Document:

Exhibit 10.12

 

EMPLOYMENT AGREEMENT

 

                THIS AGREEMENT,
made and entered into as of December 1, 2005 (the “Effective Date”), by and
between ATP Oil & Gas Corporation (the “Company” or “ATP”) and T. Paul
Bulmahn (the “Executive”);

 

WITNESSETH
THAT:

 

                WHEREAS, the
Executive currently serves as the Company’s President and Chairman of the Board
of Directors; and

 

                WHEREAS, the
Company and Executive desire to enter into this Agreement pertaining to the
continued employment of the Executive by the Company;

 

                NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth below and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Executive and the Company hereby agree as follows:

 

                1.             Performance of Services. The
Executive’s employment with the Company shall be subject to the following:

 

(a)                                  Subject to the terms of this Agreement,
the Company hereby agrees to employ the Executive as its President during the
Agreement Term (as defined below) and the Executive hereby agrees to remain in
the employ of the Company during the Agreement Term.

 

(b)                                 The Executive agrees that he shall
perform his duties faithfully and efficiently subject to the direction of the
Board of Directors (“Board”).  The
Executive’s duties shall include providing services for both the Company and
its Affiliates (as used herein, Company shall mean and include the Company and
all of its Affiliates); provided, that the Executive shall not, without his
consent, be assigned tasks that would interfere or be inconsistent with those
of President.  The Executive will have
such authority, power, responsibilities and duties as are traditional and inherent
to his position at ATP (and the undertakings applicable to his position) and
necessary to carry out his responsibilities and the duties required of him
hereunder.

 

(c)                                  Notwithstanding the foregoing provisions
of this paragraph 1, during the Agreement Term the Executive may devote
reasonable time to activities other than those required under this Agreement,
including activities involving professional, charitable, educational, religious
and similar types of organizations, speaking engagements, membership on the
boards of directors of other profit or not-for-profit organizations, and
similar activities, to the extent that such other activities do not, in the
judgment of the Board, inhibit or prohibit the performance of the Executive’s
duties under this Agreement or conflict in any material way with the Company’s
business.  The Executive will make
periodic reports to the Board indicating the nature of activities falling
within this provision.

 

 

 

(d)                                 Subject to the terms of this Agreement,
the Executive shall not be required to perform services under this Agreement
during any period that he is Disabled (as defined in paragraph 3(b)).

 

(e)                                  The “Agreement Term” shall be the period
beginning on the Effective Date and ending on November 30, 2008.  On each anniversary of the Effective Date,
this Agreement shall automatically be extended for an additional one-year
period, unless either party to this Agreement provides notice of non-renewal to
the other party at least 6 months before any anniversary of the Effective
Date.  The term “Agreement Term” shall
also include any renewal period under the foregoing provisions of this paragraph
1(e).

 

(f)                                    For purposes of this Agreement, the term “Affiliate”
shall mean any corporation, partnership, joint venture or other entity in which
at least a fifty percent interest in such entity is owned, directly or
indirectly, by the Company (or a successor to the Company).

 

                2.             Compensation and Benefits.  Subject to the terms of this Agreement,
during the Agreement Term while the Executive is employed by the Company, the
Company shall compensate him for his services as follows:

 

(a)                                  Base Salary.  The
Executive shall receive base salary equal to the annual rate currently paid to
the Executive at the time of execution of this Agreement, payable in
substantially equal monthly or more frequent installments.  The Executive’s Salary shall be reviewed by
the Board no less frequently than annually to determine whether a change in the
amount of Salary is appropriate.

 

(b)                                 Annual Bonus. The Executive shall be eligible to
participate in an annual bonus plan which provides the Executive with a target
bonus opportunity of not less than 65% of annual Base Salary for each fiscal
year of the Company, based on the attainment of performance targets.  Each fiscal year’s performance targets shall
be established by the Compensation Committee, approved by the Board, and communicated
to the Executive no later than 30 days before renewal of this Agreement.

 

(c)                                  Restricted Stock Award.  As
of the Effective Date, the Executive shall be awarded 130,000 shares of common
stock of the Company (“Restricted Stock”) under the Company’s 2000 Stock Option
Plan (“Stock Option Plan”).  Such
Restricted Stock award shall be subject to the terms and conditions of the Stock
Option Plan.  Except as otherwise
specifically provided in this Agreement, the Stock Option Plan, or the restricted
stock agreement evidencing the award, such shares of Restricted Stock shall be
forfeited if the Executive’s Date of Termination occurs prior to the date such
shares of Restricted Stock become vested. 
The Restricted Stock shall vest with respect to 50% of the shares
awarded on the first anniversary of the Effective Date, and shall vest with
respect to an additional 25% of the shares awarded on each of the second and third
anniversaries of the Effective Date.

 

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(d)                                 Performance Bonus. 
The Executive shall be entitled to receive performance bonus payments by
the Company from time to time as established by the Compensation Committee and
approved by the Board.

 

 (e)                               Other Benefits.  The Executive
shall be eligible to participate in any and all employee benefit plans
maintained by the Company from time to time.

 

(f)                                    Perquisites. 
The Executive shall be entitled to no less than the perquisites provided
by the Company to its senior executive officers.

 

(g)                                 Salary.  For purposes
of this Agreement, “Salary” shall mean Base Salary, Annual Bonus, Restricted
Stock Award, Performance Bonus and other benefits and perquisites as they are
described in subsections (a) through (f) of Section 2 of this Agreement.

 

                3.             Termination.  The Executive’s employment with the Company
during the Agreement Term may be terminated under the following circumstances.

 

(a)           Death.  The Executive’s employment hereunder shall
terminate upon his death.

 

(b)                                 Disability.  If the
Executive becomes Disabled, the Company may terminate his employment with the
Company.  For purposes of this Agreement,
the Executive shall be deemed to be “Disabled” if (i) he is eligible for
disability benefits under the Company’s long term disability plan, or (ii) he
has a physical or mental disability which renders him incapable, after
reasonable accommodation, of performing substantially all of his duties
hereunder for a period of 180 days (which need not be consecutive) in any
12-month period.  The Executive shall choose
the physician with the Company’s consent, which shall not be unreasonably
withheld.

 

(c)                                  Cause.  The Company
may terminate the Executive’s employment hereunder immediately and at any time
for Cause by written notice to the Executive detailing the basis for the Cause
termination.  For purposes of this Agreement,
“Cause” means in the reasonable judgment of the Board (i) willful misconduct by
the Executive which is demonstrably, materially and intentionally injurious to
the Company, monetarily or otherwise, (ii) the engaging by the Executive in
egregious misconduct involving fiduciary or financial responsibilities to the
extent that his creditability and reputation no longer conforms to the standard
of senior executives of the Company, or (iii) the commission by the Executive
of a material act of dishonesty or breach of trust resulting or intending to
result in material personal benefit or material enrichment to the Executive at
the expense of the Company.  For purposes
of this provision, no act or failure to act shall be deemed “willful” unless
done or omitted to be done not in good faith and without reasonable belief that
such action or omission was in the best interest of the Company.

 

(d)                                 Good Reason. 
The Executive may terminate his employment hereunder for Good Reason,
provided that he gives the Company notice of such Good Reason within a
reasonable period (but, except as provided below, in no event more than 30
days) after he has knowledge of the events giving rise to the Good Reason and
the Company fails to 

 

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correct such events within a reasonable period (but in
no event more than 30 days) after receiving such notice from the
Executive.  “Good Reason” means, without
the Executive’s consent, (i) assigning duties to the Executive that are
inconsistent in any substantial respect with the position, authority, or
responsibilities associated with the office of President, (ii) the failure by
the Company to pay the Executive any portion of his current compensation within
ten (10) business days of the date such compensation is due, (iii) the failure
by the Company to continue any incentive compensation plan in which the
Executive participates which is material to his compensation, unless an
equitable substitute plan or alternative plan is made available to the
Executive; (iv) involuntary removal of the Executive from either his position
as a member of the Board or his position as Chairman of the Board, and (v) the
failure by the Company to obtain a satisfactory agreement from any successor to
the business of the Company to assume and agree to perform this Agreement.  In the case of clause (iv) next above, notice
of termination for Good Reason shall be given, if at all, within 30 days
following the occurrence of the event giving rise to the right to terminate for
Good Reason.

 

(e)                                  Termination by Executive. 
The Executive may terminate his employment hereunder at any time for any
reason by giving the Company prior written notice not less than 30 days prior
to such termination.  Any termination
pursuant to this paragraph 3(e) shall preclude a later claim that such termination
was for Good Reason.

 

(f)                                    Mutual Agreement. 
This Agreement may be terminated at any time by mutual written agreement
of the parties.

 

(g)                                 Termination by the Company without Cause. 
The Company may terminate the Executive’s employment hereunder at any
time for any reason by giving the Executive written notice of such termination;
provided, however, termination by the Company shall be deemed to have occurred
under this paragraph 3(g) only if such termination by the Company is not
pursuant to paragraph 3(b), 3(c) or 3(f).

 

(h)                                 Date of Termination.  “Date
of Termination” means the last day that the Executive is employed by the
Company under the terms of this Agreement, provided that his employment is
terminated in accordance with one of the foregoing provisions of this paragraph
3.

 

                4.             Rights Upon Termination.   The Executive’s right to payments and
benefits under this Agreement for periods after his Date of Termination shall
be determined in accordance with the following provisions of this paragraph 4:

 

(a)                                  If the Executive’s Date of Termination
occurs during the Agreement Term for any reason, the Company shall pay to the
Executive:

 

                                                (i)            The
Executive’s Salary for the period ending on the Date of Termination.

 

(ii)                                  Payment for unused vacation days, as determined
in accordance with Company policy in effect from time to time.

 

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(iii)                               Any other payments or benefits to be
provided to the Executive by the Company pursuant to any employee benefit plans
or arrangements adopted by the Company, to the extent such payments and
benefits are earned and vested as of the Date of Termination, or are required
by law to be offered for periods following the Executive’s Date of Termination.

 

                                                The amounts payable under clauses (i) and
(ii) above shall be paid in a lump sum as soon as practicable, but no later
than 10 days, following such Date of Termination.  Any amounts payable under clause (iii) above
shall be paid in accordance with the terms of the applicable plan or
arrangement.

 

(b)                                 If the Executive’s Date of Termination
occurs under paragraph 3(a) (relating to death) or paragraph 3(b) (relating to
being Disabled), then in addition to the amounts payable in accordance with
paragraph 4(a), the Executive will be entitled to:

 

(i)                                     a pro rata bonus payment for the fiscal year
in which such Date of Termination occurs, which shall be an amount equal to the
product of:

 

(A)                              the bonus the Executive would have
received for the fiscal year which includes his Date of Termination if he had
remained employed by the Company until the end of such year, assuming the
target bonus will be attained,

 

                                                                Multiplied
by

 

(B)                                a fraction, the numerator of which is the
number of days in the fiscal year preceding the Executive’s Date of Termination
and the denominator of which is 365.

 

Such pro rata bonus shall
be payable in a lump sum payment as soon as practicable, but no later than 10
days, following the Date of Termination.

 

(ii)                                  Immediate vesting in outstanding
Restricted Stock awarded in accordance with paragraph 2(c).

 

(c)                                  If the Executive’s Date of Termination
occurs under paragraph 3(d) (relating to termination by the Executive for Good
Reason) or paragraph 3(g) (relating to non-Cause termination by the Company),
then in addition to the amounts payable under paragraph 4(a), the Executive
shall be entitled to:

 

(i)                                     An amount equal to the Salary that the
Executive would have received if he had remained employed by the Company until
the end of the Agreement Term, at the rate in effect as of his Date of
Termination.

 

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(ii)                                  A pro rata bonus payment for the year in
which the Date of Termination occurs, determined using the method described in
paragraph 4(b).

 

(iii)                               Immediate vesting in outstanding
Restricted Stock awarded in accordance with paragraph 2(c).

 

(iv)                              Company-paid outplacement services for a
period of up to 12 months.

 

(v)                                 Three years of continued medical, dental,
life and disability benefits, for the Executive, his spouse and eligible
dependents, at the same cost and under the same terms as active employees. In
the event that the Executive’s continued participation in any such plan,
program, or arrangement of the Company is prohibited by law or the terms of the
plan or contract, the Company will arrange to provide Executive with benefits
substantially similar to those which Executive would have been entitled to
receive under such plan, program, or arrangement for such period on a basis
which provides Executive with no additional after tax cost.

 

                                                The amount payable under clauses (i) and
(ii) above shall be paid in a lump sum cash payment as soon as practicable
following the Executive’s Date of Termination, but in no event later than 10
days thereafter.

 

                5.             Payments on Change in Control.  In the event of a Change in Control (defined
below), the Executive shall be entitled to the following:

 

(a)                                An amount equal to 2.99 times the
Executive’s Salary.  Such amount shall be
paid in a lump sum cash payment within five (5) business days of the Change in
Control.

 

(b)                                 Full and immediate vesting in the
Restricted Stock awarded under paragraph 2(c).

 

                If the Executive’s
Date of Termination occurs on or after a Change in Control, then the Executive
shall also be entitled to the applicable benefits provided in paragraph 4;
provided, however, the Salary payable under subparagraph (a) above shall be in
lieu of any Salary payable under paragraph 4(c)(i) (relating to Salary through
end of Agreement term for non-Cause involuntary termination and termination for
Good Reason), if applicable.

 

                For purposes of
this Agreement, “Change in Control” shall mean the occurrence of one of the
following events:

 

(i)                                     any person, as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than (1) the Company, (2)
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or (3) any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of the common stock of the Company), is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company (not including the securities
beneficially owned by such person or any securities acquired directly from the

 

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Company or its affiliates) representing more than 25%
of the combined voting power of the Company’s then outstanding voting
securities;

 

(ii)                                  during any period of not more than two
consecutive years, individuals who at the beginning of such period constitute
the Board (such board of directors being referred to herein as the Existing
Board), and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction
described in clause (i), (iii) or (iv) of this paragraph 5) whose election by
the Existing 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 the period or whose
election or nomination for election was previously so approved (other than
approval given in connection with an actual or threatened proxy or election
contest), cease for any reason to constitute at least 51% of such Existing
Board;

 

(iii)                               the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(A) a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding without conversion or by being converted into
voting securities of the surviving or parent entity) more than 50% of the
combined voting power of the voting securities of the Company or such surviving
or parent entity outstanding immediately after such merger or consolidation or
(B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person (as hereinabove defined)
acquires more than 25% of the combined voting power of the Company’s then
outstanding securities; or

 

(iv)                              the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of 50% or more of the Company’s assets (or any
transaction having a similar effect).

 

                6.             Make
Whole Payment. If any amount payable to
the Executive by the Company or any subsidiary or affiliate thereof, whether
under this Agreement or otherwise (a “Payment”), is subject to any tax under
section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or
any similar federal or state law (an “Excise Tax”), the Company shall pay to
the Executive an additional amount (the “Make Whole-Amount”) which is
equal to (i) the amount of the Excise Tax, plus (ii) the aggregate amount of
any interest, penalties, fines or additions to any tax which are imposed in
connection with the imposition of such Excise Tax, plus (iii) all income,
excise and other applicable taxes imposed on the Executive under the laws of
any Federal, state or local government or taxing authority by reason of the
payments required under clause (i) and clause (ii) and this clause (iii).

 

(a)                                  For purposes of determining the
Make-Whole Amount, the Executive shall be deemed to be taxed at the
highest marginal rate under all applicable local, state, federal and foreign
income tax laws for the year in which the Make-Whole Amount is paid. The
Make-whole 

 

7

 

Amount
payable with respect to an Excise Tax shall be paid by the Company coincident
with the Payment with respect to which such Excise Tax relates.

 

(b)                                 All calculations
under this paragraph 6 shall be made initially by the Company and the Company
shall provide prompt written notice thereof to the Executive to enable the
Executive to timely file all applicable tax returns. Upon request of the
Executive, the Company shall provide the Executive with sufficient tax and
compensation data to enable the Executive or his tax advisor to independently
make the calculations described in subparagraph (a) above and the Company shall
reimburse the Executive for reasonable fees and expenses incurred for any such
verification.

 

(c)                                  If the Executive gives written
notice to the Company of any objection to the results of the Company’s
calculations within 60 days of the Executive’s receipt of written notice
thereof, the dispute shall be referred for determination to tax counsel
selected by the independent auditors of the Company (“Tax Counsel”). The
Company shall pay all fees and expenses of such Tax Counsel. Pending such
determination by Tax Counsel, the Company shall pay the Executive the Make-Whole
Amount as determined by it in good faith. The Company shall pay the Executive
any additional amount determined by Tax Counsel to be due under this paragraph
6 (together with interest thereon at a rate equal to 120% of the Federal short-term
rate determined under section 1274(d) of the Code) promptly after such
determination.

 

(d)                                 The determination by Tax Counsel
shall be conclusive and binding upon all parties unless the Internal Revenue
Service, a court of competent jurisdiction, or such other duly empowered
governmental body or agency (a “Tax Authority”) determines that the Executive
owes a greater or lesser amount of Excise Tax with respect to any Payment than
the amount determined by Tax Counsel.

 

(e)                                  If a Taxing Authority makes a
claim against the Executive which, if successful, would require the Company to
make a payment under this paragraph 6, the Executive agrees to contest the
claim on request of the Company subject to the following conditions:

 

(i)                                     The Executive shall notify the
Company of any such claim within 10 days of becoming aware thereof. In the
event that the Company desires the claim to be contested, it shall promptly
(but in no event more than 30 days after the notice from the Executive or such
shorter time as the Taxing Authority may specify for responding to such claim)
request the Executive to contest the claim. 
The Executive shall not make any payment of any tax which is the subject
of the claim before the Executive has given the notice or during the 30-day
period thereafter unless the Executive receives written instructions from the
Company to make such payment together with an advance of funds sufficient to
make the requested payment plus any amounts payable under this paragraph 6 determined
as if such advance were an Excise Tax, in which case the Executive will act
promptly in accordance with such instructions.

 

(ii)                                 If the Company so requests, the
Executive will contest the claim by either paying 

 

8

 

the
tax claimed and suing for a refund in the appropriate court or contesting the
claim in the United States Tax Court or other appropriate court, as directed by
the Company; provided, however, that any request by the Company for the
Executive to pay the tax shall be accompanied by an advance from the Company to
the Executive of funds sufficient to make the requested payment plus any
amounts under this paragraph 6 determined as if such advance were an Excise
Tax.  If directed by the Company in writing
the Executive will take all action necessary to compromise or settle the claim,
but in no event will the Executive compromise or settle the claim or cease to
contest the claim without the written consent of the Company; provided,
however, that the Executive may take any such action if the Executive waives in
writing his right to a payment under this paragraph 6 for any amounts payable
in connection with such claim.  The
Executive agrees to cooperate in good faith with the Company in contesting the
claim and to comply with any reasonable request from the Company concerning the
contest of the claim, including the pursuit of administrative remedies, the
appropriate forum for any judicial proceedings, and the legal basis for
contesting the claim.  Upon request of
the Company, the Executive shall take appropriate appeals of any judgment or
decision that would require the Company to make a payment under this paragraph
6.  Provided that the Executive is in
compliance with the provisions of this section, the Company shall be liable for
and indemnify the Executive against any loss in connection with, and all costs
and expenses, including attorneys, fees, which may be incurred as a result of,
contesting the claim, and shall provide to the Executive within 30 days after
each written request therefor by the Executive cash advances or reimbursement
for all such costs and expenses actually incurred or reasonably expected to be
incurred by the Executive as a result of contesting the claim.

 

(f)                                    Should a Tax
Authority finally determine that an additional Excise Tax is owed, then the
Company shall pay an additional Make-Up Amount to the Executive in a
manner consistent with this paragraph 6 with respect to any additional Excise
Tax and any assessed interest, fines, or penalties.  If any Excise Tax as calculated by the
Company or Tax Counsel, as the case may be, is finally determined by a Tax
Authority to exceed the amount required to be paid under applicable law, then
the Executive shall repay such excess to the Company within 30 days of such
determination; provided that such repayment shall be reduced by the amount of
any taxes paid by the Executive on such excess which is not offset by the tax
benefit attributable to the repayment.

 

                7.             Mitigation and Set Off.  The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise.  The
Company shall not be entitled to set off against the amounts payable to the
Executive, any amounts earned by the Executive in other employment after
termination of his employment with the Company, or any amounts which might have
been earned by the Executive had he sought such other employment.

 

                8.             Restrictive Covenants.

 

9

 

(a)                                  Noncompetition.  The
Executive covenants and agrees that at all times during the Executive’s period
of employment with the Company, and for one (1) year thereafter, the Executive
will not:

 

(i.)   Utilize trade secrets acquired or developed
while employed by the Company;

 

(ii.)  Engage, either directly or indirectly, as an
employee, a partner, agent, manager, officer or director, or by means of any
corporate or other device, in the acquisition and development of marginal oil
and gas fields in the Gulf of Mexico or the North Sea; or

 

(iii.)  Pursue, either directly or indirectly, either
for himself/herself or in any capacity for any other person, company or
corporation, properties or projects which the Company has evaluated or
acquired.

 

(b)                                 Confidentiality.  The
Executive recognizes and acknowledges that the Executive has had and will continue
to have access to various confidential or proprietary information concerning
the Company, corporations affiliated with the Company, and its clients and
third parties doing business with the Company of a special and unique value
which may include, without limitation, (i) books and records relating to
operation, finance, accounting, sales, personnel and management, (ii) policies
and matters relating particularly to operations such as customer service
requirements, costs of providing service and equipment, operating costs and
pricing matters, and (iii) various trade or business secrets, including
customer lists, route sheets, business opportunities, marketing or business
diversification plans, business development and bidding techniques, methods and
processes, financial data and the like, to the extent not generally known in
the industry (collectively, the “Protected Information”).  Executive therefore covenants and agrees that
Executive will not at any time, either while employed by the Company or afterwards,
knowingly make any independent use of, or knowingly disclose to any other
person or organization (except as authorized by the Company) any of the
Protected Information, provided that (i) while employed by the Company,
Executive may in good faith make disclosures which, in his sole judgment, he
believes are desirable and for the benefit of the Company, and (ii) Executive
may comply with legal process.

 

                9.             Enforcement.  The Executive and the Company acknowledge that
a breach of the provisions herein will cause irreparable damage to the Executive
and the Company, and such damages may be inadequate and/or difficult to measure.  Therefore, in the event of breach or
threatened breach, the Executive and the Company agree that the aggrieved party,
in addition to remedies otherwise available to it at law or equity shall be
entitled to seek injunctions, both preliminary and permanent, enjoining or
restraining such breach or threatened breach, and the Executive and the Company
hereby consent to the issuance thereof forthwith and without bond by any court
of competent jurisdiction.

 

                10.           Nonalienation.  The interests of the Executive under this
Agreement are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by the
Executor’s creditors or beneficiaries.

 

                11.           Successors.  This Agreement shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns and upon
any person acquiring, whether by merger, 

 

10

 

consolidation, purchase of assets or otherwise, all or substantially
all of the Company’s assets and business.

 

                12.           Notices.  Notices and all other communications provided
for in this Agreement shall be in writing and shall be delivered personally or
sent by registered or certified mail, return receipt requested, postage
prepaid, or sent by facsimile or prepaid overnight courier to the parties at
the addresses set forth below (or such other addresses as shall be specified by
the parties by like notice):

 

to the Company:

 

                ATP Oil & Gas Corporation

                4600 Post Oak
Place, Suite 203

                Houston,
Texas  77027

                Attn.:  General Counsel

 

To the Executive:

 

                T. Paul Bulmahn

                [Redacted]

                [Redacted]

 

                13.           Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law but, if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.  If any part of any
covenant or other provision in this Agreement is determined by a court of law
to be overly broad thereby making the covenant unenforceable, the parties
hereto agree, and it is their desire, that the court shall substitute a reasonable
and judicially enforceable limitation in its place, and that as so modified the
covenant shall be binding upon the parties as if originally set forth herein.

 

                14.           Waiver of Breach.  No waiver of any party hereto of a breach of
any provision of this Agreement by any other party will operate or be construed
as a waiver of any subsequent breach by such other party.  The failure of any party hereto to take any
action by reason of such breach will not deprive such party of the right to
take action at any time while such breach continues.

 

                15.           Amendment.  This Agreement may be amended or canceled
only by mutual agreement of the parties in writing without the consent of any
other person.  So long as the Executive
lives, no person, other than the parties hereto, shall have any rights under or
interest in this Agreement or the subject matter hereof.

 

                16.           Survival of Agreement.  Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of the Executive’s employment with the Company.

 

11

 

                17.           Entire Agreement.   This Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior and contemporaneous agreements, if any, between the
parties relating to the subject matter hereof.

 

                18.           Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Texas without regard to principals of conflict of laws.

 

                19.           Acknowledgement by Executive.  The Executive represents to the Company that
he is knowledgeable and sophisticated as to business matters, including the
subject matter of this Agreement, that he has read this Agreement and that he
understands its terms.  The Executive
acknowledges that, prior to assenting to the terms of this Agreement; he has
been given a reasonable time to review it, to consult with counsel of his
choice, and to negotiate at arm’s-length with the Company as to the
contents.  The Executive and the Company
agree that the language used in this Agreement is the language chosen by the
parties to express their mutual intent, and that no rule of strict construction
is to be applied against any party hereto. 
The Executive and the Company acknowledge that the terms of this Agreement,
to the extent of any conflict, including any employment-at-will provisions,
supersedes any provisions contained in the Company Employee Handbook.

 

                IN WITNESS
WHEREOF, the Executive has hereunto set his hand, and the Company has caused
these presents to be executed in its name and on its behalf, as of the date
above first written.

 

	
  EXECUTIVE

  	
    ATP
  OIL & GAS CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /S/ T. PAUL BULMAHN

  	
    BY

  	
  /S/ KEITH R. GODWIN

  
	
  T. Paul Bulmahn

  	
    Its

  	
  Chief Accounting Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  December 29, 2005

  	
    Date

  	
  December 29, 2005

  
	
   

  	
   

  	
   

  	
   

  
					

 

12Exhibit
10.1

 

HUNTSMAN

SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

 

(As
Restated July 1, 2004)

 

 

HUNTSMAN

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(as restated July 1,
2004)

 

THIS RESTATEMENT OF THE
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN is effective as of July 1, 2004
except as otherwise provided in this Plan.

 

This Plan as herein
restated shall govern the benefits of any Member whose employment terminates on
or after July 1, 2004 and the terms of this Plan at it existed prior to
its restatement effective July 1, 2004 shall be disregarded.  Notwithstanding the foregoing, the benefits
of a Member whose employment terminates prior to July 1, 2004 shall be
governed by the Plan as it existed at the time the employment terminated.

 

ARTICLE I

NAME

 

1.1          Name.  The Plan shall be known as “THE HUNTSMAN
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN” and is hereinafter sometimes referred
to as the “Plan”.

 

ARTICLE II

PURPOSE AND SPECIAL EFFECTIVE DATES

 

2.1          Purpose.  The primary purpose of this Plan is to
provide benefits for certain key employees that cannot be provided under the
Huntsman Defined Benefit Pension Plan because of certain limitations.  The Plan is intended to be an unfunded plan
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees for purposes of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and shall
be administered as such.

 

2.2          History.  This
Plan was originally created in 1996 by Huntsman Chemical Corporation to provide
benefits to certain executive employees that could not be provided due to legal
constraints by the Huntsman Defined Benefit Pension Plan and the Huntsman Money
Purchase Pension Plan.  In connection
with this restatement of the Plan, the liabilities of the Plan as it existed
immediately prior to this restatement which relate to the Huntsman Money
Purchase Pension Plan are being transferred to the newly established Huntsman
Supplemental Executive Pension Plan (the “Executive Pension Plan”).  All administrative actions, including the
payment of benefits, with respect to the liabilities transferred to the
Executive Pension Plan taken after the effective date of this restatement of
the Plan shall be treated in all respects as action taken under the Executive
Pension Plan.  It is intended that there
be no duplication of benefits, taking into account this Plan and the Executive
Pension Plan, and this Plan shall be interpreted and administered accordingly.

 

All rights to
supplemental benefits in excess of those provided under the Huntsman Money
Purchase Pension Plan for Members whose termination of employment occurs on or
after July 1, 2004 shall be governed by the terms of the Executive Pension
Plan and not this Plan.

 

2

 

2.3          Special Effective Dates.  The following provisions are subject to
special effective dates:

 

(a)           Section 3.4 defining “Commencement
Date” is effective January 1, 2005. 
For the period prior to January 1, 2005, the term “Commencement
Date” shall have the meaning set forth in Section 3.5 of the Plan as it
existed immediately prior to the Effective Date of this restatement.

 

(b)           Section 3.8 defining “Employer”
is effective August 16, 2005.  Prior
to August 16, 2005 the Plan is being sponsored by Huntsman LLC with
Huntsman International LLC as a participating employer along with the other
participating employers set forth in Section 3.8.   Section 3.8 shall be administered
accordingly.

 

(c)           Section 3.11 defining “Plan
Administrator” is effective August 16, 2005.  Prior to August 16, 2005, the Plan
Administrator is the person or entity designated by the President of Huntsman
LLC (or in the absence of an effective designation it is the President of
Huntsman LLC).

 

(d)           Sections 4.3, 4.4, 4.5 and 4.6
governing the payment of benefits are effective for Termination Dates on and
after January 1, 2005.  For
Termination Dates prior to January 1, 2005, the payment of benefits shall
be governed by the terms of Sections 4.2 and 4.3 of the Plan as they existed
immediately prior to the Effective Date of this restatement.

 

ARTICLE III

DEFINITIONS

 

When used herein, the
following words shall have the meanings indicated, unless the context clearly
indicates otherwise:

 

3.1          Affiliate.  The word “Affiliate” means (i) a
corporation which is a member of a controlled group of corporations (within the
meaning of Section 1563(a) of the Code determined without regard to
Sections 1563(a)(4) and (e)(3)(C) thereof) which includes an
Employer, provided that the phrase “more than 50 percent” shall be substituted
for the phrase “at least 80 percent” in Section 1563(a)(1) of the
Code, and (ii) any trade or business (whether or not incorporated) which
is under common control (as defined in Section 414(c) of the Code as
modified by Section 415(h) of the Code and regulations thereunder)
with an Employer.

 

3.2          Beneficiary.  The word “Beneficiary” shall mean the person
or persons entitled to receive benefits upon the death of a Member under this
Plan.

 

3.3          Code.  The word “Code” shall mean the Internal
Revenue Code of 1986, as amended.

 

3.4          Commencement Date.  The words “Commencement Date” shall mean the
Termination Date of the Member, provided, however, if the Member is considered
a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) as
of the Termination Date, then the Commencement Date shall be the date that is
six months after the Termination Date.

 

3.5          Defined Benefit Pension Plan.  The words “Defined Benefit Pension Plan”
means the Huntsman Defined Benefit Pension Plan.

 

3

 

3.6          Disability.  The word “Disability” shall mean any
medically determinable physical or mental impairment which is considered a
permanent disability under the terms of the Defined Benefit Pension Plan;
provided, however, on and after January 1, 2005 an impairment shall not be
considered a Disability for purposes of this Plan unless it is determined by
the Plan Administrator that the Member is disabled within the meaning of Section 409A(a)(2)(C) of
the Code.

 

3.7          Effective Date.  The “Effective Date” of this restated Plan
shall be July 1, 2004. The original effective date of the Plan was January 1,
1996.

 

3.8          Employer.  The word “Employer” shall mean the Huntsman
International LLC.  In addition, unless
the context indicates otherwise, as used in this Plan, the term “Employer”
shall also mean and include any other Affiliate of Huntsman International LLC
that has been granted permission by the Board of Directors of Huntsman
International LLC to participate in this plan. 
This permission shall be granted under such conditions and upon such
conditions as the Board of Directors deems appropriate. By a separate schedule,
an adopting employer may set forth the manner in which this Plan will apply to
its participating employees.  The
following entities are participating employers:

 

Huntsman Petrochemical
Corporation

Huntsman Purchasing, Ltd

 

The obligations of an
Employer hereunder shall be limited to the employees of that Employer
participating in this Plan.

 

3.9          Member.  The word “Member” means those executive
employees of an Employer participating in the Plan at the Effective Date of its
restatement.  In addition, it means an
executive employee of an Employer who is specifically designated as a Member by
the President (or the employee of the Employer who has the responsibilities of
the chief executive officer of that Employer if there is no employee with the
title of president) of that Employer. 
The designation shall specify the date as of which the executive
employee becomes a Member of the Plan. 
Notwithstanding the foregoing provisions of this section, the President
of the Employer (or the employee of the Employer who has the responsibilities
of the chief executive officer of that Employer if there is no employee with
the title of president) shall have full discretion to adjust the status of any
individual that is an employee of that Employer for purposes of this Plan
(whether to include an employee or to remove an employee or to set or adjust
the terms of participation).  In the
event an individual ceases to be a Member of the Plan or otherwise experiences
a change in status, any rights earned under this Plan prior to the change in
status shall be paid to the individual at such time as it would otherwise have
been, but for the change in status, under the terms of this Plan (subject to
the Employer rights to amend or terminate the Plan in Section 6.3).

 

3.10        Plan.  The word “PLAN” shall mean the Supplemental
Executive Retirement Plan set forth in and by this document, as the same may be
amended from time to time.

 

3.11        Plan Administrator.  The words “Plan Administrator” shall mean the
person or entity designated by the President of HUNTSMAN INTERNATIONAL LLC to
administer this Plan.  In the absence of
an effective designation, it shall mean the President of HUNTSMAN INTERNATIONAL
LLC.

 

4

 

3.12        “Reasonable
Cause“ means any of the following, with respect to the Member’s
position with the Employer:

 

(a)           Gross negligence, fraud, dishonesty
or willful violation of any law or material violation of any significant
Employer policy, committed in connection with the position and resulting in a
material adverse effect on the Employer; or

 

(b)           Failure to substantially perform (for
reasons other than medically determinable disability) the duties reasonably
assigned or appropriate to the position, in a manner reasonably consistent with
prior practice;

 

provided, however, that
the term “Reasonable Clause” shall not include ordinary negligence or failure
to act, whether due to an error in judgment or otherwise, if the Member has
exercised substantial efforts in good faith to perform the duties reasonably
assigned or appropriate to the position.

 

3.13        “Service” shall mean the years of service that the
Member would have under the Defined Benefit Pension Plan based upon the date of
hire specified for the Member in connection with the designation of the Member
for participation in this Plan.   If no
special date of hire was specified in connection with the designation of the
Member for participation in this Plan, then Service shall mean the Years of
Service of the Member.

 

3.15        Termination Date.  The words “Termination Date” means the date
the Member ceases to render services of the Employer and all Affiliates for any
reason whatsoever, voluntary or involuntary other than on account of the death
of the Member, provided, however, if the Plan Administrator determines that the
Member who ceases to render services on or after January 1, 2005 has not
experienced a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) on
the date that would otherwise be a Termination Date hereunder, then the “Termination
Date” for purposes of the Plan shall be the first date thereafter as of which
the Member has experienced a separation from service within the meaning of Code
Section 409A(a)(2)(A)(i).

 

3.16        Vested Member.  The words “Vested Member” shall mean:

 

(a)           a Member who is credited with ten or
more Years of Service;

 

(b)           a Member who experiences a
Termination Date on account of death or disability (as permanent disability is
defined under the Defined Benefit Pension Plan), or on or after attaining
normal retirement age under the Defined Benefit Pension Plan; or

 

(c)           a Member whose employment is
terminated by the Employer without Reasonable Cause.

 

3.17        Year of Service.  The words “Year of Service” means a year of
service as that term is defined under the Defined Benefit Pension Plan, taking
into account, however, only actual service with the Employer or an Affiliate of
the Employer, and disregarding service for a prior employer credited under the
Defined Benefit Pension Plan if that prior employer was not an Affiliate of the
Employer.

 

5

 

ARTICLE IV

SUPPLEMENTAL BENEFIT

 

4.1          Benefit.  The benefit of a Member at the Commencement
Date of the Member is an amount equal to the sum of the following:

 

(a)           An amount equal to benefit of the
Member, if any, under this Plan calculated as of July 1, 2004 under Section 4.1
of this Plan as it existed immediately prior to the Effective Date of this
restatement, converted into an opening account balance in the same manner and
using the same assumptions as applicable under the Defined Benefit Pension Plan
to the conversion of the accrued benefit of the Member under the Defined
Benefit Pension Plan into an opening account balance as of such date, and
adjusted by the interest credits that would be applied to this Opening Account
Balance if it had been part of the opening account balance of the Member under
the Defined Benefit Pension Plan for the period from July 1, 2004 to the
Commencement Date (disregarding for these purposes any limitations of Section 415
of the Code otherwise applicable to the Defined Benefit Pension Plan); and

 

(b)           An amount equal to the positive
difference between (1) the sum of the pay credits and transition credits,
as adjusted for applicable interest credits, for the period from July 1,
2004 (or such later date as the Member enters the Plan) to the Commencement
Date that would have been credited to the cash balance account of the Member in
the Defined Benefit Pension Plan under the provisions of the Defined Benefit
Pension Plan, taking into account all Service of the Member and disregarding
any limitations of Section 415 and Section 401(a)(17) Code; and (2) the
sum of the pay credits and transition credits, as adjusted for applicable
interest credits, for such period actually credited to the cash balance account
of the Member in the Defined Benefit Pension Plan.

 

4.2          Entitlement to Benefits.  A Vested Member shall be
entitled to his or her benefits upon reaching his or her Commencement Date.

 

4.3          Payment of Benefits.  Benefits shall commence to be paid to a
Vested Member on a date that is 30 days from the Commencement Date or as soon
thereafter as administratively feasible. 
The normal form of the benefit is a single cash lump sum.

 

4.4          Form of Payment.  The
amount due the Member shall be paid in one of the following forms as selected
by the Member in writing in connection with the enrollment of the Member in the
Plan or in a subsequent election that is valid in accordance with the terms of
the Plan as it existed at the time the election was made:

 

(a)           A single cash lump sum.

 

(b)           An annuity for the life of the
Member.

 

(c)           An annuity for the life of the Member
with payments guaranteed for 120 months, which payments during the guaranteed
period after the death of the Member shall be paid to the Beneficiary of the
Member.  If the Beneficiary is an
individual and dies after the death of the Member, the commuted value of the
remaining payments as the Beneficiary would have received had the Beneficiary
continued to live shall be paid in a single cash payment to the estate of the
Beneficiary.

 

(d)           A joint and survivor annuity with an
annuitant designated by the Member prior to the time benefits start to be paid
to the Member under which a reduced amount shall be paid to the Member for his
life, and his joint annuitant, if surviving at the Member’s death, shall be
entitled to receive thereafter a lifetime survivorship pension in a monthly
amount equal to 50 or 100 percent (as designated by the Member prior to the
time benefits start to be paid to the Member) of the amount which had been
payable to the Member.

 

6

 

In the event the Member
makes no election as to the form of payment (or the election does not satisfy
the applicable requirements of the Plan or of Section 409A of the Code),
the benefits of the Member shall be paid to the Member in the form of a single
cash lump sum.  Notwithstanding the
foregoing, in the event the benefits of the Member do not exceed $25,000, such
benefits shall be paid in the form of a single lump sum payment to the Member
without regard to the form of payment elected by the Member.  In the event the benefit is not paid in the
normal form, the benefit shall be adjusted from the normal form to the form in
which it is payable under the Plan in the same manner and using the same
assumptions that would be used to convert a benefit to the applicable form
commencing as of the Commencement Date under the Defined Benefit Pension Plan.

 

4.5          Election to Change Form of Payment.  
Prior
to January 1, 2007, a Member may change his/her election of the form of
payment for a Commencement Date by submitting a written election form to the
Plan Administrator; provided such election shall not be effective for a
Commencement Date that is less than 12 months from the date the election form
was received by the Plan Administrator unless it is received at least 30 days
before the Commencement Date and the Plan Administrator, in its sole
discretion, approves the form of payment selected.  Notwithstanding the forgoing, a Member may
not change a form of election on or after January 1, 2006 with respect to
payments that would otherwise be received in 2006 or to cause payments to be
made in 2006.

 

On and after January 1,
2007, a Member may change his/her election of the form of payment for a
Commencement Date by submitting a written election form to the Plan
Administrator; provided

 

(a)           such election shall not be effective
for a Commencement Date on account of Disability that is less than 12 months
from the date the election form was received by the Plan Administrator;

 

(b)           such election shall not be effective
for a Commencement Date on account of a separation from service (other than on
account of Disability) that is less than 5 years from the date the election
form was received by the Plan Administrator.

 

For purposes of this Section 4.5, it shall not be
considered a change in the form of payment to change the form of payment from
one of the annuity forms under (b), (c) or (d) of Section 4.4 to
another of those annuity forms of payment provided that the change is made
before any annuity payment has been made and provided further that the two
annuities are actuarially equivalent using reasonable actuarial assumptions.

 

4.6          Payment to
Beneficiary.  In the
event of the death of the Member before the benefits commence to be paid to the
Member, the benefits of the Member under this Plan shall be paid to the
Beneficiary of the Member in the form of a single cash payment.  The payment shall be paid on the date that is
30 days following the date of death or as soon thereafter as administratively
feasible.  A Member may designate a
Beneficiary on the form prescribed by and delivered to the Plan
Administrator.  If no Beneficiary is
properly designated under this Plan, then the Beneficiary shall be the spouse
of the Member, in any, or if there is no surviving spouse it shall be the
person entitled under the terms of the Defined Benefit Pension Plan to receive
any death benefits that would be payable on account of the Member under the
Defined Benefit Pension Plan as of the date of death of that Member.  If there is no Beneficiary after the
application of the foregoing provisions of this Section, then the payment shall
be made to the estate of the Member.  If
under these rules the benefits are payable to the estate of the Member,
and either the Plan Administrator cannot locate a qualified representative of
the deceased Member’s estate, or if administration of the estate is not
otherwise required, the Plan Administrator in its

 

7

 

discretion may make the distribution to the deceased
Member’s heirs at law, determined in accordance with the law of the State of
the Member’s domicile in effect as of the date of the Member’s death.

 

ARTICLE V

ADMINISTRATION OF THE PLAN

 

5.1          Plan Administration.  The Plan Administrator shall have the full
authority to interpret and construe the Plan and to issue such administrative
procedures as it deems appropriate.  The
Plan Administrator shall have the duty and responsibility of maintaining
records, making the requisite calculations and disbursing the payments
hereunder.  The Plan Administrator’s
interpretations, determinations, regulations and calculations shall be final
and binding on all persons and parties concerned.

 

5.2          Claims Procedure. 
The Plan Administrator shall establish reasonable procedures for the
submission and review of claims with respect to benefits under the Plan.  A copy of the claims procedures for the Plan
shall be available from the Plan Administrator. 
The failure of a claimant to follow the claims procedures with respect
to a claim, including the review procedures, shall result in the loss of the
right to bring an action in court with respect to the claim.

 

5.3          Amendment and Termination.

 

(a)           The Employer may amend or terminate
the Plan as it relates to the employees of that Employer at any time, provided,
however, that no such amendment or termination shall adversely affect the
benefit to which a Member or the Beneficiary of such Member would be entitled
immediately prior to the date of such amendment or termination if the
employment of the Member had then ended unless the Member becomes entitled to
an amount equal to such benefit under another plan or practice of the Employer.
The Plan Administrator may amend this Plan in the place of the Employer so long
as the amendment does not materially increase the cost of the Plan to the
Employer.

 

(b)           During a period beginning April 1,
2005 and ending December 31, 2005, a Member may by written notice to the
Plan Administrator elect to terminate participation in the Plan.  The termination of participation in the Plan
as set forth in the notice shall be effective on the date of the written
notice.  Thereafter the Member shall no
longer accrue any additional benefits under this Plan.  The benefits of the Member shall be
determined as if the Plan had terminated as of the date of the notice and such
benefits shall be paid to the Member in the form of a single cash lump sum
payment on the date that is 60 days of the date of the notice or as soon
thereafter as is administratively feasible.

 

5.4          Payments.  The Employer will pay all benefits arising
under this Plan.  There shall be deducted
from each payment any federal, state or local withholding or taxes or charges
which may be required under applicable law as determined by the Employer.  The benefits hereunder shall not be treated
as compensation from the Employer for purposes of any other benefit plan or
program of the Employer unless specifically designated as compensation in such
other benefit plan or program.

 

5.5          Non-assignability of Benefits.  The benefits payable hereunder or the right
to receive future benefits under the Plan may not be anticipated, alienated,
pledged, encumbered, or subjected to any charge or legal process, and if any attempt
is made to do so, or a person eligible for any benefits becomes bankrupt, the
interest under the Plan of the person affected may be terminated by the

 

8

 

Plan Administrator which, in its sole discretion, may
cause the same to be held or applied for the benefit of one or more of the
dependents of such person or make any other disposition of such benefits that
it deems appropriate.

 

5.6          Status of Plan.  Nothing contained herein shall be construed
as providing for assets to be held in trust or escrow or any other form of
asset segregation for the Member or for any other person or persons to whom
benefits are to be paid pursuant to the terms of this plan, the Member’s only
interest hereunder being the right to receive the benefits set forth
herein.  To the extent any person
acquires a right to receive benefits under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the Employer.

 

5.7          Indemnification.  To the extent permitted by law, the Employer
shall indemnify each member of the Board of Directors and any other employee of
the Employer to whom duties are assigned with respect to this Plan, against
expenses (including any amount paid in settlement) reasonably incurred by
him/her in connection with any claims against him/her by reason of his/her
conduct in the performance of his/her duties under the Plan, except in relation
to matters as to which he/she acted fraudulently or in bad faith in the
performance of such duties.  This right
of indemnification shall be in addition to any other right to which the Board
or other person may be entitled as a matter of law or otherwise, and shall pass
to the estate of a deceased person.

 

5.8          Reports and Records.  The Plan Administrator and those to whom the
Plan Administrator has delegated duties under the Plan shall keep records of
all their proceedings and actions and shall maintain books of account, records,
and other data as shall be necessary for the proper administration of the Plan
and for compliance with applicable law.

 

5.9          Finances.  The costs of the Plan shall be borne by the
Employer.  The rights of the Member (or
of his Beneficiary) to benefits under the Plan shall be solely those of an
unsecured general creditor of the Employer. 
Any assets acquired by or held by the Employer or set aside in a trust
set up by the Employer shall not be deemed to be held as security for the
performance of the obligations of the Employer under this Plan.  Notwithstanding the foregoing, to the extent
under the terms of a trust set up by the Employer payments are made by the
Trustee of said Trust to the Member with respect to benefits under this Plan,
such payments shall satisfy the obligations of the Employer hereunder to the
extent of the payments made.

 

5.10        Nonguarantee of Employment.  Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any Member, or
as a right of any Member to be continued in employment of the Employer, or as a
limitation on the right of the Employer to discharge any of its employees, with
or without cause.

 

5.11        Applicable Law.  All questions pertaining to the construction,
validity and effect of the Plan shall be determined in accordance with the laws
of the United States and to the extent not pre-empted by such laws, by the laws
of the State of Utah.

 

5.12        Headings.  The headings of Sections and Articles in this
Plan are for convenience purposes only and shall in no way control or be used
in the interpretation of the content of the Sections or Articles or this Plan
as a whole.

 

5.13        Number and Gender.  Where the context requires, the singular
shall include the plural and the plural shall include the singular, and any
gender shall include both other genders.

 

9

 

ARTICLE VI

 

TRANSFER OF EMPLOYEES AMONG
AFFILIATED COMPANIES

 

The transfer of a Member
from employment with the Employer to employment with an Affiliate shall not be
deemed a termination of employment under this Plan.  If the Affiliate is an Employer under this
Plan, that Employer shall determine whether the Member shall continue to
participate in this Plan as an employee of that Employer.  For purposes of this Plan, the last Employer
of a Member shall be liable for the Member’s benefits hereunder even though a
portion of the liability is attributable to periods of service for another
Employer.

 

In the event the Member
is transferred to an Affiliate that does not participate in this Plan, the
Member shall cease to participate in this Plan but the former Employer shall
continue to maintain the accounts and benefits of the Member earned under this
Plan until the benefits become payable to the Member hereunder.

 

Adopted this 23rd day of
December, 2005.

 

 

	
   

  	
  HUNTSMAN INTERNATIONAL
  LLC

  
	
   

  	
  for itself and as
  successor in interest by merger to

  
	
   

  	
  HUNTSMAN LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter R. Huntsman

  	
   

  
	
   

  	
  Name:

  	
  Peter
  R. Huntsman

  	
   

  
	
   

  	
  Title:

  	
  President
  and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PARTICIPATING
  EMPLOYERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN PETROCHEMICAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter R. Huntsman

  	
   

  
	
   

  	
  Name:

  	
  Peter
  R. Huntsman

  	
   

  
	
   

  	
  Title:

  	
  President
  and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN PURCHASING,
  LTD

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter R. Huntsman

  	
   

  
	
   

  	
  Name:

  	
  Peter
  R. Huntsman

  	
   

  
	
   

  	
  Title:

  	
  President
  and CEO

  	
   

  
							

 

10

 

Appendix
1

 

SCHEDULE FOR
PARTICIPANTS IN POLYURETHANES EXECUTIVE

PENSION PLAN AND POLYURETHANES EXCESS BENEFIT PLAN

 

In 1999 in connection
with the acquisition of the polyurethanes business of ICI Americas, Inc.,
Huntsman International LLC (“International”) became the sponsor of the
Polyurethanes Executive Pension Plan (the “EPP”) and the Polyurethanes Excess
Benefit Plan (the “Excess Plan”), each a nonqualified pension plan providing
benefits to certain key executives in excess of those that could be provided under
the Polyurethanes Pension Plan, a qualified defined benefit pension plan that
is a spin-off from the ICI Americas, Inc. Pension Plan.

 

Effective July 1,
2004, the Polyurethanes Pension Plan (then known as the Huntsman International
LLC Specialty Chemicals Pension Plan) (the “Polyurethanes DB Plan”) merged into
the Huntsman Defined Benefit Pension Plan and its participants became
participants in the Huntsman Defined Benefit Pension Plan.  International has become a participating
employer in this Plan effective July 1, 2004 in connection with the
transfer of the liabilities of the EPP and the Excess Plan to the Plan pursuant
to a Merger Agreement (the “Merger”). 
With the merger of Huntsman LLC into International on August 16,
2005, International has become the sponsor of the Plan.

 

The following provisions
override any conflicting provisions of the Plan as it applies to participants
in the EPP or the Excess Plan who become participants in the Plan in connection
with the Merger.  Unless otherwise
indicated, terms have the meaning assigned in the Plan.

 

(1)           Eligibility.  The employees of International who were
participating in the EPP or the Excess Plan at the time of the Merger (the “Participants”)
shall be participants in the Plan effective July 1, 2004 subject to the
authority of the President of International to subsequently adjust the status
of any of its employees for purposes of the Plan in accordance with Section 3.9
of the Plan.

 

(2)           Benefits.  The benefits under the Plan of each Participant shall be
determined in accordance with Section 4.1 of the Plan, provided, however,
that the benefit under Section 4.1(a) of the Plan as of July 1,
2004 for a Participant shall be an amount equal to sum of the benefit of the
Participant under the EPP, if any, and the benefit of the Participant under the
Excess Plan, if any, calculated as of July 1, 2004 in each case under the
terms of the applicable plan as it existed immediately before the Merger,
converted into an opening account balance in the same manner and using the same
assumptions as applicable under the Defined Benefit Pension Plan to the
conversion of the accrued benefit of the Participant under the Polyurethanes DB
Plan into an opening account balance in the Defined Benefit Pension Plan as of July 1,
2004, which amount shall be adjusted in the future for interest credits in
accordance with the provisions of Section 4.1(a).

 

(3)           Liability of the Plan.  The benefits of each Participant described in (2) above
shall be an obligation of International under the Plan.  The benefits of each Participant described in
(2) above shall constitute the entire benefit to which each Participant is
entitled under the provisions of the EPP and the Excess Plan.  The EPP and the Excess Benefit Plan shall
cease to exist in connection with the Merger and the Participants shall as of
the Merger cease to have any rights or claims under such plans.  The Participants shall only have the right to
such benefits as set forth in the Plan, including this Appendix 1

 

1

 

to the Plan.  Benefits shall be paid in such form and at
such time as provided in accordance with the terms of the Plan.

 

(4)           Administration. The
Plan Administrator is authorized to interpret this Appendix 1 and to establish such
rules and procedures as it determines necessary or desirable to administer
the Plan with the provisions of this Schedule.

 

2

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