Exhibit 10.41

 

CONSTAR INTERNATIONAL INC.

 

ANNUAL INCENTIVE & MANAGEMENT STOCK PURCHASE PLAN

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CONSTAR INTERNATIONAL INC.

ANNUAL INCENTIVE & MANAGEMENT STOCK PURCHASE PLAN

 

TABLE OF CONTENTS

 

ARTICLE I PURPOSES AND EFFECTIVE DATE    1     1.1.  

Purposes.

   1     1.2.  

Effective Date.

   1 ARTICLE II DEFINITIONS    1 ARTICLE III ELIGIBILITY    9     3.1.  

Eligibility.

   9 ARTICLE IV AWARD DETERMINATION    9     4.1.  

Performance Goals.

   9     4.2.  

Objective Compensation Formula.

   10     4.3.  

Award Opportunities.

   10     4.4.  

Adjustment of Performance Goals.

   11     4.5.  

Final Award Determinations.

   11     4.6.  

Limitations.

   12 ARTICLE V PAYMENT OF BONUS AWARDS    12     5.1.  

Form and Timing of Payment.

   12     5.2.  

Payment of Partial Awards.

   12 ARTICLE VI CONTRIBUTIONS    13     6.1.  

Bonus Deferrals.

   13     6.2.  

Matching Contributions.

   13 ARTICLE VII ACCOUNT ADMINISTRATION    13     7.1.  

Deferral Sub-Accounts.

   13     7.2.  

Matching Sub-Accounts.

   13     7.3.  

Dividends.

   14     7.4.  

Stock Adjustments.

   14     7.5.  

No Stockholders’ Rights.

   14 ARTICLE VIII VESTING    15     8.1.  

Bonus Deferrals.

   15     8.2.  

Matching Contributions.

   15     8.3.  

Change in Control.

   16 ARTICLE IX DISTRIBUTIONS    16     9.1.  

Distribution of Bonus Deferrals.

   16

 

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    9.2.  

Normal Distribution of Matching Contributions.

   16     9.3.  

Deferral of Matching Contributions.

   16     9.4.  

Distributions on Termination of Employment.

   17     9.5.  

Distributions Upon a Change in Control.

   17     9.6.  

Valuation and Manner of Distributions.

   17 ARTICLE X FUNDING    18 ARTICLE XI ADMINISTRATION    19     11.1.  

Administration.

   19     11.2.  

Administrative Review.

   19     11.3.  

General.

   20 ARTICLE XII CLAIMS PROCEDURE    20     12.1.  

Initial Claim.

   20     12.2.  

Procedure for Review.

   20     12.3.  

Claim Denial Procedure.

   21     12.4.  

Appeal Procedure.

   21     12.5.  

Decision on Appeal.

   22 ARTICLE XIII AMENDMENT AND TERMINATION    23 ARTICLE XIV MISCELLANEOUS   
23     14.1.  

Non-Guarantee of Employment.

   23     14.2.  

Rights of Participants to Benefits.

   24     14.3.  

No Assignment.

   24     14.4.  

Withholding.

   24     14.5.  

Account Statements.

   25     14.6.  

Gender.

   25     14.7.  

Titles.

   25     14.8.  

Severability.

   25     14.9.  

Successors.

   25     14.10.  

Governing Law.

   25     14.11.  

Other Plans.

   25

 

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CONSTAR INTERNATIONAL INC.

ANNUAL INCENTIVE & MANAGEMENT STOCK PURCHASE PLAN

 

ARTICLE I

 

PURPOSES AND EFFECTIVE DATE

 

1.1. Purposes. The purposes of the Plan are to attract and retain
highly-qualified executives, to align executive and stockholder long-term
interests by creating a direct link between annual incentive executive
compensation and stockholder return and to enable executives to acquire stock so
that they may develop and maintain a substantial stock ownership position in the
Company. The Plan is an unfunded plan that is not intended to be (i) subject to
Parts 2, 3 or 4 of Title I, Subtitle B of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or (ii) qualified under section
401(a) of the Code.

 

1.2. Effective Date. The Plan is effective January 1, 2003.

 

ARTICLE II

 

DEFINITIONS

 

As used herein, the following terms shall have the following meanings:

 

2.1. “Account” means the bookkeeping reserve account established and maintained
for each Participant for purposes of determining the amount payable to the
Participant pursuant to the Plan; each Account shall consist of a Deferral
Sub-Account, a Matching Sub-Account and such other subaccounts as are necessary
or desirable in the opinion of the Committee for the convenient administration
of the Plan. The establishment of an

 

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Account shall not require segregation of any funds of the Company or the
Employer or provide any Participant with any rights to any assets of the Company
or the Employer, except as a general creditor thereof. A Participant shall have
no right to receive payment of any amount credited to the Participant’s Account
except as expressly provided under the Plan.

 

2.2. “Approved Distribution Date” means a date after a Participant’s Normal
Distribution Date that has been approved by the Committee on which distribution
of the value of a Tranche of Restricted Stock Units will be made in accordance
with Section 9.3.

 

2.3. “Award Opportunity” means the various levels of incentive awards, which a
Participant may earn under the Plan, as established by the Committee pursuant to
Article IV.

 

2.4. “Base Salary” means the regular base salary earned by a Participant during
the Plan Year prior to any salary reduction contributions made to any of the
Company’s deferred compensation plans, except as otherwise determined by the
Committee in its sole discretion.

 

2.5. “Beneficiary” means the person(s), trust(s) or other entities, the
Participant designates, in accordance with procedures established by the
Committee, to receive any benefits under the Plan after the death of the
Participant. If the Participant has not designated a Beneficiary, or if no
Beneficiary survives the Participant, the aggregate amount then credited to the
Participant’s Account shall be paid in a single sum to the Participant’s estate.

 

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2.6. “Board” means the Board of Directors of the Company or, if the Board so
directs, the Committee acting on behalf of the Board in the exercise of any and
all powers and duties of the Board pursuant to this Plan.

 

2.7. “Bonus” means the annual performance bonus payable by the Employer to a
Participant under the Plan, as determined by the Committee after the end of such
Plan Year.

 

2.8. “Cause” means (a) a Participant, in carrying out his duties for the
Employer, engages in gross misconduct or gross negligence resulting in a
material adverse effect on the Employer, (b) a Participant embezzles any amount
of the Employer’s assets, (c) a Participant is convicted (including a plea of
guilty or nolo contendere) of a felony involving moral turpitude, (d) a
Participant’s breach of any restrictive covenant agreed to with the Employer, or
(e) a Participant’s willful and material failure to follow the lawful
instructions of the Board. For purposes of this Section 2.8, no act, or failure
to act, on the Participant’s part shall be considered “willful” unless done, or
omitted to be done, by him in bad faith and without reasonable belief that his
action or omission was in the best interest of the Employer. Any act or omission
to act by the Participant in reliance upon an opinion of counsel to the Employer
shall not be deemed to be willful.

 

2.9. “Change in Control” means:

 

(a) the acquisition, after the effective date of the Plan, by an individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the

 

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Exchange Act) of more than 30% of the combined voting power of the voting
securities of the Company entitled to vote generally in the election of
directors (the “Voting Securities”); provided, however, that the following
acquisitions shall not constitute a Change in Control: (a) any acquisition,
directly or indirectly by or from the Company or any Subsidiary, or by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary, (b) any acquisition by any underwriter in connection with any
firm commitment underwriting of securities to be issued by the Company, or (c)
any acquisition by any corporation if, immediately following such acquisition,
70% or more of the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation (entitled to vote generally in the election of directors), are
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who, immediately prior to such acquisition, were the
beneficial owners of the then outstanding Stock of the Company and the Voting
Securities in substantially the same proportions, respectively, as their
ownership, immediately prior to such acquisition, of the Stock and Voting
Securities; or

 

(b) The occurrence, after the effective date of the Plan, of a reorganization,
merger or consolidation, other than a reorganization, merger or consolidation
with respect to which all or substantially all of the individuals and entities
who were the beneficial owners, immediately prior to such reorganization, merger
or consolidation, of the Stock and Voting Securities beneficially own, directly
or indirectly, immediately after such reorganization, merger or consolidation
70% or more of the then outstanding common stock and voting securities (entitled
to vote generally in the election of directors) of the corporation

 

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resulting from such reorganization, merger or consolidation in substantially the
same proportions as their respective ownership, immediately prior to such
reorganization, merger or consolidation, of the Stock and Voting Securities; or

 

(c) The occurrence, after the effective date of the Plan, of (a) a complete
liquidation or substantial dissolution of the Company, or (b) the sale or other
disposition of all or substantially all of the assets of the Company, in each
case other than to a subsidiary, wholly-owned, directly or indirectly, by the
Company or to a holding company of which the Company is a direct or indirect
wholly owned subsidiary prior to such transaction; or

 

(d) During any period of twenty-four (24) consecutive months commencing after
the effective date of the Plan, the individuals at the beginning of any such
period who constitute the Board and any new director (other than a director
designated by a person or entity who has entered into an agreement with the
Company or other person or entity to effect a transaction described in Sections
2.9(a), (b) or (c) above) whose election by the Board or nomination for election
by the Company’s stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of any such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board.

 

2.10. “Code” means the Internal Revenue Code of 1986, as amended.

 

2.11. “Committee” means the Compensation Committee of the Board, provided that
such committee shall consist of two (2) or more individuals who are “outside
directors” to the extent required by and within the meaning of Section 162(m) of
the Code, as amended from time to time.

 

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2.12. “Company” means Constar International Inc., a corporation organized under
the laws of the State of Delaware, or any successor corporation.

 

2.13. “Disability” means an Employee’s inability to render, for a period of six
consecutive months, services to the Company by reason of permanent disability,
as determined by the written medical opinion of an independent medical physician
reasonably acceptable to the Company. In no event shall an Employee be
considered disabled for the purposes of this Plan unless the Employee is deemed
disabled pursuant to the Company’s long-term disability plan, if one is
maintained by the Company.

 

2.14. “Employee” means an officer or other key employee of the Company or a
Subsidiary including a director who is such an employee.

 

2.15. “Employer” means the Company, its successors and assigns, and any
Subsidiary, unless such Subsidiary is otherwise excluded as a participating
employer by the Board, and any organization into which an Employer may be merged
or consolidated or to which all or substantially all of its assets may be
transferred.

 

2.16. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

2.17. “Fair Market Value” means on any given date, the closing price of a share
of Stock on the principal national securities exchange on which the Stock is
listed on such date or, if the Stock was not traded on such date, on the last
preceding day on which the Stock was traded. If at any time such Stock is not
listed on any securities exchange, the Fair Market Value shall be the fair value
of such Stock as determined in good faith by the Committee.

 

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2.18. “Matching Contribution” means amounts credited to a Participant’s Account
pursuant to Section 6.2.

 

2.19. “Normal Distribution Date” means the third anniversary of the date on
which a Bonus would otherwise be payable to a Participant, or such other date as
the Committee shall determine, on which distribution of the value of a Tranche
of Restricted Stock Units will be made in accordance with Section 9.1.

 

2.20. “Plan” means the Constar International Inc. Annual Incentive & Management
Stock Purchase Plan as set forth herein and as amended from time to time.

 

2.21. “Plan Year” means the calendar year.

 

2.22. “Restricted Stock Unit” means a notional entry that is entered in a
Participant’s Account which represents the value of one share of Stock in
accordance with the terms of this Plan.

 

2.23. “Participant” means an Employee who is participating in the Plan pursuant
to Article III.

 

2.24. “Retirement” means, with respect to any Participant, resignation or
termination of employment after attainment of an age regarded by the Company or,
if applicable, a Subsidiary as the normal retirement age for its employees in
general, based upon the Company’s or the Subsidiary’s general employment and
related policies and practices.

 

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2.25. “Stock” means the common stock of the Company, par value $.01 per share,
or such other class or kind of shares or other securities designated by the
Committee.

 

2.26. “Stock Plan” means the Constar International Inc. 2002 Stock-Based
Incentive Compensation Plan, as amended from time to time.

 

2.27. “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company (or any subsequent parent of
the Company) if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

2.28. “Target Incentive Award” means the award to be paid to a Participant when
100% of performance measures are achieved, as established by the Committee.

 

2.29. “Tranche” means the amount of Restricted Stock Units credited to a
Participant’s Account during any one Plan Year.

 

2.30. “Valuation Date” means the business day used for purposes of valuing the
Restricted Stock Units credited to a Participant’s Account prior to a
distribution described in Article VII.

 

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ARTICLE III

 

ELIGIBILITY

 

3.1. Eligibility. Each Employee who is selected by the Committee shall be
eligible to become a Participant as of the date designated by the Committee. A
designated Employee shall remain eligible until such time as the Committee
affirmatively revokes such Employee’s eligibility.

 

ARTICLE IV

 

AWARD DETERMINATION

 

4.1. Performance Goals. Prior to the beginning of each Plan Year, or as soon as
practicable thereafter (but in no event more than ninety (90) days after the
beginning of such Plan Year except in the case of the first Plan Year), the
Committee shall, in its sole discretion, approve or establish in writing the
performance goals for that Plan Year. For any performance period that is less
than twelve months, the performance goals shall be established before
twenty-five percent (25%) of the relevant performance period has lapsed.

 

The performance goals may include, without limitation, any combination of
financial, non-financial and individual performance goals, as determined by the
Committee. Performance measures and their relative weight may vary by job
classification. The Committee also shall have the authority to exercise
subjective discretion in the determination of final awards, as well as the
authority to delegate the ability to exercise subjective discretion in this
respect.

 

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The Committee also may establish one or more Company-wide performance goals
which must be achieved for any Participant to receive an award for that Plan
Year.

 

The performance period with respect to which awards may be payable under the
Plan shall generally be the Plan Year; provided, however, that the Committee
shall have the authority and discretion to designate different performance
periods under the Plan.

 

Employees who are eligible to participate in the Plan shall be notified of the
performance goals and the related Award Opportunities for the relevant Plan Year
(or other performance period), as soon as practicable.

 

4.2. Objective Compensation Formula. Prior to the beginning of each Plan Year,
or as soon as practicable thereafter (but in no event more than ninety (90) days
after the beginning of such Plan Year except in the case of the first Plan
Year), the Committee shall approve or establish in writing the objective
compensation formula or standard for that Plan Year. Such objective compensation
formula or standard shall be the method for computing the amount of compensation
payable to the Participant if the performance goals are attained. The formula or
standard is objective if a third party having knowledge of the relevant
performance results could calculate the amount to be paid to a Participant.

 

4.3. Award Opportunities. Prior to the beginning of each Plan Year, or as soon
as practicable thereafter (but in no event more than ninety (90) days after the
beginning of such Plan Year except in the case of the first Plan Year), the
Committee shall establish an Award Opportunity for each Participant. Such Award
Opportunity may vary in relation to the job

 

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classification of each Participant. In the event a Participant changes job
levels during a Plan Year, the Participant’s Award Opportunity may be adjusted
to reflect the amount of time at each job level during the Plan Year.

 

4.4. Adjustment of Performance Goals. The Committee shall have the right to
adjust the performance goals and the Award Opportunities (either up or down)
during a Plan Year, to the extent permitted by Code Section 162(m) and the
regulations and interpretative rulings thereunder, if it determines that
external changes or other unanticipated business conditions have materially
affected the fairness of the goals and have unduly influenced the Company’s
ability to meet them. Further, in the event of a Plan Year of less than twelve
(12) months, the Committee shall have the right to adjust the performance goals
and the Award Opportunities accordingly.

 

4.5. Final Award Determinations. At the end of each Plan Year, Bonuses shall be
computed for each Participant as determined by the Committee. Each such award
shall be based upon (i) the Participant’s Target Incentive Award percentage (or
such greater or lesser percentage, as appropriate), multiplied by his Base
Salary, in whole or in part (or other preestablished objective compensation
formula in accordance with Section 4.2), and (ii) the attainment of financial,
non-financial and individual performance goals. In the event that a Participant
is not employed by the Employer at the end of a Plan Year, the Committee, in its
sole discretion, shall determine the appropriate adjustment to a Participant’s
Bonus, including the payment of no Bonus.

 

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4.6. Limitations. The amount payable to a Participant for any calendar year
shall not exceed 150 percent the Participant’s Base Salary.

 

ARTICLE V

 

PAYMENT OF BONUS AWARDS

 

5.1. Form and Timing of Payment. Within 60 days after the end of each Plan Year,
the Committee shall certify in writing the extent to which the Company and each
Participant has achieved the performance goals for such Plan Year, including the
specific target objective(s) and the satisfaction of any other material terms of
the awards, and the Committee shall calculate the amount of each Participant’s
Bonus for the relevant period. Fifty percent of each Bonus shall be paid to the
Participant, or to his estate in the case of death, in a single cash payment as
soon as practicable following the receipt of audited financial statements with
respect to each Plan Year and the remaining fifty percent of each Bonus shall be
credited to the Participant’s Deferral Sub-Account pursuant to Article VI. The
amount of any Bonus deferred with respect to any Plan Year shall reduce the
amount of such Bonus otherwise payable to the Participant as of the date such
payment otherwise would have been made, and the amount of such reduction shall
be allocated to the Participant’s Deferral Sub-Account effective as of the date
the applicable Bonus would otherwise have been payable.

 

5.2. Payment of Partial Awards. In the event a Participant no longer meets the
eligibility criteria as set forth in the Plan during the course of a particular
Plan Year, the Committee may, in its sole discretion, compute and pay a partial
Bonus or no Bonus for the portion of the Plan Year that an Employee was a
Participant.

 

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ARTICLE VI

 

CONTRIBUTIONS

 

6.1. Bonus Deferrals. For each Plan Year, 50 percent of each Participant’s Bonus
shall be credited to the Participant’s Deferral Sub-Account.

 

6.2. Matching Contributions. For each Plan Year, the Committee shall allocate to
each Participant’s Matching Sub-Account an amount (in accordance with Article
VII) equal to 50 percent of the Participant’s Bonus credited to the
Participant’s Deferral Sub-Account for such Plan Year. Matching Contributions
shall be allocated to a Participant’s Matching Sub-Account at the same time as
such Participant’s Bonus is allocated to his or her Deferral Sub-Account.

 

ARTICLE VII

 

ACCOUNT ADMINISTRATION

 

7.1. Deferral Sub-Accounts. All amounts credited to a Participant’s Deferral
Sub-Account shall be credited on a cash basis. The balance of a Participant’s
Deferral Sub-Account shall be credited with five percent (5%) annual interest on
a daily basis.

 

7.2. Matching Sub-Accounts. All amounts credited to a Participant’s Matching
Sub-Account shall be credited on the basis of Restricted Stock Units. The number
of Restricted Stock Units credited to a Participant’s Matching Sub-Account shall
be equal to the Participant’s total Matching Contributions for such Plan Year
divided by the Fair Market Value of the Stock on the date such amounts are
allocated to his or her Account. Partial Restricted Stock Units may be credited
to a Participant’s Matching Sub-Account.

 

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7.3. Dividends. If during the period of time a Participant’s Matching
Sub-Account is credited with Restricted Stock Units, the Company pays a dividend
with respect to its Stock, the Participant shall be credited with additional
Restricted Stock Units in accordance with this Section. The number of additional
Restricted Stock Units credited to a Participant’s Matching Sub-Account pursuant
to this Section shall be calculated by dividing (a) the product of (i) the whole
number of Restricted Stock Units held in the Participant’s Matching Sub-Account
as of the date the dividend is paid times (ii) the amount of such dividend with
respect to each share of Stock, by (b) the Fair Market Value of the Stock on the
date such dividend is paid. Restricted Stock Units shall be credited to a
Participant’s Matching Sub-Account under this Section as of the date the
applicable dividend is paid.

 

7.4. Stock Adjustments. The Committee shall adjust each Participant’s Matching
Sub-Account as the Committee, in its sole discretion deems appropriate to
reflect any stock dividend, stock split, combination of shares, merger, share
exchange, consolidation or any other change in the corporate structure of the
Company or the Stock.

 

7.5. No Stockholders’ Rights. The allocation of Restricted Stock Units to a
Participant’s Account shall not give any Participant any right or interest in
any shares of Stock that may be held from time to time in a rabbi trust incident
to the Plan or otherwise.

 

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ARTICLE VIII

 

VESTING

 

8.1. Bonus Deferrals. A Participant shall be fully vested in all amounts
(including interest) credited to his Deferral Sub-Account at all times.

 

8.2. Matching Contributions. Except as provided below, each Tranche of
Restricted Stock Units shall become vested on the applicable Normal Distribution
Date, provided the Participant remains in the continuous employment of the
Employer until such date. If a Participant terminates employment due to death or
Disability prior to the applicable Normal Distribution Date with respect to a
Tranche of Restricted Stock Units, such Tranche shall become fully vested. If a
Participant terminates employment due to retirement or is involuntarily
terminated by the Employer without Cause prior to the applicable Normal
Distribution Date with respect to a Tranche of Restricted Stock Units, such
Tranche shall become vested on a pro-rata basis. Such pro rata amount shall be
calculated based upon the Participant’s fully completed years of employment with
the Employer from the time such Tranche was credited to the Participant’s
Matching Sub-Account compared to the years of employment that would have been
completed from the time such Tranche was credited to the Participant’s Account
until the applicable Normal Distribution Date. If a Participant voluntarily
terminates employment (other than for retirement) or is terminated by the
Employer for Cause prior to the applicable Normal Distribution Date with respect
to a Tranche of Restricted Stock Units, such Tranche shall be forfeited and the
Participant shall have no rights with respect to such Restricted Stock Units.

 

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8.3. Change in Control. Upon a Change in Control, all Restricted Stock Units
credited to a Participant’s Matching Sub-Account shall become immediately fully
vested.

 

ARTICLE IX

 

DISTRIBUTIONS

 

9.1. Distribution of Bonus Deferrals. Subject to Sections 9.4 and 9.5, the
amount of each Bonus (together with interest credited on such Bonus) allocated
to a Participant’s Deferral Sub-Account shall be distributed to such Participant
upon the one-year anniversary of the date such Bonus would otherwise have been
paid; provided, however, that the Committee may determine in its sole and
absolute discretion to delay distribution to any Participant if necessary to
avoid application of the deduction limitation of section 162(m) of the Code.

 

9.2. Normal Distribution of Matching Contributions. Subject to Sections 9.4 and
9.5, and in accordance with Section 9.6, the value of a Tranche of Restricted
Stock Units shall be distributed on the Normal Distribution Date, unless the
Committee has approved a subsequent distribution date in accordance with Section
9.3; provided, however, that the Committee may determine in its sole and
absolute discretion to delay payment commencement to any Participant if
necessary to avoid application of the deduction limitation of section 162(m) of
the Code.

 

9.3. Deferral of Matching Contributions. On or before December 31 of the Plan
Year prior to the Plan Year in which the applicable Normal Distribution Date for
a Tranche of Restricted Stock Units will occur, a Participant may request that
the Committee approve a

 

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distribution from his or her Matching Sub-Account be paid on an Approved
Distribution Date elected in accordance with procedures established by the
Committee. The Approved Distribution Date shall be applicable to an entire
Tranche of Restricted Stock Units.

 

9.4. Distributions on Termination of Employment. Upon a Participant’s
termination of employment from the Employer for any reason, the entire value of
a Participant’s Deferral Sub-Account shall be distributed in cash and the value
of all vested Restricted Stock Units shall be distributed in accordance with
Section 9.6 as soon as practicable.

 

9.5. Distributions Upon a Change in Control. Upon a Change in Control, the
entire value of a Participant’s Deferral Sub-Account shall be distributed in
cash and the value of all Restricted Stock Units shall be distributed in
accordance with Section 9.6 as soon as practicable.

 

9.6. Valuation and Manner of Distributions.

 

(a) The Valuation Date for distributions made on a Normal Distribution Date or
an Approved Distribution Date in accordance with Sections 9.2 and 9.3 shall be
such Normal Distribution Date or Approved Distribution Date, as applicable.

 

(b) The Valuation Date for distributions made upon termination of employment or
Change in Control in accordance with Sections 9.4 or 9.5, respectively, shall be
the date of the Participant’s termination of employment or Change in Control, as
applicable.

 

(c) Distributions under this Plan with respect to a Participant’s Matching
Sub-Account shall be made in Stock issued under the Stock Plan, unless, the

 

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Committee provides, in its sole discretion, for all or part of a Participant’s
distribution to be in cash (including for reasons of having insufficient Stock
available under the Stock Plan or the payment of any applicable withholding
taxes); provided, however, that no partial shares of Stock shall be distributed
and in lieu thereof cash shall be distributed. Distributions in Stock shall be
made by issuing Stock certificates for a number of shares equal to the vested
Restricted Stock Units to be distributed on the applicable Valuation Date.
Distributions in cash shall be in an amount equal to the number of vested full
and partial Restricted Share Units in a Participant’s Matching Sub-Account,
which were not distributed in Stock in accordance with the prior sentence, times
the Fair Market Value of the Stock on the Valuation Date. Upon Distribution all
rights to any Restricted Stock Units shall be cancelled.

 

ARTICLE X

 

FUNDING

 

The obligations of the Corporation and the Employer to distribute benefits under
this Plan shall be interpreted solely as an unfunded, contractual obligation to
distribute only those amounts credited to the Participant’s Account pursuant to
the terms of this Plan. Any assets set aside, including any assets transferred
to a rabbi trust or purchased by the Company or the Employer with respect to
amounts payable under the Plan, shall be subject to the claims of the Company’s
or the Employer’s general creditors, and no person other than the Company or the
Employer shall, by virtue of the provisions of the Plan, have any interest in
such assets. All amounts deferred pursuant to this Plan may, in the Committee’s
discretion, be transferred to an rabbi trust as soon as practicable after such
amounts are allocated to a Participant’s Account.

 

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ARTICLE XI

 

ADMINISTRATION

 

11.1. Administration. The Plan will be administered by the Committee. The
Committee shall be the named fiduciary for purposes of the claims procedure
pursuant to Article XII and shall have authority to act to the full extent of
its absolute discretion to:

 

(a) interpret the Plan;

 

(b) resolve and determine all disputes or questions arising under the Plan,
including the power to determine the rights of Participants and Beneficiaries,
and their respective benefits, and to remedy any ambiguities, inconsistencies or
omissions in the Plan;

 

(c) create and revise rules and procedures for the administration of the Plan
and prescribe such forms as may be required for Participants to make elections
under, and otherwise participate in, the Plan; and

 

(d) take any other actions and make any other determinations as it may deem
necessary and proper for the administration of the Plan.

 

Any expenses incurred in the administration of the Plan will be paid by the
Company or the Employer.

 

11.2. Administrative Review. Except as the Committee may otherwise determine
(and subject to the claims procedure set forth in Article XII), all decisions
and determinations by the Committee shall be final and binding upon all
Participants and Beneficiaries.

 

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11.3. General. The Committee shall be entitled to rely conclusively upon, and
shall be fully protected in any action or omission taken by it in good faith
reliance upon the advice or opinion of any persons, firms or agents retained by
it, including but not limited to accountants, actuaries, counsel and other
specialists. Nothing in this Plan shall preclude the Company or any Employer
from indemnifying the members of the Committee for all actions under this Plan,
or from purchasing liability insurance to protect such persons with respect to
the Plan.

 

ARTICLE XII

 

CLAIMS PROCEDURE

 

The Committee shall administer a claims procedure as follows:

 

12.1. Initial Claim. A Participant or Beneficiary who believes himself entitled
to benefits under the Plan (the “Claimant”), or the Claimant’s authorized
representative acting on behalf of such Claimant, must make a claim for those
benefits by submitting a written notification of his or her claim of right to
such benefits. Such notification must be on the form and in accordance with the
procedures established by the Committee.

 

12.2. Procedure for Review. The Committee shall establish administrative
processes and safeguards to ensure that all claims for benefits are reviewed in
accordance with the Plan document and that, where appropriate, Plan provisions
have been applied consistently to similarly situated Claimants.

 

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12.3. Claim Denial Procedure. If a claim is wholly or partially denied, the
Committee shall notify the Claimant within a reasonable period of time, but not
later than 90 days after receipt of the claim, unless the Committee determines
that special circumstances require an extension of time for processing the
claim. If the Committee determines that an extension of time for processing is
required, written notice of the extension shall be furnished to the Claimant
prior to the termination of the initial 90-day period. In no event shall such
extension exceed a period of 180 days from receipt of the claim. The extension
notice shall indicate: (i) the special circumstances necessitating the extension
and (ii) the date by which the Committee expects to render a benefit
determination. A benefit denial notice shall be written in a manner calculated
to be understood by the Claimant and shall set forth: (i) the specific reason or
reasons for the denial, (ii) the specific reference to the Plan provisions on
which the denial is based, (iii) a description of any additional material or
information necessary for the Claimant to perfect the claim, with reasons
therefor, and (iv) the procedure for reviewing the denial of the claim and the
time limits applicable to such procedures, including a statement of the
Claimant’s right to bring a legal action under section 502(a) of ERISA following
an adverse benefit determination on review.

 

12.4. Appeal Procedure. In the case of an adverse benefit determination, the
Claimant or his or her representative shall have the opportunity to appeal to
the Committee for review thereof by requesting such review in writing to the
Committee within 60 days of receipt

 

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of notification of the denial. Failure to submit a proper application for appeal
within such 60 day period will cause such claim to be permanently denied. The
Claimant or his or her representative shall be provided, upon request and free
of charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claim. A document, record or other information shall
be deemed “relevant” to a claim in accordance with 29 C.F.R. §2560.503-1(m)(8).
The Claimant or his or her representative shall also be provided the opportunity
to submit written comments, documents, records and other information relating to
the claim for benefits. The Committee shall review the appeal taking into
account all comments, documents, records and other information submitted by the
Claimant or his or her representative relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.

 

12.5. Decision on Appeal. The Committee shall notify a Claimant of its decision
on appeal within a reasonable period of time, but not later than 60 days after
receipt of the Claimant’s request for review, unless the Committee determines
that special circumstances require an extension of time for processing the
appeal. If the Committee determines that an extension of time for processing is
required, written notice of the extension shall be furnished to the Claimant
prior to the termination of the initial 60-day period. In no event shall such
extension exceed a period of 60 days from the end of the initial period. The
extension notice shall indicate: (i) the special circumstances necessitating the
extension and (ii) the date by which the Committee expects to render a benefit
determination. An adverse benefit decision on appeal shall be written in a
manner calculated to be understood by the Claimant and shall set forth: (i) the
specific reason or reasons for the adverse determination, (ii) the specific
reference to the

 

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Plan provisions on which the denial is based, (iii) a statement that the
Claimant is entitled to receive, upon request and free of charge, reasonable
access to and copies of all documents, records, and other information relevant
to the Claimant’s claim (the relevance of a document, record or other
information will be determined in accordance with 29 C.F.R. §2560-1(m)(8)) and
(iv) a statement of the Claimant’s right to bring a legal action under section
502(a) of ERISA.

 

ARTICLE XIII

 

AMENDMENT AND TERMINATION

 

The Board or the Committee shall have the right to modify or amend the Plan at
any time and from time to time, and the Board shall have the right to
discontinue or terminate the Plan at any time and from time to time; provided,
however, that no modification, amendment, discontinuance or termination may,
without the consent of a Participant, adversely affect the rights of such
Participant to amounts previously credited to his Account or reduce the right of
such Participant to a payment or distribution hereunder which he has already
earned and to which he is otherwise entitled. In the event of termination of the
Plan, any amounts credited to the Account of a Participant may, in the sole
discretion of the Committee, be distributed in full to such Participant as soon
as reasonably practicable following such termination.

 

ARTICLE XIV

 

MISCELLANEOUS

 

14.1. Non-Guarantee of Employment. Participation in the Plan does not give any
Employee any right to be retained in the service of the Employer. Nothing in the
Plan shall interfere with or limit in any way the right of the Company to
terminate a Participant’s employment at any time.

 

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14.2. Rights of Participants to Benefits. All rights of a Participant under the
Plan to amounts credited to the Participant’s Account are mere unsecured
contractual rights of the Participant (or his or her Beneficiary) against the
Employer. Each Employer shall be primarily responsible for payment of benefits
hereunder to the Participants it employs and the Beneficiaries of such
Participants. In the event an Employer fails to pay any amount due under this
Plan for any reason, the Company shall be jointly and severally liable for the
payment of such amount.

 

14.3. No Assignment. No amounts credited to Accounts nor any rights or benefits
under the Plan shall be subject in any way to voluntary or involuntary
alienation, sale, transfer, assignment, pledge, attachment, garnishment,
execution, or encumbrance, and any attempt to accomplish the same shall be void.

 

14.4. Withholding. The Company shall have the right to deduct from any
distribution made hereunder any taxes required by law to be withheld from a
Participant with respect to such payment, and, shall have the right, in
accordance with Section 7.6(c), to require that a portion of a Participant’s
Account distribution be paid in cash in order to satisfy such withholding
obligations.

 

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14.5. Account Statements. Periodically (as determined by the Committee), each
Participant shall receive a statement indicating the amounts credited to and
payable from the Participant’s Account.

 

14.6. Gender. The masculine shall be read in the feminine, the singular in the
plural, and vice versa, whenever the context shall so require.

 

14.7. Titles. The titles to articles and sections in this Plan are placed herein
for convenience of reference only, and the Plan is not to be construed by
reference thereto.

 

14.8. Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

 

14.9. Successors. All obligations of the Company under the Plan shall be binding
upon and inure to the benefit of any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

 

14.10. Governing Law. Except to the extent preempted by applicable federal laws,
the Plan shall be construed according to the laws of the state of Delaware,
other than its conflict of laws principles.

 

14.11. Other Plans. Except as specifically provided herein, nothing in this Plan
shall be construed to affect the rights of a Participant, a Participant’s
Beneficiaries, or a

 

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Participant’s estate to receive any retirement or death benefit under any
tax-qualified or nonqualified pension plan, deferred compensation agreement,
insurance agreement or other retirement plan of the Employer.

 

To record the adoption of the Plan, Constar International Inc. has caused its
authorized representative to affix its corporate name effective as of the day
and year first written above.

 

CONSTAR INTERNATIONAL INC.

By:

 

/s/ William Little

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Title:

  Chairman of Compensation Committee

 

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