**Exhibit 10.12**

**CONSTAR INTERNATIONAL INC.**

**2007 STOCK-BASED INCENTIVE COMPENSATION PLAN**

**CONSTAR INTERNATIONAL INC.**

**2007 STOCK-BASED INCENTIVE COMPENSATION PLAN**

**1.*****Purpose of thePlan***

The purpose of the Plan is to assist the Company in attracting and retaining valued employees by offering them a greater stakein the Company’s success and a closer identity with it, and to encourage ownership of the Company’s stock by such employees. 

**2.*****Definitions***

2.1 “Award” means an award of Restricted Stock, Restricted StockUnits, Options or SARs under the Plan. 

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

2.3 “Cause” means: (i) the Employee’s gross misconduct or gross negligence in connection with the performance of theEmployee’s duties that results in any adverse effect on the Company; (ii) the Employee embezzles any amount of the Company’s assets; (iii) the Employee’s conviction of, or a plea of *nolo contendre* to, a felonyinvolving moral turpitude; (iv) the Employee’s engaging in any business that directly or indirectly competes with the Company or the disclosure of trade secrets, customer lists or confidential information of the Company to a competitor orunauthorized person; or (v) the Employee’s material failure to follow the lawful instructions of the Board. 

2.4“Change in Control” means: 

(i) The acquisition, after the effective date of the Plan, by an individual, entity orgroup (within the meaning of Section 13(d)(3) or 14 (d)(2) of the 1934 Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of more than 30% of the combined voting power of the voting securities of theCompany 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 orfrom the Company or any Subsidiary of the Company, or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, (b) any acquisition by any underwriter in connection with any firmcommitment 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 thecombined voting power of the then outstanding voting securities of such corporation (entitled to vote generally in the election of directors), is beneficially owned, directly or indirectly, by all or substantially all of the individuals and entitieswho, immediately prior to such acquisition, were the beneficial owners of the Common Stock and the Voting Securities in substantially the same proportions, respectively, as their ownership, immediately prior to such acquisition, of the Common Stockand Voting Securities; or 

(ii)The occurrence 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 Common Stock and Voting Securitiesbeneficially 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 thecorporation 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 Common Stock and the VotingSecurities; or 

(iii) The occurrence 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, other than to a subsidiary, wholly-owned, directly or indirectly, by the Company; or 

 

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(iv) During any period of twenty-four (24) consecutive months commencing upon theeffective 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 personor entity to effect a transaction described in paragraphs (i), (ii) or (iii) 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 thedirectors 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. 

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

2.6 “Committee” means the committee designated by the Board to administer the Plan under Section 4. The Committee shallhave at least two members, each of whom shall be a member of the Board, a Non-Employee Director and an Outside Director. 

2.7 “Common Stock” means the common stock of the Company, par value $.01 per share, or such other class or kind of shares or other securities resulting from the application of Section 14. 

2.8 “Company” means Constar International Inc., a Delaware corporation, or any successor corporation. 

2.9 “Disability” means an Employee’s inability to render, for a period of six consecutive months, services hereunder byreason 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 theEmployee is deemed disabled pursuant to the Company’s long-term disability plan, if one is maintained by the Company. 

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

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

2.12 “Holder” means an Employee towhom an Award is made. 

2.13 “Incentive Stock Option” means an Option that meets the requirements of an incentivestock option as defined in Section 422 of the Code and designated by the Committee as an Incentive Stock Option. 

2.14“1934 Act” means the Securities Exchange Act of 1934, as amended. 

2.15 “Non-Employee Director” means amember of the Board who meets the definition of a “non-employee director” under Rule 16b-3(b)(3) promulgated by the Securities and Exchange Commission under the 1934 Act. 

2.16 “Non-Qualified Option” means an Option not intended to be an Incentive Stock Option, and designated by the Committee as aNon-Qualified Option. 

2.17 “Option” means the right granted from time to time under Section 8 of the Plan topurchase Common Stock for a specified period of time at a stated price. An Option may be an Incentive Stock Option or a Non-Qualified Stock Option. 

2.18 “Outside Director” means a member of the Board who meets the definition of an “outside director” under Section 162(m) of the Code and the regulations thereunder. 

2.19 “Plan” means the Constar International Inc. 2007 Stock-Based Incentive Compensation Plan herein set forth, as amended fromtime to time. 

 

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2.20 “Restricted Stock” means Common Stock awarded by the Committee underSection 7 of the Plan. 

2.21 “Restricted Stock Unit” means a book-entry unit representing the value of oneshare of Common Stock awarded under Section 6 of the Plan. 

2.22 “Restriction Period” means the Holder’scontinuous period of employment with the Company or a Subsidiary during which Restricted Stock awarded under Section 7 of the Plan is subject to forfeiture. 

2.23 “Retirement” means retirement from the active employment of the Company or any Subsidiary pursuant to the relevantprovisions of the applicable pension plan of such entity or as otherwise determined by the Committee. 

2.24 “SAR”means a stock appreciation right awarded by the Committee under Section 9 of the Plan. 

2.25 “Subsidiary”means any (i) corporation if fifty percent (50%) or more of the total combined voting power of all classes of stock is owned, either directly or indirectly, by the Company or another Subsidiary or (ii) limited liability company iffifty percent (50%) or more of the membership interests is owned, either directly or indirectly, by the Company or another Subsidiary. 

2.26 “Ten Percent Shareholder” means a person who on any given date owns, either directly or indirectly (taking into account the attribution rules contained in Section 424(d) of the Code), stockpossessing more than 10 percent of the total combined voting power of all classes of stock of the Company or a Subsidiary. 

2.27 “Vesting Period” means the Holder’s period of continuous employment with the Company or a Subsidiary during which Restricted Stock Units awarded under Section 6 of the Plan are subject to forfeiture. 

**3.*****Eligibility***

AnyEmployee who is designated by the Committee as eligible to participate in the Plan shall be eligible to receive an Award under the Plan. 

**4.*****Administration and Implementation of Plan***

4.1 The Plan shall be administered by theCommittee, which shall have full power to interpret and administer the Plan and full authority to act in selecting the Employees to whom Awards will be granted, in determining the times at which Awards will be granted, in determining the type andamount of Awards to be granted to each such Employee, the terms and conditions of Awards granted under the Plan and the terms of agreements which will be entered into with Holders. The Committee shall have the power to establish different terms andconditions with respect to (i) the various types of Awards granted under the Plan, (ii) the granting of the same type of Award to different Employees (regardless of whether the Awards are granted at the same time or at different times),and (iii) the establishment of different Performance Goals for different Employees. 

4.2 The Committee’s powersshall also include, but not be limited to, the power to determine whether, to what extent and under what circumstances an Option may be exchanged for cash, Common Stock or some combination thereof; to determine whether, to what extent and under whatcircumstances Common Stock or cash payable with respect to an Award shall be deferred, either automatically or at the election of the Holder (including the power to add deemed earnings to any such deferral); to grant Awards (other than IncentiveStock Options) that are transferable by the Holder; and to determine the effect, if any, of a Change in Control of the Company upon outstanding Awards. Upon a Change in Control, the Committee may (i) fully vest and/or accelerate the vesting ofany or all Awards made under the Plan, (ii) cancel any outstanding Awards in exchange for a cash payment of an amount equal to the difference between the then Fair Market Value of the Award less the option or base price of the Award or purchaseprice of the Award, (iii) after having given the Holder a chance to exercise any outstanding Options or SARs, terminate any or all of the Holder’s unexercised Options or SARs, or (iv) where the Company is not the survivingcorporation, cause the surviving corporation to assume or replace all outstanding Awards with comparable awards. 

 

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4.3 The Committee shall have the power to adopt regulations for carrying out the Plan andto make changes in such regulations as it shall, from time to time, deem advisable. The Committee shall have the power unilaterally and without approval of a Holder to amend an existing Award in order to carry out the purposes of the Plan so longas, subject to Sections 4.2, 4.5 and 14 hereof, such an amendment does not take away any benefit granted to a Holder by the Award and as long as the amended Award comports with the terms of the Plan. Any interpretation by the Committee of the termsand provisions of the Plan and the administration thereof, and all action taken by the Committee shall be final, binding and conclusive for all purposes and upon all Holders. 

4.4 The Committee may condition the grant of any Award, the right to exercise an Award, or the lapse of any Restriction Period or VestingPeriod (or any combination thereof) upon the Holder’s achievement of a Performance Goal that is established by the Committee before the grant of the Award. For this purpose, a “Performance Goal” shall mean a goal that must be met bythe end of a period specified by the Committee (but that is substantially uncertain to be met before the grant of the Award) based upon: (i) the price of Common Stock, (ii) the market share of the Company or its Subsidiaries (or anybusiness unit thereof), (iii) sales by the Company or its Subsidiaries (or any business unit thereof), (iv) earnings per share of Common Stock, (v) return on shareholder equity of the Company, (vi) costs of the Company or itsSubsidiaries (or any business unit thereof), (vii) cash flow of the Company or its Subsidiaries (or any business unit thereof), (viii) return on total assets of the Company or its Subsidiaries (or any business unit thereof),(ix) return on invested capital of the Company or its Subsidiaries (or any business unit thereof), (x) return on net assets of the Company or its Subsidiaries (or any business unit thereof), (xi) operating income of the Company or itsSubsidiaries (or any business unit thereof), (xii) earnings before interest, taxes, depreciation and amortization (“EBITDA”), including EBITDA as may be adjusted pursuant to the Company’s or a Subsidiary’s credit agreementsor otherwise, (xiii) individual goals or (xiv) net income of the Company or its Subsidiaries (or any business unit thereof). The Committee shall have discretion to determine the specific targets with respect to each of these categories ofPerformance Goals. Before granting an Award or permitting the lapse of any Restriction Period subject to this Section, the Committee shall certify that an individual has satisfied the applicable Performance Goal. 

4.5 The Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards, including anyPerformance Goals, in recognition of unusual or nonrecurring events (including, without limitation, events described in Section 14) affecting the Company or any Subsidiary, or in response to changes in applicable laws, regulations, oraccounting principles. Notwithstanding the foregoing, no adjustment shall be made in any outstanding Awards to the extent that such adjustment would adversely affect the status of an Award intended to qualify as “qualified performance-basedcompensation” under Section 162(m) of the Code and the regulations issued thereunder. 

4.6 Members of theCommittee shall receive such compensation for their services as may be determined by the Board. All expenses and liabilities which members of the Committee incur in connection with the administration of the Plan shall be paid by the Company. TheCommittee may employ attorneys, consultants, accountants and other service providers. The Committee, the Board, the Company and the Company’s officers shall be entitled to rely upon the advice and opinions of any such person. No member of theCommittee or the Board shall be personally liable for any action, determination or interpretation made with respect to the Plan and all members of the Committee and the Board shall be fully protected by the Company in respect of any such action,determination or interpretation in the manner provided in the Company’s bylaws. 

 

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**5.*****Shares of Stock Subject to the Plan***

5.1 Subject to adjustment as provided in Section 14, the total number of shares of Common Stock available for Awards under the Planshall be eight hundred and fifty thousand (850,000) shares. Any shares issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any shares subject to an Award are forfeited or such Awardotherwise terminates or is settled for any reason whatsoever without an actual distribution of shares to the Holder, any shares counted against the number of shares available for issuance pursuant to the Plan with respect to such Award shall, to theextent of any such forfeiture, settlement, or termination, again be available for Awards under the Plan; provided, however, that the Committee may adopt procedures for the counting of shares relating to any Award to ensure appropriate counting,avoid double counting, and provide for adjustments in any case in which the number of shares actually distributed differs from the number of shares previously counted in connection with such Award. Notwithstanding anything to the contrary herein,the following shares of Common Stock shall not again be available for issuance as Awards under the Plan: (i) shares of Common Stock tendered (either actually, by attestation or otherwise) to pay all or any part of the exercise price on anyOption, (ii) any shares of Common Stock retained by the Company in satisfaction of the Holder’s obligation for withholding taxes, and (iii) shares of Common Stock not issued as a result of a net exercise of an Option. 

5.2 The maximum number of shares of Common Stock subject to Awards that may be granted to any Employee shall not exceed 120,000 during anycalendar year (the “Individual Limit”). Subject to Section 5.3, Section 15 and Section 18.6, any Award that is canceled or repriced by the Committee shall count against the Individual Limit. Notwithstanding the foregoing,the Individual Limit may be adjusted to reflect the effect on Awards of any transaction or event described in Section 14. 

5.3 Any shares issued by the Company through the assumption or substitution of outstanding grants from an acquired company shall not (i) reduce the shares available for Awards under the Plan, or (ii) be counted against theIndividual Limit. 

5.4 The maximum number of shares of Common Stock subject to Awards that may be granted in the aggregateto all Employees during any Plan Year shall not exceed 300,000 (the “Aggregate Limit”). A “Plan Year” shall mean the twelve month period commencing with the date that the Company’s stockholders approve the Plan, and thetwelve month period commencing on each anniversary of such date. Subject to Section 15 and Section 18.6, any Award that is canceled or repriced by the Committee shall count against the Aggregate Limit. Notwithstanding the foregoing, theAggregate Limit may be adjusted to reflect the effect on Awards of any transaction or event described in Section 14. Any shares issued by the Company through the assumption or substitution of outstanding grants from an acquired company shallnot be counted against the Aggregate Limit. 

**6.*****Restricted Stock Units***

An Award of Restricted Stock Units is a grant by the Company of a specified number of book-entry units, each having a value equal to the Fair Market Valueof one share of Common Stock on the date of grant. Such an Award shall be subject to the following terms and conditions: 

6.1 A Restricted Stock Unit Award shall be evidenced by a Restricted Stock Unit Agreement, which shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable. 

6.2 Upon determination of the number of Restricted Stock Units to be awarded to a Holder, the Committee shall direct that the same becredited to the Holder’s account on the books of the Company. 

6.3 The Committee may condition the grant of an Award ofRestricted Stock Units, or the expiration of a Vesting Period, upon the Employee’s achievement of one or more Performance Goal(s) specified in the Restricted Stock Unit Agreement. If the Employee fails to achieve the specified PerformanceGoal(s), the Committee shall not grant the Restricted Stock Unit Award to the Employee, or the Holder shall forfeit the Award and no payment shall be made with respect to such Award. 

6.4 The Restricted Stock Unit Agreement shall specify the duration of the Vesting Period taking into account termination of employment onaccount of death, Disability, Retirement or other cause. The Vesting Period may consist of one or more installments. At the end of the Vesting Period or any installment thereof the portion of the Holder’s Restricted Stock Unit accountapplicable to such installment shall be paid to the Holder (or, where appropriate, the Holder’s legal representative) in accordance with the terms of the Restricted Stock Unit Agreement. Notwithstanding the Vesting Period provided in aRestricted Stock Unit Agreement, the Committee may modify or accelerate the vesting limitations (consistent with Section 11 hereof), but may not accelerate the payment of, all or any part of a Restricted Stock Unit Award. 

 

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6.5 Prior to the vesting of Restricted Stock Units pursuant to Section 6.4 hereof,the Holder shall have no rights as a stockholder with respect to any Restricted Stock Units credited to the Holder’s account. Amounts equal to any dividends declared with respect to Common Stock after the granting of Restricted Stock Units andprior to the vesting thereof shall be paid to the Holder currently, or deferred and deemed to be reinvested in additional Restricted Stock Units, or otherwise reinvested on such terms as are determined at the time of the Award, and specified in theRestricted Stock Unit Agreement. 

6.6 Settlement of Restricted Stock Units shall be made in cash or shares of Common Stockor any combination thereof, as determined by the Committee. 

**7.*******Restricted Stock*********

An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common Stock to the Employee, which shares are subject toforfeiture upon the happening of specified events or upon the Employee’s and/or Company’s failure to achieve Performance Goals established by the Committee. Such an Award shall be subject to the following terms and conditions: 

7.1 Restricted Stock shall be evidenced by Restricted Stock Agreements. Such agreements shall conform to the requirements of the Planand, additionally, may contain such other provisions not inconsistent with the terms of the Plan as the Committee shall deem advisable. 

7.2 Upon determination of the number of shares of Restricted Stock to be granted to an Employee, the Committee shall direct that a certificate or certificates representing the number of shares of Common Stock beissued to the Employee with the Employee designated as the registered owner, or shall direct that a book entry account representing such shares be established in the name of the Employee at the Company’s transfer agent and registrar. Thecertificate(s) or book entry account (as the case may be) representing such shares shall be legended as to restrictions on the sale, transfer, assignment, pledge or other encumbrances during the Restriction Period. Any share certificate(s) issuedshall be deposited by the Employee, together with a stock power endorsed in blank, with the Company. 

7.3 The Committee mayrequire a cash payment from an Employee in an amount no greater than the aggregate Fair Market Value of the Common Stock awarded determined at the date of grant in exchange for the grant of an Award; or the Committee may make an award of RestrictedStock without the requirement of a cash payment. 

7.4 Unless otherwise determined by the Committee, during the RestrictionPeriod the Employee shall have all of the rights of a stockholder including the right to vote the shares of Restricted Stock and receive dividends and other distributions, provided that distributions in the form of Common Stock shall be subject tothe same restrictions as the underlying Restricted Stock. 

7.5 The Committee may condition the grant of an Award ofRestricted Stock or the expiration of the Restriction Period upon the Employee’s and/or the Company’s achievement of one or more Performance Goal(s) specified in the Restricted Stock Agreement. If the Employee fails to achieve thespecified Performance Goal(s), the Committee shall not grant the Restricted Stock to the Employee, or the Employee shall forfeit the Award of Restricted Stock and the underlying Common Stock shall be forfeited to the Company. 

7.6 The Restricted Stock Agreement shall specify the duration of the Restriction Period and the performance, employment or otherconditions (including termination of employment on account of death, Disability, Retirement or other cause) under which the Restricted Stock may be forfeited to the Company. At the end of the Restriction Period the restrictions imposed hereundershall lapse with respect to the number of shares of Restricted Stock as determined by the Committee, and the legend shall be removed and such number of shares delivered to the Employee (or, where appropriate, the Employee’s legalrepresentative). Consistent with Section 11 hereof, the Committee may modify or accelerate the vesting and delivery of shares of Restricted Stock. 

 

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**8.*******Options*********

Options give an Employee the right to purchase a specified number of shares of Common Stock from the Company for a specified time period at a fixed price.Options may be either Incentive Stock Options or Non-Qualified Stock Options. The grant of Options shall be subject to the following terms and conditions: 

8.1 Option Grants: Options shall be evidenced by a written Option Agreement. Such Option Agreements shall conform to the requirements of the Plan, and may contain such other provisions as the Committee shall deemadvisable. 

8.2 Option Price: The price per share at which Common Stock may be purchased upon exercise of an Option shall bedetermined by the Committee, but shall be not less than the Fair Market Value of a share of Common Stock on the date of grant. In the case of any Incentive Stock Option granted to a Ten Percent Shareholder, the option price per share shall not beless than 110% of the Fair Market Value of a share of Common Stock on the date of grant. 

8.3 Term of Options: An OptionAgreement shall specify when an Option may be exercisable and the terms and conditions applicable thereto. The term of an Option shall in no event be greater than 10 years, except that in the case of any Incentive Stock Option granted to a TenPercent Shareholder, the term of such Option shall not be greater than five years. 

8.4 Incentive Stock Options: Eachprovision of the Plan and each Option Agreement relating to an Incentive Stock Option shall be construed so that each Incentive Stock Option shall be an incentive stock option as defined in Section 422 of the Code, and any provisions of theOption Agreement thereof that cannot be so construed shall be disregarded. In no event may a Holder be granted an Incentive Stock Option which does not comply with such grant and vesting limitations as may be prescribed by Section 422(b) of theCode. Without limiting the foregoing, the aggregate Fair Market Value (determined as of the time the Option is granted) of the Common Stock with respect to which an Incentive Stock Option may first become exercisable by a Holder in any one calendaryear under the Plan shall not exceed $100,000. 

8.5 Restrictions on Transferability: No Incentive Stock Option shall betransferable otherwise than by will or the laws of descent and distribution and, during the lifetime of the Holder, shall be exercisable only by the Holder. Upon the death of a Holder, the person to whom the rights have passed by will or by the lawsof descent and distribution may exercise an Incentive Stock Option only in accordance with this Section 8. 

8.6 Paymentof Option Price: An Option may be exercised only for a whole number of shares of Common Stock. The Committee shall establish the time and the manner in which an Option may be exercised. The option price of the shares of Common Stock received uponthe exercise of an Option shall be paid within three days of the date of exercise: (i) in full in cash at the time of the exercise, or (ii) with the proceeds received from a broker-dealer whom the Holder has authorized to sell all or aportion of the Common Stock covered by the Option, or (iii) with the consent of the Committee, in whole or in part in shares of Common Stock valued at their Fair Market Value on the date of exercise. With the consent of the Committee, paymentupon the exercise of a Non-Qualified Option may be made in whole or in part by Restricted Stock (based on the fair market value of the Restricted Stock on the date the Option is exercised, as determined by the Committee). In such case the CommonStock to which the Option relates shall be subject to the same forfeiture restrictions originally imposed on the Restricted Stock exchanged therefor. 

8.7 Termination by Death: If a Holder’s employment by the Company or a Subsidiary terminates by reason of death, any unexercised Option granted to such Holder may thereafter be exercised (to the extent suchOption was exercisable at the time of the Holder’s death or on such accelerated basis as the Committee may determine at or after grant) by, where appropriate, the Holder’s transferee or by the Holder’s legal representative, for aperiod of 12 months from the date of death or until the expiration of the stated term of the Option, whichever period is shorter. Any Option which is not exercisable or made exercisable by the Committee upon such termination shall be forfeited onthe date of such termination. 

8.8 Termination by Reason of Disability: If a Holder’s employment by the Company or aSubsidiary terminates by reason of Disability, any unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, 

 

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the Holder’s transferee or legal representative), to the extent it was exercisable at the time of termination or on such accelerated basis as theCommittee may determine at or after grant, for a period of 12 months from the date of such termination of employment or until the expiration of the stated term of the Option, whichever period is shorter. Any Option which is not exercisable or madeexercisable by the Committee upon such termination shall be forfeited on the date of such termination. 

8.9 Termination byReason of Retirement: If a Holder’s employment by the Company or a Subsidiary terminates by reason of Retirement, any unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, the Holder’stransferee or legal representative), to the extent it was exercisable at the time of termination or on such accelerated basis as the Committee may determine at or after grant, for a period of 12 months from the date of such termination of employmentor until the expiration of the stated term of the Option, whichever period is shorter. Any Option which is not exercisable or made exercisable by the Committee upon such termination shall be forfeited on the date of such termination. 

8.10 Termination Not for Cause: If a Holder’s employment by the Company or a Subsidiary is terminated by the Company or theSubsidiary not for Cause or by the Holder for a reason not specified in this Section 8 (including a voluntary termination), any unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, theHolder’s transferee or legal representative), to the extent it was exercisable at the time of termination or on such accelerated basis as the Committee may determine at or after grant consistent with Section 11 for a period of 90 days fromthe date of such termination of employment or until the expiration of the stated term of the Option, whichever period is shorter. Any Option which is not exercisable or made exercisable by the Committee upon such termination shall be forfeited onthe date of such termination. 

8.11 Termination for Cause or Other Reason: If a Holder’s employment with the Company ora Subsidiary is terminated by the Company or the Subsidiary for Cause, all unexercised Options awarded to the Holder shall terminate on the date of such termination. 

**9.*****Stock Appreciation Rights***

SARs give the Employee the right to receive, uponexercise of the SAR, the increase in the Fair Market Value of a specified number of shares of Common Stock from the date of grant of the SAR to the date of exercise. The grant of SARs shall be subject to the following terms and conditions:

9.1 SARs are rights to receive a payment in cash, Common Stock, Restricted Stock, or a combination thereof as selected bythe Committee. The value of these rights, which are determined by the appreciation in the value of shares of Common Stock subject to the SAR, shall be evidenced by SAR agreements. Such agreements shall conform to the requirements of the Plan and maycontain such other provisions as the Committee shall deem advisable. 

9.2 The base price of an SAR shall be not less than100% of the Fair Market Value of the Common Stock on the date of grant of the SAR. 

9.3 An SAR shall entitle the recipientto receive a payment equal to the excess of the Fair Market Value of the shares of Common Stock covered by the SAR on the date of exercise over the base price of the SAR. Such payment may be in cash, in shares of Common Stock, in shares ofRestricted Stock or any combination, as the Committee shall determine. 

9.4 SARs shall be subject to the same terms andconditions applicable to Options as stated in sections 8.3, 8.5, 8.7, 8.8, 8.9, 8.10 and 8.11. SARs shall also be subject to such other terms and conditions not consistent with the Plan as shall be determined by the Committee. 

**10.*****Other Stock-Based Awards***. The Committee is authorized, subject to limitations under applicable law, to grant to Employeesany type of Award other than an Award provided in Sections 6, 7, 8 or 9 hereof that is payable in, or valued in whole or in part by reference to, shares of Common Stock, and that is deemed by the Committee to be consistent with the purposes of thePlan. 

 

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**11.*****Vesting Requirements***

Notwithstanding any provision of the Plan to the contrary, no Award under the Plan shall vest or become exercisable more rapidly than at a rate of threeequal annual installments over a period of three years. In addition, at least 50% of the aggregate of all Restricted Stock Unit Awards and Restricted Stock Awards under the Plan (and any similar Awards granted under Section 10 hereof) shall besubject to the following requirements: (i) no portion of such Award shall vest or be paid on any date on which such portion is scheduled to vest (a “Vesting Date”) unless the Fair Market Value of a share of Common Stock on theapplicable Vesting Date exceeds the Fair Market Value of a share of Common Stock on the date on which such Award was granted (the “Fair Market Value Condition”), (ii) any amounts that do not vest on an applicable Vesting Date becausethe Fair Market Value Condition was not satisfied shall vest and be paid on the next applicable Vesting Date on which the Fair Market Value Condition is satisfied, and (iii) any amounts with respect to which the Fair Market Value Condition isnot satisfied during the Vesting Period or Restriction Period (as applicable) shall be forfeited. Notwithstanding the foregoing, the Committee may modify or accelerate the vesting of Awards in the event of the Holder’s death, Disability orRetirement, or upon a Change in Control. 

**12.*****Deferral Election***

Notwithstanding any provision of the Plan to the contrary, an Award Agreement may provide that payment of any Award, dividend, or dividend equivalent, orany portion thereof, may be deferred by a Holder until such time as the Committee may establish, as provided in the Award Agreement. All such deferrals shall be accomplished by the delivery of a written, irrevocable election by the Holder prior tothe time established by the Committee for such purpose, on a form provided by the Company, or, if such deferral is automatic, the terms and conditions of such deferral shall be set forth in the Award Agreement. Deferred Awards may also be creditedwith interest, at such rates to be determined by the Committee, and, with respect to those deferred Awards denominated in the form of Common Stock, with dividends or dividend equivalents. 

**13.*****Settlement of Awards***

Subject to the terms of the Plan and any applicable Award Agreement, payments or transfers to be made pursuant to Awards under the Plan may be made in such forms as the Committee shall determine, including, without limitation, cash, sharesof Common Stock, other Awards, or other property, and may be made in a single payment or transfer, or on an installment basis. 

**14.*****Adjustments upon Changes in Capitalization***

In the event of a reorganization, recapitalization, stock split, spin-off,split-off, split-up, stock dividend, issuance of stock rights, combination of shares, merger, consolidation or any other change in the corporate structure of the Company affecting Common Stock, any other distribution to stockholders other than acash dividend, any change in the corporate structure of a Subsidiary, or any similar transaction or event, the Committee shall make adjustment in the number and kind of shares authorized by the Plan and any other adjustments to outstanding Awards asit determines appropriate. Any such adjustment shall be made in an equitable manner which reflects the effect of such transaction or event. No fractional shares of Common Stock shall be issued pursuant to such an adjustment. The Fair Market Value ofany fractional shares resulting from adjustments pursuant to this Section shall, where appropriate, be paid in cash to the Holder. The determinations and adjustments made by the Committee pursuant to this Section 14 shall be conclusive.

**15.*****Effective Date, Termination and Amendment***

The Plan shall become effective upon its approval by the stockholders of the Company, and no Award shall become exercisable, realizable or vested prior tosuch approval. The Plan shall remain in full force and effect until the earlier of 10 years from its effective date, or the date it is terminated by the Board. The Board shall have the power to amend, suspend or terminate the Plan at any time,

 

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provided that no such amendment shall be made without stockholder approval to the extent such approval is required under Section 422 of the Code,Section 162(m) of the Code, the rules of a stock exchange or automated quotation system upon which the Common Stock or other securities of the Company are listed or quoted, or any other applicable law. Termination of the Plan pursuant to thisSection 15 shall not affect Awards outstanding under the Plan at the time of termination. 

**16.*****Transferability***

Except as provided below, Awards may not be pledged, assigned or transferred for any reason during the Holder’s lifetime, and anyattempt to do so shall be void and the relevant Award shall be forfeited. The Committee may grant Awards (except Incentive Stock Options) that are transferable by the Holder during his lifetime for no consideration, but such Awards shall betransferable only to the extent specifically provided in the agreement entered into with the Holder. The transferee of the Holder shall, in all cases, be subject to the provisions of the agreement between the Company and the Holder. 

**17.*****Securities Law Requirements***

The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Common Stock under any Award until completion of such registration or qualification of such Common Stock or other requiredaction under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Common Stock or other securities of the Company are listed or quoted, orcompliance with any other obligation of the Company, as the Committee may consider appropriate, and may require any Holder to make such representations, furnish such information and comply with or be subject to such other conditions as it mayconsider appropriate in connection with the issuance or delivery of Common Stock in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. 

**18.*****General Provisions***

18.1 Nothing contained in the Plan, or any Award granted pursuant to the Plan, shall confer upon any Employee any right with respect to continuance of employment by the Company or a Subsidiary, nor interfere in anyway with the right of the Company or a Subsidiary to terminate the employment of any Employee at any time. 

18.2 Forpurposes of this Plan, transfer of employment between the Company and its Subsidiaries shall not be deemed termination of employment. However, individuals employed by or providing services to an entity that ceases to be a Subsidiary shall be deemedto have incurred a termination of employment or service as of the date that such entity ceases to be a Subsidiary. 

18.3Holders shall be responsible to make appropriate provision for all taxes required to be withheld in connection with any Award, the exercise thereof and the transfer of shares of Common Stock pursuant to this Plan. Such responsibility shall extend toall applicable Federal, state, local or foreign withholding taxes. In the case of the payment of Awards in the form of Common Stock, or the exercise of Options or SARs, the Company shall, at the election of the Holder, have the right to retain thenumber of shares of Common Stock whose Fair Market Value equals the amount to be withheld in satisfaction of the applicable withholding taxes. Agreements evidencing such Awards shall contain appropriate provisions to effect withholding in thismanner. 

18.4 Without amending the Plan, Awards may be granted to Employees who are foreign nationals or employed outsidethe United States or both, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to further the purpose of the Plan. 

18.5 To the extent that Federal laws (such as the 1934 Act, the Code or the Employee Retirement Income Security Act of 1974) do nototherwise control, the Plan and all determinations made and actions taken pursuant hereto shall be governed by the law of the State of Delaware and construed accordingly. 

 

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18.6 The Committee may amend any outstanding Awards to the extent it deems appropriate;*provided*, *however*, except as provided in Section 14, no Award may be repriced, replaced, regranted through cancellation, or modified without shareholder approval if the effect would be to reduce the exercise price for the sharesunderlying the Award. The Committee may amend Awards without the consent of the Holder; provided that in the case of amendments adverse to the Holder, except as otherwise expressly provided herein, the Holder’s consent shall be required to anysuch amendment. The Committee may not issue new Awards in exchange for the cancellation of outstanding Awards. The Committee may not purchase for cash any outstanding Options having an option price per share that is more than the then current FairMarket Value of a share of Common Stock. 

To record the adoption of the Plan, theCompany has caused its authorized officers to affix its corporate name this 19th day of June, 2007. 

 
CONSTAR INTERNATIONAL INC.By: 
/s/ MICHAEL HOFFMAN
**Name:** **Michael Hoffman****Title:** **President and Chief Executive Officer**
 

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