned shares of Common Stock, with a Fair Market Value determined according to the Plan equal to the amount required to be withheld or paid. The Participant must elect the withholding or payment method on or before the date that the amount of withholding taxes are determined.

9. Successors and Assigns.

This Award Agreement shall bind and inure to the benefit of and be enforceable by the Participant, the Company and their respective permitted successors and assigns (including personal representatives, heirs and legatees), but the Participant may not assign any rights or obligations under this Award Agreement except to the extent and in the manner expressly permitted by the Plan or this Award Agreement.

10. Definitions.

The following definitions apply to this Award Agreement:

a. “Award Opportunity” means the percentage of the Target Performance Award payable to the Participant based on achieved performance

b. “Beneficiary” means (i) the Participant’s designated beneficiary under the Company’s group life insurance plan in which the Participant is eligible to participate, (ii) if there is no group life insurance designation, the Participant’s surviving spouse, or (iii) if there is no surviving spouse, the personal representative of the Participant’s estate.

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c. “Change in Control” shall be deemed to have occurred on the date that one or more of the following occurs:

(i) Individuals who constitute the entire Board on the date of this amendment (“Incumbent Directors”) then cease to constitute at least a Board majority for any reason; provided, however, that any individual after the date of this amendment also shall be considered an Incumbent Director if the individual’s election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the then Incumbent Directors, but an individual shall not be considered an Incumbent Director if the individual’s initial assumption of office occurs as a result of either an actual or threatened election contest, as those terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as amended, or as a result of other actual or threatened solicitation of proxies or consents by or on behalf of any Person (as defined below) other than the Board;

(ii) The consummation of any merger, consolidation, amalgamation, reorganization, share exchange or recapitalization of the Company (or, if the Company’s capital stock is affected, any Company subsidiary), or any sale, lease, exchange or other transfer (in one transaction of a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the Company’s assets (each of the foregoing being an “Acquisition Transaction”) where:

(1) the Company’s shareholders immediately before that Acquisition Transaction do not beneficially own, directly or indirectly, immediately after that Acquisition Transaction shares or other ownership interests representing in the aggregate fifty percent (50%) or more of (a) the then outstanding common stock or other equity interests of the corporation or other entity surviving or resulting from the merger, consolidation, amalgamation, reorganization, share exchange or recapitalization or acquiring such assets of the Company, as the case may be, or of its ultimate parent corporation or other entity, if any (the “Surviving Entity”), and (b) the Combined Voting Power of the Surviving Entity’s then outstanding Voting Securities, or

(2) the Incumbent Directors who initially approved the Acquisition Transaction do not constitute a majority of the Board of Directors, or similar managing group, of the Surviving Entity immediately after that Acquisition Transaction, or

(3) any Person directly or indirectly becomes the Beneficial Owner of the Surviving Entity’s securities representing, in the aggregate, more than twenty percent (20%) of either (A) the Surviving Entity’s then outstanding shares of common stock (“Common Shares”) or (B) the Combined Voting Power of all the Surviving Entity’s then outstanding Voting Securities, and that Person’s direct or indirect Beneficial Ownership of the Combined Voting Power of the outstanding

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Voting Securities of the Surviving Entity immediately after the Acquisition Transaction is more than five percentage points greater than that Person’s Beneficial Ownership in the Combined Voting Power of the outstanding Voting Securities of the Company immediately before the Acquisition Transaction was initially approved;

(iii) The Company’s stockholders approve any plan or proposal to liquidate or dissolve the Company; or

(iv) Any Person becomes, directly or indirectly, the Beneficial Owner, of Company securities representing, in the aggregate, more than twenty percent (20%) of either (A) the then outstanding Common Shares or (B) the Combined Voting Power of all of the Company’s then outstanding Voting Securities; provided, however, that notwithstanding the foregoing, no Change in Control shall be deemed to occur under this Subsection (iv):

(1) Solely as a result of the Company acquiring securities in an transaction that reduces the outstanding number of Common Shares or other Voting Securities and thereby increases (a) the proportion of Common Shares beneficially owned by any Person to more than twenty percent (20%) of the then outstanding Common Shares, or (b) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to more than twenty percent (20%) of the Combined Voting Power of all then outstanding Voting Securities;

(2) Solely as a result of a Person acquiring securities directly from the Company, excluding any conversion of a security not acquired directly from the Company;

provided, further, that a Change in Control shall be deemed to occur if any Person referred to in paragraph (1) or (2) of this Subsection (iv) thereafter becomes the Beneficial Owner of additional shares or other ownership interests representing one percent (1%) or more of the Company’s outstanding Common Shares or one percent (1%) or more of the Combined Voting Power (other than as a result of (x) a stock split, stock dividend or similar transaction or (y) an event described in paragraph (1) or (2) of this Subsection (iv)).

(v) For purposes of this Change in Control definition, the following capitalized terms have the following meanings:

(1) “Affiliate” means, as to a specified person, another person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person, within the meaning of terms used in Rule 405 under the Securities Act of 1933, as amended, or any successor rule.

(2) “Beneficial Owner” has the meaning set forth in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended.

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(3) “Combined Voting Power” means the aggregate votes entitled to be cast generally by holders of then outstanding Voting Securities of a corporation or other entity to elect the Board of Directors, or similar managing group, of that corporation or entity.

(4) “Person” means any individual, entity (including, without limit, any corporation, partnership, trust, joint venture, association or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulations thereunder); provided, however, that Person excludes the Company, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established for or under the terms of any employee benefit plan by the Company, LCR, or their subsidiaries.

(5) “Voting Securities” means all securities of a corporation or other entity with the right, under ordinary circumstances, to vote to elect the Board of Directors or similar managing group of that corporation or other entity.

d. “Disability” means a permanent and total disability defined in the Company’s applicable long-term disability plan or policy.

e. “Employment” means employment as an Employee with the Company or any Subsidiary. Neither the Participant’s transfer from Company employment to employment by any Subsidiary, the Participant’s transfer from employment by any Subsidiary to Company employment, nor the Participant’s transfer between Subsidiaries shall be deemed to be a Participant’s employment termination. Moreover, a Participant’s employment shall not be deemed to terminate because the Participant is absent from active employment due to temporary illness, during authorized vacation, during temporary leaves of absence granted by the Company or a Subsidiary for professional advancement, education, health or government service, during military leave for any period if the Participant returns to active employment within 90 days after military leave terminates, or during any period required to be treated as a leave of absence by any valid law or agreement.

f. “Maximum Performance” means a Ranking considered to be outstanding performance.

g. “Payment Date” means the date when an Award is paid or delivered to the Participant.

h. “Peer Group” means the companies that were members of the S&P 500 Chemicals Index or the S&P Mid-Cap 400 Chemicals Index at the beginning of the applicable Performance Cycle and that are still publicly traded as of the last day of the applicable Performance Cycle, or other group of companies the Committee selects in its discretion.

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i. “Performance Cycle” means the period beginning on January 1 of the year in which the Grant Date occurs and ending on December 31 in the third calendar year (including the year of the Grant) after the Grant Date.

j. “Ranking” means the relative performance of the Company compared to its Peer Group, based on Total Shareholder Return, and expressed as a percentile ranking.

k. “Retirement” means an Employment termination voluntarily initiated by the Participant on or after the earliest of i. age 65, ii. age 55 with 10 years of participation service credited under the Company’s qualified defined benefit pension plan in which the Participant is eligible to participate or iii. outside the United States, whenever retirement is permitted under applicable law (as the Committee determines in its sole judgment), if the Participant is eligible to receive a retirement benefit.

l. “Target Performance” means the expected Ranking for the applicable Performance Cycle.

m. “Target Performance Award” means the number of units, options, shares or SARs granted to the Participant on the Grant Date which the Participant may earn during the applicable Performance Cycle if the Company achieves Target Performance.

n. “Threshold Performance” means a Ranking considered to be the minimum acceptable performance to pay a Performance-Based Award.

o. “Total Shareholder Return” means the change in the market price of the Company’s Common Stock plus dividend yield, measured over the course of the applicable Performance Cycle.

p. “Vesting Date” means the date specified for vesting of all or a portion of an Award, as set forth in the Grant Letter; provided, however, that no Award shall fully vest before the earlier of (i) an event described in Part I, Sections 2 or 3, or (ii) the third anniversary of the Grant Date.

11. Governing Law.

This Award Agreement shall be governed by, construed and enforced according to the laws of the State of Texas.

II. CONDITIONS APPLICABLE TO SPECIFIC AWARDS.

1. Restricted Stock Awards.

a. The restricted period (“Restricted Period”) for a Restricted Stock Award shall lapse and the Award shall vest in one-third increments, with one-third of the Award vesting on each anniversary of the Vesting Date, until the Award is fully vested on the

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third anniversary of the Vesting Date. The Participant must be in continuous Employment from the Grant Date through each Vesting Date to vest the applicable portion of the Award.

b. Each Award shall be subject to the restrictions in this Section and a substantial risk of forfeiture during the Restricted Period. A Participant shall not be entitled to any Award payment until the Restricted Period for the applicable portion of the Award lapses and the Award vests. Non-vested Awards or non-vested portions of Awards and any unpaid associated Cash Award shall be forfeited on the date the Participant’s Employment terminates for any reason other than death, Disability, Retirement.

c. No rights related to an Award may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period. However, subject to the restrictions in this Award Agreement and the Plan, a Participant awarded Restricted Stock is entitled to all ownership rights, including voting rights and the right to receive any cash dividends that may be paid on non-vested shares of Restricted Stock.

d. When a portion of the Award vests, a Participant will receive a stock certificate covering a number of shares of Common Stock of the Company equal to the number of shares of Restricted Stock which vest. A Participant shall also become entitled to receive, as promptly as possible, a Cash Award equal to the Fair Market Value of a share of Common Stock of the Company on the vesting date, multiplied by the number of shares of Restricted Stock which vest.

2. Non-Qualified Stock Option Awards.

a. A Stock Option Award is intended to be a nonqualified stock option within the meaning of Code Section 83.

b. Except as provided in Part I, Section 3, one-third of a Stock Option Award (“Option”) shall become exercisable on each anniversary of the Vesting Date, until the Option is fully exercisable on the third anniversary of the Vesting Date. The Participant must be in continuous Employment from the Grant Date through each anniversary date of the applicable portion of the Award to become exercisable.

c. Except as provided in Part I, Section 3, this Award shall terminate and be of no force and effect for any Option not previously exercised by the Participant on the first to occur of:

i. the close of business on the tenth anniversary of the Grant Date;

ii. (1) for the portion of the Award exercisable on Employment termination (or which becomes exercisable on Employment termination due to death, Disability or Retirement), the expiration of (a) 90 days following the Participant’s Employment termination by the Company or a Subsidiary for reasons other than for cause (as determined by the

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Committee), death, Disability or Retirement, or (b) five (5) years following the Participant’s Employment termination by death, Disability or Retirement; and

(2) for the portion of the Award not exercisable on Employment termination, the date the Participant’s Employment terminates;

iii. the date the Participant’s Employment terminates for any reason other than those described in ii.(1).

d. The Participant shall have no shareholder rights for shares of Common Stock subject to an Option unless and until the Option has been exercised and shares of Common Stock have been transferred to the Participant.

e. Subject to the limits of this Award Agreement and the Plan, this Award may be exercised by notice provided to the Company under Part I, Section 6. Notice shall (i) state the number of shares under the Option which are being exercised and (ii) be accompanied by a check, cash or money order payable to Lyondell Chemical Company in the full amount of the purchase price for any shares of Common Stock being acquired or, at the Participant’s option, accompanied by Common Stock owned by the Participant for at least six months equal in value to the full amount of the purchase price (or any combination of cash, check, money order or Common Stock). Common Stock shall be valued at its Fair Market Value on the exercise date to determine the amount, if any, of the purchase price satisfied by payment in Common Stock. Any Common Stock delivered to satisfy all or a portion of the purchase price shall be appropriately endorsed for transfer and assignment to the Company.

On Notice of Award Exercise under Part I, Section 6, the Company shall provide the Participant with Shares of Common Stock equal to the number of Options exercised. Notwithstanding anything to the contrary, the Company, acting through the Committee, reserves the right to deliver a Cash Award in lieu of shares on an Option exercise equal to the number of Options exercised multiplied by the excess of the Fair Market Value of a share of Common Stock on the exercise date over the price per share at the Grant.

If any law or regulation requires the Company to take any action regarding the shares specified in the notice, or cash paid on exercise, the delivery time shall be postponed for the period of time necessary to take action.

3. Stock Appreciation Right Awards.

a. A Stock Appreciation Right Award (“SAR”) is the right to receive a Cash Award based on the number of SARs granted, with the value of the SAR equal to the appreciation in value of a share of Common Stock, over the price per share set forth in the Grant.

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b. Except as provided in Part I, Section 3, one third of an SAR shall become exercisable on each anniversary of the Vesting Date, until the SAR becomes fully exercisable on the third anniversary of the Vesting Date. The Participant must be in continuous Employment from the Grant Date through each anniversary date for the applicable portion of the Award to become exercisable.

c. Except as provided in Part I, Section 3, this Award shall terminate and be of no force and effect for any SAR not previously exercised by the Participant on the first to occur of:

i. the close of business on the tenth anniversary of the Grant Date;

ii. (1) for the portion of the Award exercisable on Employment termination (or which becomes exercisable on Employment termination due to death, Disability or Retirement), the expiration of (a) 90 days following the Participant’s Employment termination by the Company or a Subsidiary for reasons other than for cause (as determined by the Committee), death, Disability or Retirement, or (b) five years following the Participant’s Employment termination by death, Disability or Retirement; and

(2) for the portion of the Award not exercisable on Employment termination, the date the Participant’s Employment terminates;

iii. the date the Participant’s Employment terminates for any reason other than those described in ii.(1).

d. The Participant shall have no rights as a shareholder in the Company or any right to receive Common Stock or any other form of equity interest in the Company as a result of this Award.

e. Subject to the limits of this Award Agreement and the Plan, this Award may be exercised by notice provided to the Company under Part I, Section 6. Notice shall state the number of SARs which are being exercised.

On Notice of Award exercise under Part I, Section 6, the Company shall pay the Participant a Cash Award equal to the number of SARs exercised multiplied by the excess of the Fair Market Value of a share of Common Stock on the exercise date over the initial value of the SAR at the Grant, unless the Committee determines that the Award will be satisfied by shares of Common Stock equal to this amount.

If any law or regulation requires the Company to take any action regarding the shares specified in the notice, or cash paid on exercise, the delivery time shall be postponed for the period of time necessary to take action.

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4. Performance Units.

a. A Participant shall be entitled to an Award only if and when the Committee determines that previously established goals for the Award have been met.

b. The Award shall be forfeited if the Participant is not employed or has terminated Employment before the Payment Date for any reason other than death, Disability or Retirement.

i. If the Participant’s Employment ends due to death, Disability or Retirement before the Performance Cycle ends, the Participant, or the Participant’s Beneficiary, the Participant’s Award will be pro-rated based on the number of days the Participant was an employee during the Performance Cycle.

ii. If the Participant’s Employment ends due to death, Disability or Retirement after the end of the Performance Cycle but before the Payment Date, the Participant or his Beneficiary will be eligible for the full amount of the Award for that Performance Cycle.

Payment shall be made at the time and in the same form that Awards under this Section normally are paid or delivered to other Plan Participants.

c. The achievement of the following levels of performance shall be used to calculate the Award payable for a Performance Cycle:

i. Maximum Performance means a Ranking of at least 80^th percentile.

ii. Target Performance means a Ranking of 50^th percentile.

iii. Threshold Performance means a Ranking of 30^th percentile.

The following chart shows the Award Opportunity for the level of performance achieved in the Performance Cycle:

Performance Level	% of Award Earned
Maximum Performance	200	%
Target Performance	100	%
Threshold Performance	20	%
Below Threshold Performance	0	%

The Award Opportunity for a Ranking between Threshold Performance and Target Performance, or between Target Performance and Maximum Performance, shall

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be interpolated between the values listed in the chart above. However, the amount potentially payable to the Participant shall never exceed the percentage of a Participant’s Target Performance Award earned for Maximum Performance.

d. An Award will equal the product of (i) the number of Performance Units earned according to the performance level achieved in the Performance Cycle and (ii) the average Fair Market Value of a share of Common Stock on the last ten (10) trading days of the applicable Performance Cycle. Subject to the provisions of this Section, the Award will be paid as a Cash Award, unless the Committee specifically determines to pay the Award in shares of Common Stock, or in any combination of a Cash Award and shares of Common Stock. Payment will be made as soon as practicable after the close of the applicable Performance Cycle, following the Committee’s written determination of the attained performance level.

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EX-10.20

Exhibit 10.20

LYONDELL CHEMICAL COMPANY

1999 LONG-TERM INCENTIVE PLAN

ADMINISTRATIVE GUIDELINES FOR ANNUAL CASH BONUS AWARDS

Lyondell Chemical Company (the “Company”) has previously established the Lyondell Chemical Company 1999 Long-Term Incentive Plan (the “Plan”) to reward certain key Company executives. The Company adopts these Administrative Guidelines for Annual Cash Awards under the Plan, effective January 1, 2006 (the “Guidelines”) for the benefit of eligible executives of the Company and its Subsidiaries:

1. Administration.

The Committee administers these Guidelines. All Committee decisions shall be binding and conclusive on Participants. Subject to these Guidelines, the Committee shall have the authority to:

(a) Select Participants;

(b) Determine the Financial Measures and Performance Percentage for each Plan Year, and the Target Bonus Percentage and Award Percentage for each Participant;

(c) Determine the amounts payable as Annual Cash Awards; and

(d) Establish policies and procedures to administer the Guidelines from time to time, interpret the Guidelines, and make all necessary or advisable decisions to administer the Guidelines.

2. Participation.

No Employee shall have the right, at any time, (a) to be selected as a Participant, (b) if selected, to be entitled to an Annual Cash Award, unless provided under the Guideline’s specific terms, or (c) if selected as a Participant for a Plan Year, to be selected as a Participant for any subsequent plan year.

3. Target Bonus Percentage.

(a) The Committee will assign each Participant a Target Bonus Percentage for the Plan Year, based on each Participant’s position level and other considerations the Committee deems appropriate. The Target Bonus Percentage will be assigned within 90 days after the Plan Year begins, unless an executive becomes a Participant after the first day of the Plan Year.

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(b) An executive who becomes a Participant after the first day of the Plan Year will be awarded a Target Bonus Percentage and will be eligible for an Annual Cash Award calculated under Section 8, but the Annual Cash Award shall be prorated to reflect the number of days the individual participated during that Plan Year, unless the Committee determines otherwise.

4. Financial Measures.

The Committee will establish one or more objective performance goals for the Financial Measures for the Plan Year within 90 days after the beginning of the Plan Year.

5. Performance Percentage.

The Committee will establish an objective methodology to determine the Performance Percentage that corresponds with attained performance levels under the Financial Measures within 90 days after the beginning of the Plan Year. The Committee will certify the Performance Percentage reached for a Plan Year within 60 days after that Plan Year ends.

6. Award Calculation.

(a) Each Participant’s Award Percentage for a Plan Year will be calculated by multiplying the Participant’s Target Bonus Percentage by the Performance Percentage.

(b) Each Participant’s Annual Cash Award payable for a Plan Year will be calculated by multiplying the Participant’s Award Percentage by his or her Base Salary.

(c) The maximum Annual Cash Award payable for any single Participant for a Plan Year is $4 million dollars.

7. Award Payment.

The Committee has sole and absolute authority and discretion to decide the time and manner when Annual Cash Awards, if any, shall be paid under these Guidelines. The Committee’s decision is binding and conclusive on all Participants, and shall be communicated in writing to each Participant. Generally, however, the following provisions apply:

(a) Payment Form: Annual Cash Awards under the Guidelines will be paid in cash in one lump sum, subject to adjustments for federal, state or local taxes and other deductions, if any, in effect when the Award is paid.

(b) Payment Timing: Awards will be paid no later than March 15^th after the Plan Year ends. A Participant may elect to defer an Annual Cash Award under the terms of any deferred compensation plan in which he or she is eligible to participate.

(c) Adjustments: The Committee may exercise its discretion to reduce any Annual Cash Award.

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(d) Termination, Death or Disability: Annual Cash Awards will be paid only if Participants are actually employed by and on the Company’s or a Subsidiary’s payroll on the last day of the Plan Year, except as indicated below.

(1) A Participant shall forfeit any and all Annual Cash Awards if the Participant’s employment terminates for any reason other than the circumstances described in Subsection (d)(2) or (3) before the last day of the Plan Year.

(2) If the Participant’s employment terminates due to death, Disability or Retirement before the Plan Year ends, the Participant will be paid a pro rata portion of the Award based on the number of days the Participant was an Employee during the Plan Year before the employment termination date. A prorated payment will be made at the same time and in the same form that payments are made normally to all other Plan Participants.

(3) If a Participant’s employment terminates due to death, Disability or Retirement after the Plan Year ends but before the Annual Cash Award payment date, the Participant will receive the full amount of the Award to which he would otherwise be entitled. Payment shall be made at the same time and in the same form that payments are made normally to all other Plan Participants.

(4) If a Participant commences employment with Equistar Chemicals, LP, LYONDELL-CITGO Refining LP, Millennium Chemicals Inc. or any other Subsidiary or Affiliate at any time during the Plan Year, the Participant’s Annual Cash Award shall be pro rated based upon the number of days in the Plan Year the Participant was an Employee before commencing employment with the Subsidiary or Affiliate. Payments shall be made at the same time and in the same form that payments are made normally to all other Plan Participants.

(5) If a Participant’s employment terminates by death, the Participant’s Annual Cash Award shall be paid as follows: (i) to the Participant’s designated beneficiary under the Company’s group life insurance plan in which the Participant is eligible to participate, (ii) to the Participant’s surviving spouse, or (iii) if there is no surviving spouse, to the personal representative of the Participant’s estate.

(6) Notwithstanding any contrary provision in this Section 7 or the Guidelines, a Participant’s employment shall not be deemed to terminate because the Participant is absent from active employment due to temporary illness, during authorized vacation, during temporary leaves of absence granted by the Company for professional advancement, education, health or government service, during military leave for any period if the Participant returns to active employment within 90 days after military leave terminates, or during any period required to be treated as a leave of absence by any valid law or agreement.

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(7) Notwithstanding any other provision of the Guidelines, the Committee, in its sole discretion, may permit continued participation, proration or early distribution for Annual Cash Awards that would otherwise be forfeited under the Guidelines, unless a Participant is a “covered employee” under Code Section 162(m)(3).

8. Assignments and Transfers.

A Participant’s rights under the Guidelines are personal. The Participant may not assign or transfer his rights and interest under these Guidelines, other than by a marital settlement agreement or similar domestic relations decree or order, or by will or the laws of descent and distribution. Any attempted assignment or transfer in violation of these Guidelines shall be null and void.

9. Final Determinations.

Any decision by the Company, the Board, or the Committee under these Guidelines shall be final and binding for all purposes and upon all interested persons and their heirs, successors, and personal representatives.

10. No Guaranteed Employment.

Neither these Guidelines nor any action taken under them shall confer any right to a Participant’s continued employment by the Company or a Subsidiary.

11. Amendment, Suspension or Termination of the Guidelines.

The Committee may amend, suspend or terminate the Guidelines in whole or in part at any time.

12. Relationship to Plan; Definitions.

The following definitions apply to the Guidelines. Any capitalized term not otherwise defined in the Guidelines shall have the meaning assigned to it in the Plan.

Annual Cash Award: The amount the Committee decides to pay under these Guidelines, according to the Company’s performance during the Plan Year.

Award Percentage: The percentage of the Participant’s Base Salary payable as a result of the Company’s performance during the Plan Year, calculated according to Section 6(a).

Base Salary. A Participant’s annual base salary in effect on the last day of the Plan Year.

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Disability: A permanent and total disability as defined in the Company’s long-term disability plan in which the Participant is eligible to participate.

Economic Value: Economic Value means the Company’s cash flow measured against the return that debt and equity holders expect to receive on the Company’s capital. Annual Economic Value is the difference between (i) cash generated by Company operations and (ii) the sum of the Company’s debt and equity capital, multiplied by a factor representing investors’ expected rate of return on that capital, as calculated under the formula in Schedule A.

Financial Measures: Economic Value and other objective measures of the Company’s financial and operational performance used by the Committee to evaluate the Company’s performance over the Plan Year. The Committee may use any of the performance measures specified in Section 6(a) of the Plan as Financial Measures.

Guidelines: The Administrative Guidelines for Annual Cash Bonus Awards, as embodied in this document, as amended from time to time.

Participant: An elected officer who participates in the Plan.

Performance Percentage: The percentage the Committee designates to reflect the extent that the Company attains its goals under the Financial Measures.

Plan: The Lyondell Chemical Company Amended and Restated 1999 Long-Term Incentive Plan, as amended from time to time.

Plan Year: The calendar year.

Retirement: A Participant’s voluntarily initiated employment termination on or after the earliest (i) age 65, (ii) age 55 with 10 years of participation service credited under the Company’s qualified defined benefit pension plan in which the Participant is eligible to participate or (iii) outside the U.S., the time when retirement is permitted under applicable law (as decided by the Committee in its sole judgment).

Target Bonus Percentage: The Participant’s salary percentage established by the Committee at the beginning of the Plan Year.

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LYONDELL CHEMICAL COMPANY

SCHEDULE A

I. Economic Value shall be determined according to the following formula:

Economic Value = ECF – (ECI * WACC)

Weighted Average Cost of Capital (WACC) for Lyondell, as used to calculate Economic Value shall be determined according to the following formula:

WACC = After tax cost of long-term debt * [LTD / (LTD + MVE)] + Cost of equity * [MVE / (LTD + MVE)]

Note: These ratios may be amended due to a significant change in Lyondell capital structure.

The WACC will be calculated at the end of the preceding Plan Year.

ECI will be determined at the beginning of the Plan Year and ECF will be determined at the end of the Plan Year based on Lyondell consolidated audited financial statements, as adjusted to recognize the effect of Lyondell’s interest in LYONDELL-CITGO Refining, LP consistent with the economics of the limited partnership arrangement. For example CITGO’s contributions and minority interests, loans for which Lyondell is not liable or interest relating to those loans will not be included in these determinations, regardless of their inclusion on audited financial statements. Similar adjustments consistent with the economics of the LYONDELL-CITGO Refining, LP arrangement may be warranted.

If extraordinary events occur during the Plan Year which alters the basis upon which Economic Value is calculated, the effect of these events, with the Committee’s approval, may be amortized over a period of up to three years, beginning with the year in which the event occurs. Events warranting this action may include, but are not limited to, major acquisitions, divestitures, and a recapitalization of Lyondell.

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II. Definitions

For purposes of this Schedule A, terms are defined as follows:

Cost of Equity means cost of equity as determined under the Capital Asset Pricing Model

Economic Capital Invested (“ECI”) means the sum of

Shareholder’s equity; plus

Long-term debt; plus

Current portion of long-term debt; plus

Other non-current liabilities; plus

Deferred taxes, net; plus

Accumulated depreciation, less $482,556,000 (the difference between the gross book value and estimated market value of Lyondell’s refining assets in 1991); plus

Capitalized value of significant operating leases entered into after January 1, 1999

Economic Cash Flow (“ ECF”) means the sum of

Net income (after accrual of all expenses pursuant to these Guidelines); plus

Depreciation and amortization; plus

Other non-cash items; plus

Book income tax expense less cash income tax expense; plus

Net of income tax refunds / (payments) made during the year; plus

After-tax interest, net; plus

Implicit interest on significant operating leases entered into after January 1, 1999

Long-Term Debt (“LTD”) means the book value of Lyondell’s long-term debt, including the current portion of long-term debt.

Market Value of Equity (“MVE”) means Lyondell’s stock price multiplied by the number of outstanding shares of common stock on December 31 of the year preceding the Plan Year.

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