Exhibit 10.1

KRATON POLYMERS US LLC

BENEFITS RESTORATION PLAN

(Amended and Restated Effective as of January 1, 2013)

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KRATON POLYMERS US LLC

BENEFITS RESTORATION PLAN

(Amended and Restated Effective as of January 1, 2013)

TABLE OF CONTENTS

 

         Page   ARTICLE I DEFINITIONS      2   

1.1

 

Account

     2   

1.2

 

Affiliate

     2   

1.3

 

Beneficiary

     2   

1.4

 

Board

     2   

1.5

 

Business Day

     2   

1.6

 

Code

     2   

1.7

 

Committee

     2   

1.8

 

Company

     2   

1.9

 

Company Contributions

     2   

1.10

 

Company Enhanced Contributions

     2   

1.11

 

Company Enhanced Contribution Percentage

     2   

1.12

 

Company Matching Contributions

     3   

1.13

 

Company Matching Contribution Percentage

     3   

1.14

 

Compensation

     3   

1.15

 

Deferral Contributions

     3   

1.16

 

Deferral Election

     3   

1.17

 

Effective Date

     3   

1.18

 

Eligible Compensation

     3   

1.19

 

Eligible Employee

     3   

1.20

 

Employee

     3   

1.21

 

ERISA

     3   

1.22

 

Investment Election

     4   

1.23

 

Investment Funds

     4   

1.24

 

Maximum Deferral Percentage

     4   

1.25

 

Participant

     4   

1.26

 

Participating Company

     4   

1.27

 

Plan

     4   

1.28

 

Plan Year

     4   

1.29

 

Prior Plan

     4   

1.30

 

Prior Plan Contributions

     4   

1.31

 

Savings Plan

     4   

1.32

 

Separation from Service

     4   

1.33

 

Valuation Date

     4    ARTICLE II ELIGIBILITY AND PARTICIPATION      5   

2.1

 

Eligibility

     5   

2.2

 

Deferral Election

     5   

2.3

 

Cessation of Active Participation

     6   

 

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ARTICLE III PARTICIPANT ACCOUNTS AND CREDITING      7   

3.1

 

Participant Accounts

     7   

3.2

 

Deferral Contributions and Company Matching Contributions

     7   

3.3

 

Company Enhanced Contributions

     8   

3.4

 

Crediting of Earnings, Gains and Losses

     8   

3.5

 

Value of Account

     8   

3.6

 

Good Faith Valuation Binding

     8    ARTICLE IV INVESTMENT FUNDS      9   

4.1

 

Selection by Committee

     9   

4.2

 

Participant Direction of Deemed Investments

     9    ARTICLE V VESTING AND DISTRIBUTION OF ACCOUNT BALANCES      10   

5.1

 

Vesting

     10   

5.2

 

Distribution of Account Balance

     10   

5.3

 

Prior Plan Contributions

     10   

5.4

 

Beneficiary Designation

     10   

5.5

 

Taxes

     11   

5.6

 

Errors and Omissions in Accounts

     11   

5.7

 

Acceleration of Benefits

     11    ARTICLE VI CLAIMS      12   

6.1

 

Rights

     12   

6.2

 

Procedure

     12   

6.3

 

Appeal

     12   

6.4

 

Satisfaction of Claims

     12   

6.5

 

Limitations

     13    ARTICLE VII SOURCE OF FUNDS; TRUST      14   

7.1

 

Source of Funds

     14   

7.2

 

Trust

     14    ARTICLE VIII EMPLOYEE BENEFITS COMMITTEE      15   

8.1

 

Action

     15   

8.2

 

Rights and Duties

     15   

8.3

 

Compensation, Indemnity and Liability

     16   

8.4

 

Designation of Participating Companies

     16    ARTICLE IX AMENDMENT AND TERMINATION      17   

9.1

 

Amendments

     17   

9.2

 

Termination of the Plan

     17    ARTICLE X MISCELLANEOUS      18   

10.1

 

Taxation

     18   

10.2

 

No Employment Contract

     18   

10.3

 

Headings

     18   

10.4

 

Gender and Number

     18   

 

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10.5

 

Successors

     18   

10.6

 

Assignment of Benefits

     18   

10.7

 

Entire Plan

     18   

10.8

 

Legally Incompetent

     19   

10.9

 

Notice

     19   

10.10

 

Governing Law

     19   

APPENDIX A

 

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KRATON POLYMERS US LLC

BENEFITS RESTORATION PLAN

(Amended and Restated Effective as of January 1, 2013)

Effective as of the 1st day of January, 2013, Kraton Polymers US LLC, a Delaware
limited liability company (the “Company”), hereby amends and restates the Kraton
Polymers U.S. LLC Deferred Compensation and Restoration Plan and renames the
plan the Kraton Polymers US LLC Benefits Restoration Plan (the “Plan”).

BACKGROUND AND PURPOSE

A. Background. Effective as of January 1, 2002, the Company established the Plan
to provide key management employees an opportunity to (i) elect to defer a
portion of their compensation and (ii) receive employer matching contributions
and employer enhanced contributions to the extent that such contributions cannot
be made for such employees under the KRATON Savings Plan of KRATON Polymers U.S.
LLC (the “Savings Plan”), a plan qualified under Sections 401(a) and 401(k) of
the Internal Revenue Code of 1986, as amended (the “Code”), due to certain Code
limits that apply to Savings Plan contributions and benefits (“Employer
Contributions”).

B. Purpose. The Company desires to amend and restate the Plan, effective as of
January 1, 2013, to allow its designated key management employees an opportunity
to (i) elect to defer a portion of their compensation in excess of the
compensation limit under Code Section 401(a)(17), as such limit is adjusted for
cost-of-living increases, and (ii) receive Employer Contributions based on their
compensation in excess of such compensation limit.

C. Type of Plan. The Plan constitutes an unfunded, nonqualified deferred
compensation plan that benefits certain designated employees who are within a
select group of key management or highly compensated employees. The Plan is
intended to qualify for the exemptions provided under Title I of the Employee
Retirement Income Security Act of 1974, as amended, for plans that are not
tax-qualified and that are maintained primarily to provide deferred compensation
for a select group of management or highly compensated employees.

 

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ARTICLE I

DEFINITIONS

For purposes of the Plan, the following terms, when capitalized, shall have the
meanings set forth below unless a different meaning plainly is required by the
context.

1.1 Account shall mean, with respect to a Participant or Beneficiary, the total
dollar amount or value evidenced by the last balance posted in accordance with
the terms of the Plan to the account established for such Participant or
Beneficiary. Separate sub-accounts attributable to Deferral Contributions,
Company Matching Contributions and Company Enhanced Contributions (if any) made
for each Plan Year will be maintained within the Participant’s Deferral
Contribution Account, Company Matching Contribution Account and Company Enhanced
Contribution Account. Separate sub-accounts attributable to Prior Plan
Contributions, if any, and the earnings, gains and losses attributable thereto,
will be maintained within a Participant’s or Beneficiary’s Account, as
applicable.

1.2 Affiliate shall mean (i) any corporation or other entity that is required to
be aggregated with the Company under Code Section 414(b), (c), (m) or (o), and
(ii) any other entity in which the Company has an ownership interest and which
the Company designates as an Affiliate for purposes of the Plan.

1.3 Beneficiary shall mean such natural person or persons or the trustee of an
inter vivos trust for the benefit of natural persons entitled to benefits
hereunder following a Participant’s death.

1.4 Board shall mean the Board of Directors of the Company.

1.5 Business Day shall mean any day other than a Saturday, Sunday or any day
other than days on which the New York Stock Exchange is closed for business.

1.6 Code shall mean the Internal Revenue Code of 1986, as amended.

1.7 Committee shall mean the Employee Benefits Committee or such other committee
appointed by the Board to act as administrator of the Plan and to perform the
duties described in Article VIII.

1.8 Company shall mean Kraton Polymers US LLC, a Delaware limited liability
company, and its successors.

1.9 Company Contributions shall mean Company Matching Contributions and/or
Company Enhanced Contributions.

1.10 Company Enhanced Contributions shall mean the contributions made by the
Company as described in Section 3.3.

1.11 Company Enhanced Contribution Percentage for each Plan Year, shall mean the
enhanced employer contribution formula under the Savings Plan as applicable with
respect to a Participant under the terms of the Savings Plan, as in effect on
the first day of the applicable Plan Year.

 

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1.12 Company Matching Contributions shall mean the contributions made by the
Company as described in Section 3.2(b).

1.13 Company Matching Contribution Percentage for each Plan Year, shall mean the
employer matching contribution percentage (within the meaning of Code
Section 401(m)) as in effect under the Savings Plan on the first day of the
applicable Plan Year.

1.14 Compensation for each Plan Year, shall mean wages, as defined in Code
Section 3401(a), and all other compensation paid by a Participating Company to
an Employee (and as reported as required under Code Sections 6041(d) and
6051(a)(3)), excluding amounts paid for overtime, commissions, severance
payments, bonuses, the value of any qualified or non-qualified stock options to
the extent such option is includable in gross income, reimbursements or other
expense allowances, fringe benefits (cash and non-cash), moving expenses,
deferred compensation and welfare benefits, but including amounts that are not
includable in the gross income of the Employee under Code Section 125,
132(f)(4), 402(e)(3), 402(h) or 403(b), and shall be determined without regard
to any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed.

1.15 Deferral Contributions shall mean a portion of a Participant’s Eligible
Compensation that is deferred under the Plan pursuant to Section 3.2(a).

1.16 Deferral Election shall mean a written, electronic or other form of
election prescribed by the Committee pursuant to which a Participant elects to
make Deferral Contributions as provided in Article II.

1.17 Effective Date shall mean January 1, 2013.

1.18 Eligible Compensation shall mean the portion of a Participant’s
Compensation that is not eligible compensation under the Savings Plan due to the
compensation limit under Code Section 401(a)(17), as such limit is adjusted for
cost-of-living increases, for a Plan Year.

1.19 Eligible Employee shall mean, for a Plan Year, an Employee who (i) is
within a select group of key management or highly compensated employees and
(ii) is selected for participation in the Plan by the Committee.

1.20 Employee shall mean an employee of a Participating Company who is a U.S.
citizen (including an expatriate) or U.S. resident.

1.21 ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

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1.22 Investment Election shall mean an election, made in such form as the
Committee may direct, pursuant to which a Participant may elect the Investment
Funds in which the amounts credited to his or her Account shall be deemed to be
invested.

1.23 Investment Funds shall mean the investment funds available under the
Savings Plan and/or such other investment funds that may be selected from time
to time by the Committee for purposes of determining the rate of return on
amounts deemed invested pursuant to the terms of the Plan.

1.24 Maximum Deferral Percentage shall mean the maximum percentage (in effect as
of the first day of a Plan Year) of a Participant’s eligible compensation under
the Savings Plan for which the Participant will receive employer matching
contributions under the Savings Plan.

1.25 Participant shall mean an Eligible Employee who participates in the Plan
pursuant to the provisions of Article II or a person who otherwise has an
Account under the Plan.

1.26 Participating Company shall mean the Company and its Affiliates that are
designated by the Committee as Participating Companies as described in
Section 8.4 and set forth on Appendix A of the Plan.

1.27 Plan shall mean the Kraton Polymers US LLC Benefits Restoration Plan,
amended and restated effective as of January 1, 2013, as amended thereafter from
time to time.

1.28 Plan Year shall mean the 12-month period ending on December 31st of each
year.

1.29 Prior Plan shall mean the Kraton Polymers U.S. LLC Deferred Compensation
and Restoration Plan, as in effect immediately prior to January 1, 2013.

1.30 Prior Plan Contributions shall mean amounts contributed to the Prior Plan
by individuals or Participating Companies for services provided to Participating
Companies prior to January 1, 2013.

1.31 Savings Plan shall mean the KRATON Savings Plan of KRATON Polymers U.S. LLC
as in effect from time to time.

1.32 Separation from Service shall mean a “separation from service” within the
meaning of Code Section 409A(a)(2)(A)(i) and Treasury Regulation § 1.409A-1(h)
(or any successor regulations or guidance thereto), including separation due to
death.

1.33 Valuation Date shall mean each Business Day; provided, however, that the
value of an Account on a day other than a Business Day shall be the value
determined for the immediately preceding Business Day.

 

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ARTICLE II

ELIGIBILITY AND PARTICIPATION

2.1 Eligibility.

(a) Annual Participation. Prior to the beginning of each Plan Year, the
Committee or its designee shall designate the Eligible Employees who are
eligible to receive Company Contributions for such Plan Year; provided, however,
that in order to receive Company Matching Contributions for a Plan Year, an
Eligible Employee must satisfy the Deferral Election procedures described in
Section 2.2. Such designated Eligible Employees who receive Company
Contributions shall be Participants in the Plan.

(b) Interim Plan Year Participation. An Employee who (i) first becomes eligible
to participate in the Plan during a Plan Year and (ii) is designated by the
Committee an Eligible Employee within 30 days of the date the Employee first
becomes eligible to participate in the Plan shall be eligible to participate in
the Plan for the remainder of such Plan Year, as determined by the Committee, in
its discretion; provided, however, that such Employee is not otherwise eligible
for, or a participant in, a “plan” which is aggregated with the Plan for
purposes of Code Section 409A and otherwise satisfies the requirements of
Treasury Regulation § 1.409A-2(a)(7). With respect to Company Enhanced
Contributions, such individual shall be a Participant as of the date designated
by the Committee; provided, however, that in all events such date is within 30
days following the date the Employee first becomes an Eligible Employee. Such
individual shall be eligible to receive Company Matching Contributions if he or
she satisfies the Deferral Election procedures described in Section 2.2;
provided, however, that in all events such procedures must be satisfied within
30 days following the date the Employee first becomes an Eligible Employee. For
purposes of this Section 2.1(b), such Participant’s Company Contributions shall
only apply with respect to Eligible Compensation earned after such designation
and election, as applicable.

2.2 Deferral Election. In order for an Eligible Employee to make Deferral
Contributions for a Plan Year (or interim Plan Year as provided in
Section 2.1(b)), the Eligible Employee shall complete the Deferral Election,
indicating the portion of the Eligible Employee’s Eligible Compensation to be
deferred for the Plan Year, and such other forms, as may be prescribed by the
Committee prior to January 1st of such Plan Year or such earlier date as
required by the Committee (or, in the case of an interim Plan Year, within the
30-day period described in Section 2.1(b)). The Deferral Election and/or such
forms may also include the Eligible Employee’s acceptance of the terms and
conditions of the Plan and the designation of a Beneficiary in accordance with
the terms of the Plan to receive any death benefits payable hereunder. The
Deferral Election of a Participant who is an Eligible Employee for a portion of
a Plan Year pursuant to Section 2.1(b) shall be effective only with respect to
Eligible Compensation paid for services to be performed after such election is
made and the procedures described in this Section 2.2 are satisfied. An Eligible
Employee who fails to timely satisfy the procedures described in this
Section 2.2 shall not be eligible to make Deferral Contributions and receive
Company Matching Contributions thereon for such Plan Year. Except as provided
below, a Participant’s Deferral Election shall be effective only for the Plan
Year for which is applied and shall automatically terminate at the end of such
Plan Year. If the Participant is an

 

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Eligible Employee for a subsequent Plan Year, he or she must timely make another
Deferral Election for such subsequent Plan Year. The foregoing notwithstanding,
the Committee may cancel a Participant’s Deferral Election after the beginning
of a Plan Year for which it applies for the remainder of such Plan Year if the
Committee determines that the Participant has incurred an Unforeseeable
Emergency, within the meaning of Treasury Regulation § 1.409A-3(i)(3)(i) (or any
successor regulations or guidance thereto), in accordance with Treasury
Regulation § 1.409A-3(j)(4)(viii) (or any successor regulations or guidance
thereto), with such cancellation to apply to Eligible Compensation not earned as
of the effective date of the cancellation of the Deferral Election.

2.3 Cessation of Active Participation. A Participant who ceases to be an
Employee shall cease to be eligible to make or receive any contributions under
the Plan as of his or her Separation from Service date. The Committee may remove
an Employee from active Participant status for any subsequent Plan Year at any
time prior to the first day of such Plan Year (which includes the Committee not
designating the Participant as an Eligible Employee for such Plan Year). If a
Participant’s active participation in the Plan ends, such Participant shall
remain an inactive Participant in the Plan until the earlier of (i) the date the
full amount of his or her Account is distributed from the Plan, or (ii) the date
he or she again becomes an Eligible Employee and recommences participation in
the Plan as an active Participant. During the period of time that a person is an
inactive Participant in the Plan, his or her Account shall continue to be
credited with earnings, gains and losses as provided in Section 3.4.

 

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ARTICLE III

PARTICIPANT ACCOUNTS AND CREDITING

3.1 Participant Accounts.

(a) Establishment of Accounts. The Committee shall establish and maintain an
Account on behalf of each Participant. To the extent provided herein, each
Participant’s Account shall be credited with Deferral Contributions, Company
Matching Contributions and Company Enhanced Contributions, along with the
earnings, gains and losses attributable to such amounts based upon the
Participant’s Investment Elections, and shall be debited by the amount of all
distributions under the Plan. Each Participant’s Account shall be maintained
until the value thereof has been distributed to or on behalf of such Participant
or his or her Beneficiary.

(b) Nature of Contributions and Accounts. The amounts credited to a
Participant’s Account shall be represented solely by bookkeeping entries. No
monies or other assets shall actually be set aside for such Participant, and all
payments to a Participant under the Plan shall be made from the general assets
of the Company, except as may be provided under Section 7.2.

(c) General Creditors. Any assets which may be acquired by the Company in
anticipation of its obligations under the Plan shall be part of the general
assets of the Company. The Company’s obligation to pay benefits under the Plan
constitutes a mere promise of the Company to pay such benefits, and a
Participant or Beneficiary shall be and remain no more than an unsecured,
general creditor of the Company (and of the Participating Companies).

3.2 Deferral Contributions and Company Matching Contributions.

(a) If a Participant makes a timely Deferral Election for a Plan Year as
provided in Article II, then for such Plan Year the Participant may elect to
make Deferral Contributions that reduce his or her Eligible Compensation by a
specified percentage (in whole percentages) of between 1% and the Participant’s
Maximum Deferral Percentage and the Company will credit such Deferral
Contributions to the Participant’s Deferral Contribution Account. Except as
otherwise provided in this Section 3.2, the Deferral Election shall be effective
to defer Eligible Compensation relating to services performed in the Plan Year
beginning after the Plan Year in which the Participant executes his or her
election. Except as provided in Section 2.2, a Participant’s election to make
Deferral Contributions shall be irrevocable as of December 31st of the Plan Year
immediately prior to the applicable Plan Year or such earlier date as prescribed
by the Committee.

(b) For each Plan Year that a Participant elects to make Deferral Contributions,
the Company shall credit Company Matching Contributions to a Participant’s
Company Matching Contribution Account in an amount equal to the product of
(i) the Participant’s Deferral Contributions elected in subsection (a) above for
the Plan Year, multiplied by (ii) the Company Matching Contribution Percentage
in effect for the Plan Year; provided, however, that such Participant is an
Employee as of the date the contribution is credited to his or her Account.

 

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3.3 Company Enhanced Contributions. For each Plan Year, the Company shall credit
Company Enhanced Contributions to a Participant’s Company Enhanced Contribution
Account in an amount, if any, equal to the product of (i) Participant’s Eligible
Compensation for the Plan Year; multiplied by (ii) the Participant’s Company
Enhanced Contribution Percentage; provided, however, that such Participant is an
Employee as of the date the contribution is credited to his or her Account.

3.4 Crediting of Earnings, Gains and Losses. Each Participant’s Account shall be
credited with earnings, gains and/or losses based upon Investment Elections made
by the Participant in accordance with Article IV and any investment procedures
adopted by the Committee.

3.5 Value of Account. The value of a Participant’s Account as of any date shall
be equal to the aggregate value of all contributions and all investment
earnings, gains and losses deemed credited to his or her Account as of the
Valuation Date coinciding with or immediately preceding such date, less any
amounts distributed since the preceding Valuation Date, determined in accordance
with this Article III. As of each Valuation Date, the Committee shall debit each
Participant’s Account for any amount distributed from such Account since the
immediately preceding Valuation Date.

3.6 Good Faith Valuation Binding. In determining the value of the Accounts, the
Committee shall exercise its best judgment, and all such determinations of value
(in the absence of bad faith) shall be binding upon all Participants and their
Beneficiaries.

 

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ARTICLE IV

INVESTMENT FUNDS

4.1 Selection by Committee. The Committee shall select the Investment Funds for
purposes of determining the rate of return on amounts in the Participants’
Accounts deemed invested in accordance with the terms of the Plan. The
Committee, in its sole discretion, may change, add or remove Investment Funds on
a prospective basis at any time and in any manner it deems appropriate (and
without notice).

4.2 Participant Direction of Deemed Investments. Each Participant generally may
direct the manner in which his or her Account shall be deemed invested in and
among the Investment Funds. Any Participant investment directions permitted
hereunder shall be made in accordance with the following terms:

(a) Nature of Participant Direction. The selection of Investment Funds by a
Participant shall be for the sole purpose of determining the rate of return to
be credited to his or her Account, and shall not be treated or interpreted in
any manner whatsoever as a requirement or direction to actually invest assets in
any Investment Fund or any other investment media. The Plan, as an unfunded,
nonqualified deferred compensation plan, at no time shall have any actual
investment of assets relative to the benefits or Accounts hereunder.

(b) Investment of Contributions. Each Participant may make an Investment
Election prescribing the percentage of his or her existing Account or the future
contributions thereto that will be deemed invested in each Investment Fund. An
initial Investment Election of a Participant shall be made as of the date the
Participant commences participation in the Plan and shall apply to all
contributions credited to such Participant’s Account after such date. A
Participant may make subsequent Investment Elections as of any Valuation Date,
and each such election shall apply to the Participant’s existing Account or all
future contributions credited to the Participant’s Account, as elected by the
Participant, after the Committee has a reasonable opportunity to process the
election pursuant to such procedures as the Committee may determine from time to
time. Subject to the provisions of Section 4.1, an Investment Election made
pursuant to this subsection shall remain effective until changed by the
Participant. If a Participant fails to make an Investment Election (or fails to
make a valid or complete Investment Election), then the amounts contributed to
the Participant’s Account will be deemed invested in the default Investment
Fund(s).

(c) Committee’s Administrative Discretion. The Committee shall have complete
discretion to adopt and revise procedures to be followed in making Investment
Elections. Such procedures may include, but are not limited to, the process of
making elections, the permitted frequency of making elections, the incremental
size of elections, the contribution types to which such elections apply, the
deadline for making elections and the effective date of such elections. Any
procedures adopted by the Committee that are inconsistent with the deadlines or
procedures specified in this Section 4.2 shall supersede such provisions of this
Section without the necessity of a Plan amendment.

 

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ARTICLE V

VESTING AND DISTRIBUTION OF ACCOUNT BALANCES

5.1 Vesting. A Participant shall at all times be fully vested in his or her
Deferral Contributions, Company Matching Contributions and Company Enhanced
Contributions, and the earnings, gains and losses attributable thereto credited
to his or her Account with respect to such contributions.

5.2 Distribution of Account Balance. Except as provided in Section 5.3 regarding
a Participant’s Prior Plan Contributions (and the earnings, gains and losses
attributable thereto), a Participant’s entire Account balance shall be paid in
cash in a lump sum payment to the Participant (or, in the event of the
Participant’s death, his or her Beneficiary) on the date that is 183 days after
the date of the Participant’s Separation from Service.

5.3 Prior Plan Contributions.

(a) Prior Plan Provisions Continue to Apply. A Participant’s Prior Plan
Contributions (and the earnings, gains and losses attributable thereto) shall
continue to be subject to the terms and conditions of the Prior Plan as in
effect at the time such amounts were contributed, including, but not limited to,
the applicable Prior Plan distribution timing and form of payment provisions.

(b) Delay of Distribution to Specified Employees. Notwithstanding any Prior Plan
provision to the contrary, in the case of a Participant who has been identified
by the Committee, in its sole discretion, as a “specified employee” within the
meaning of Code Section 409A(a)(2)(B)(i) as of the date of his or her Separation
from Service, a distribution paid under the Plan by reason of the Participant’s
Separation from Service (other than due to death) that would be paid during the
six-month period commencing after such Participant’s date of Separation from
Service shall be delayed until the date that is the earlier of (i) 183 days
after the date the Participant has incurred a Separation from Service or
(ii) the date of the Participant’s death. Payments delayed pursuant to this
Section 5.3(b) shall be paid without interest for such delay in payment, but
such Prior Plan Contributions shall continue to be adjusted for earnings, gains
and losses attributable thereto during such delay period based on the
Participant’s investment direction.

5.4 Beneficiary Designation.

(a) General. A Participant shall designate to the Committee, in the form and
manner prescribed by the Committee, the Beneficiary or Beneficiaries to receive
his or her Account balance following his or her death, and the Participant may
at any time change or cancel any such designation by filing a request in the
form and manner prescribed by the Committee.

(b) No Designation. In the event of the death of any Participant, the entire
amount in the Account of such Participant shall be distributed to the
Participant’s Beneficiary, or if there is no Beneficiary, payment will be made
to the executor or legal representative of the Participant’s estate. If the
Beneficiary does not predecease the Participant, but dies prior to distribution
of the Participant’s entire benefit, the remaining benefit will be paid to the
executor or legal representative of the Beneficiary’s estate.

 

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5.5 Taxes. If the whole or any part of any Participant’s or Beneficiary’s
benefit hereunder shall become subject to any estate, inheritance, income,
employment or other tax which the Participating Company shall be required to pay
or withhold, the Participating Company shall have the full power and authority
to withhold and pay such tax out of any monies or other property held for the
account of the Participant or Beneficiary whose interests hereunder are so
affected (including, without limitation, by reducing and offsetting the
Participant’s or Beneficiary’s Account balance). Prior to making any payment,
the Participating Company may require such releases or other documents from any
lawful taxing authority as it shall deem necessary.

5.6 Errors and Omissions in Accounts. If an error or omission is discovered in
the Account of a Participant or Beneficiary, the Committee, in its sole
discretion, shall cause appropriate, equitable adjustments to be made as soon as
administratively practicable following the discovery of such error or omission.

5.7 Acceleration of Benefits. Notwithstanding any other provision of the Plan to
the contrary, in no event shall the Plan permit the acceleration of the time or
schedule of any payment or distribution under the Plan, except that the
Committee may accelerate a payment or distribution under the Plan as follows:

(i) to fulfill a domestic relations order, as provided in Treasury Regulation §
1.409A-3(j)(4)(ii) (or any successor regulations or guidance thereto);

(ii) to comply with a certificate of divestiture, as provided in Treasury
Regulation § 1.409A-3(j)(4)(iii) (or any successor regulations or guidance
thereto); or

(iii) to pay employment taxes on such deferred compensation, as provided in
Treasury Regulation § 1.409A-3(j)(4)(vi) (or any successor regulations or
guidance thereto).

 

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ARTICLE VI

CLAIMS

6.1 Rights. If a Participant or Beneficiary has any grievance, complaint or
claim concerning any aspect of the operation or administration of the Plan,
including, but not limited to, claims for benefits, the Participant or
Beneficiary shall submit the claim in accordance with the procedures set forth
in this Article VI.

6.2 Procedure. Claims for benefits under the Plan may be filed in writing with
the Committee on a form or in such other written documents as the Committee may
prescribe. The Committee shall furnish to the claimant written notice of the
disposition of a claim within 90 days after the claim therefor is filed;
provided, however, that if special circumstances require an extension of time
for processing the claim, the Committee shall furnish written notice of the
extension to the claimant prior to the end of the initial 90-day period, and
such extension shall not exceed one additional, consecutive 90-day period. In
the event the claim is denied, the notice of the disposition of the claim shall
provide the specific reasons for the denial, citations of the pertinent
provisions of the Plan, an explanation as to how the claimant can perfect the
claim and/or submit the claim for review (where appropriate), and a statement of
the claimant’s right to bring a civil action under ERISA pursuant to mandatory
arbitration following an adverse determination on review.

6.3 Appeal. Any Participant or Beneficiary who has been denied a benefit shall
be entitled, upon request to the Committee, to appeal the denial of his or her
claim. The claimant (or his or her duly authorized representative) may review
pertinent documents related to the Plan and in the Committee’s possession in
order to prepare the appeal. The request for review, together with a written
statement of the claimant’s position, must be filed with the Committee no later
than 60 days after receipt of the written notification of denial of a claim
provided above. The Committee’s decision shall be made within 60 days following
the filing of the request for review and shall be communicated in writing to the
claimant; provided, if special circumstances require an extension of time for
processing the appeal, the Committee shall furnish written notice of the
extension to the claimant prior to the end of the initial 60-day period, and
such extension shall not exceed one additional 60-day period. If unfavorable,
the notice of the decision shall explain the reasons for denial, indicate the
provisions of the Plan or other documents used to arrive at the decision and
state the claimant’s right to bring a civil action under ERISA.

6.4 Satisfaction of Claims. Any payment to a Participant or Beneficiary, all in
accordance with the provisions of the Plan, shall to the extent thereof be in
full satisfaction of all claims hereunder against the Committee and all
Participating Companies, any of which may require such Participant or
Beneficiary as a condition to such payment to execute a receipt and release
therefor in such form as shall be determined by the Committee or the
Participating Companies. If a receipt and release is required and the
Participant or Beneficiary (as applicable) does not provide such receipt and
release in a timely enough manner to permit a timely distribution in accordance
with the general timing of distribution provisions in the Plan, the payment of
any affected distribution(s) may be delayed until the Committee or the
Participating Companies receives a proper receipt and release.

 

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6.5 Limitations. Benefits under the Plan will be paid only if the Committee
decides in its discretion that a Participant or Beneficiary is entitled to
benefits. Notwithstanding the foregoing or any provision of the Plan or the
Prior Plan to the contrary, a Participant must exhaust all administrative
remedies set forth in this Article VI or otherwise established by the Committee
before bringing any action at law or equity. Any claim based on a denial of a
claim under the Plan or the Prior Plan must be brought no later than the date
which is two years after the date of the final denial of a claim under
Section 6.3. Any claim not brought within such time shall be waived and forever
barred.

 

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ARTICLE VII

SOURCE OF FUNDS; TRUST

7.1 Source of Funds. Except as provided in Section 7.2 relating to the
establishment of a trust (“Trust”), the Company shall provide the benefits
described in the Plan from its general assets. To the extent that funds in a
Trust allocable to the benefits payable under the Plan are sufficient, the Trust
assets may be used to pay benefits under the Plan. If such Trust assets are not
sufficient to pay all benefits due under the Plan, then the Company shall have
the obligation, and the Participant or Beneficiary who is due such benefits
shall look to the Company to provide such benefits. Notwithstanding the
foregoing, the Company, in its sole discretion, shall have the authority to
allocate the total liability to pay benefits under the Plan among the
Participating Companies in such manner and amounts as it deems appropriate.

7.2 Trust. If the Company and a trustee (the “Trustee”) entered into an
agreement (the “Trust Agreement”) to establish the Trust, the following
provisions shall apply:

(a) Establishment. The Company shall transfer the funds necessary to fund
benefits accrued hereunder to the Trustee to be held and administered by the
Trustee pursuant to the terms of the Trust Agreement. Except as otherwise
provided in the Trust Agreement, each transfer into the Trust Fund shall be
irrevocable as long as the Company has any liability or obligations under the
Plan to pay benefits, such that the Trust property is in no way otherwise
subject to use by the Company; provided, it is the intent of the Company that
the assets held by the Trust are and shall remain at all times subject to the
claims of the general creditors of the Company.

(b) Distributions. Pursuant to the Trust Agreement, the Trustee shall make
payments to Participants and Beneficiaries in accordance with a payment schedule
provided by the Company. The Company shall make provisions for the reporting and
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
Plan and shall pay amounts withheld to the appropriate taxing authorities.

(c) Status of the Trust. No Participant or Beneficiary shall have any interest
in the assets held by the Trust or in the general assets of the Company (or the
Participating Companies) other than as a general, unsecured creditor.
Accordingly, the Company shall not grant a security interest in the assets held
by the Trust in favor of the Participants, Beneficiaries or any creditor.

 

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ARTICLE VIII

EMPLOYEE BENEFITS COMMITTEE

8.1 Action. The Committee shall be organized and shall take action in a manner
provided under the Committee’s Charter or By-Laws or such other rules as may
from time to time be adopted by or for the Committee.

8.2 Rights and Duties. The Committee shall administer the Plan and shall have
all the powers necessary to accomplish that purpose, including (but not limited
to) the following:

(a) To construe, interpret and administer the Plan;

(b) To make determinations required by the Plan, including the eligibility of
any person to participate in the Plan, and to maintain records regarding
Participants’ and Beneficiaries’ benefits hereunder;

(c) To compute and certify to each Participating Company the amount and kinds of
benefits payable to Participants and Beneficiaries, and to determine the time
and manner in which such benefits are to be paid;

(d) To determine the person or persons to whom such benefits will be paid;

(e) To authorize all disbursements by each Participating Company pursuant to the
Plan;

(f) To maintain all the necessary records of the administration of the Plan;

(g) To make and publish such rules as it deems necessary or proper for the
efficient administration of the Plan as are not inconsistent with the terms
hereof;

(h) To have all powers elsewhere conferred upon it;

(i) To appoint a Trustee hereunder;

(j) By written instrument, to allocate and delegate its responsibilities,
including to any other committee, individuals, or entities from time to time,
the performance of any of its duties or responsibilities hereunder;

(k) To administer the claims and review procedures specified in Article VI; and

(l) To hire agents, accountants, actuaries, consultants and legal counsel to
assist in operating and administering the Plan.

The Committee shall have the exclusive right to construe and interpret the Plan,
to decide all questions of eligibility for benefits and to determine the amount
of such benefits, and its decisions on such matters shall be final and
conclusive on all Participants, Beneficiaries and other parties.

 

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8.3 Compensation, Indemnity and Liability. The Committee and its members shall
serve as such without bond and without compensation for services hereunder. All
expenses of the Committee shall be paid by the Participating Companies. No
member of the Committee shall be liable for any act or omission of any other
member of the Committee, or for any act or omission on his or her own part,
excepting his or her own willful misconduct. Without limiting the generality of
the foregoing, any such decision or action taken by the Committee in reliance
upon any information supplied to it by an officer of the Company, the Company’s
legal counsel, or the Company’s independent accountants in connection with the
administration of the Plan shall be deemed to have been taken in good faith. The
Participating Companies shall indemnify and hold harmless the Committee and each
member from and against any and all damages, losses, expenses and liabilities,
including reasonable legal fees and expenses, arising out of his or her
membership on the Committee and administration of the Plan, except to the extent
that the effects and consequences of such personal acts, omissions or conduct
result from willful misconduct.

Moreover, each Participant, by executing a participation form and becoming a
Participant hereunder, acknowledges and agrees to indemnify and hold harmless
the Committee, its members and the Participating Companies from and against any
and all damages, losses, expenses and liabilities, including reasonable legal
fees and expenses, arising from third-party claims or disputes related to or
involving the Participant’s interest in the Plan (including, without limitation,
tax liens and levies, creditors’ claims, garnishment and bankruptcy proceedings,
and proceedings in domestic relations), except to the extent that the effects
and consequences of such personal acts, omissions or conduct result from willful
misconduct.

8.4 Designation of Participating Companies. The Committee may designate any
Affiliate as a Participating Company by written instrument delivered to the
Company, the Trustee (if any), and the designated Affiliate, with such
Participating Companies set forth on Appendix A of the Plan. Such written
instrument shall specify the effective date of such designated participation and
shall become, as to such designated Affiliate and its employees, a part of the
Plan. Each designated Affiliate shall be conclusively presumed to have consented
to its designation and to have agreed to be bound by the terms of the Plan and
any and all amendments thereto with respect to its Eligible Employees and
Participants upon its submission of information to the Committee required by the
terms of or with respect to the Plan or upon making a contribution pursuant to
the terms of the Plan. Each designated Affiliate shall authorize and designate
the Company as its agent to act for it in all transactions affecting the
administration of the Plan and shall authorize and designate the Committee to
act for such Affiliate and its Eligible Employees and Participants in the same
manner in which the Committee may act for the Company and its Eligible Employees
and Participants hereunder. The Committee may revoke the designation of any
Affiliate as a Participating Company by written instrument delivered to the
Company, the Trustee (if any), and the designated Affiliate (and Appendix A
shall be amended to reflect the same), with such revocation effective as
provided in such written instrument (and consistent with Code Section 409A). On
and after the effective date of such revocation, the Affiliate’s employees shall
no longer be Eligible Employees and thus not be permitted to be active
Participants under the Plan. Unless the Committee expressly provides otherwise,
if a Participant Company ceases to be an Affiliate, such Affiliate shall
automatically cease to be a Participating Company without any action required by
the Committee.

 

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ARTICLE IX

AMENDMENT AND TERMINATION

9.1 Amendments. The Board shall have the right to amend the Plan in whole or in
part at any time. Any amendment shall be in writing and executed by a duly
authorized officer of the Company. An amendment to the Plan may modify its terms
in any respect whatsoever, and may include, without limitation, a permanent or
temporary freezing of the Plan such that the Plan shall remain in effect with
respect to existing Account balances without permitting any new contributions;
provided, however, that no such action may reduce the amount already credited to
a Participant’s or Beneficiary’s Account without the affected Participant’s or
Beneficiary’s written consent.

9.2 Termination of the Plan. The Company reserves the right to discontinue and
terminate the Plan at any time and for any reason. Any action to terminate the
Plan shall be taken by the Board in the form of a written Plan amendment
executed by a duly authorized officer of the Company. In the event of a
termination of the Plan, unpaid benefits shall continue to be an obligation of
the Company and, unless otherwise expressly provided by resolution of the Board,
shall be paid as scheduled and in all events in a manner consistent with the
requirements of Code Section 409A. If the Plan is terminated and the Board
expressly provides for each Participant’s Account to be distributed, such
amounts shall be paid in a single sum as soon as practicable after the date the
Plan is terminated. The amount of any such distribution shall be determined as
of the Valuation Date immediately preceding the date any such termination
distribution is to be processed. Termination of the Plan shall be binding on all
Participants and Beneficiaries.

 

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ARTICLE X

MISCELLANEOUS

10.1 Taxation. It is the intention of the Company that the benefits payable
hereunder shall not be deductible by the Participating Companies or taxable for
federal income tax purposes to Participants or Beneficiaries until such benefits
are paid by the Participating Companies, or the Trust, as the case may be, to
such Participants or Beneficiaries. The provisions of the Plan shall be
construed and interpreted and the Plan shall be operated in a manner consistent
with the requirements of Code Section 409A and the accompanying treasury
regulations and guidance issued by the Internal Revenue Service. Specifically,
no provision of the Plan that would provide for a distribution that is subject
to the additional tax under Code Section 409A shall be permitted and any
provision of the Plan which would result in a failure to meet the requirements
of Code Section 409A shall be deemed null and void.

10.2 No Employment Contract. Nothing herein contained is intended to be, nor
shall be construed as constituting, a contract or other arrangement between the
Company or any Participating Company and any Participant to the effect that the
Participant will be employed by a Participating Company for any specific period
of time.

10.3 Headings. The headings of the various Articles and Sections in the Plan are
solely for convenience and shall not be relied upon in construing any provisions
hereof. Any reference to a Section shall refer to a Section of the Plan unless
specified otherwise.

10.4 Gender and Number. Use of any gender in the Plan will be deemed to include
both genders when appropriate, and use of the singular number will be deemed to
include the plural when appropriate, and vice versa in each instance.

10.5 Successors. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume the obligations hereunder in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.

10.6 Assignment of Benefits. The right of a Participant or Beneficiary to
receive payments under the Plan shall not be anticipated, alienated, sold,
assigned, transferred, pledged, encumbered, attached or garnished by creditors
of such Participant or Beneficiary, except by will or by the laws of descent and
distribution and then only to the extent permitted under the terms of the Plan.

10.7 Entire Plan. The Plan supersedes all prior agreements, if any,
understandings and arrangements, oral or written, with respect to Company
Matching Contributions and Company Enhanced Contributions made by a
Participating Company to a Participant on and after January 1, 2013.
Notwithstanding anything herein to the contrary, Prior Plan Contributions, and
the earnings, gains and losses attributable thereto, remain subject to the terms
and provisions of the Prior Plan.

 

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10.8 Legally Incompetent. The Committee, in its sole discretion, may direct that
a payment to be made to an incompetent or disabled person, whether because of
minority or mental or physical disability, instead be made to the guardian of
such person or to the person having custody of such person, without further
liability either on the part of the Company or the Participating Companies for
the amount of such payment to the person on whose account such payment is made.

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

10.10 Governing Law. The Plan shall be construed, administered and governed in
all respects in accordance with ERISA and other applicable federal law and, to
the extent not preempted by federal law, in accordance with the laws of the
State of Texas. If any provisions of the Plan shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.

[Execution Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused these presents to be executed by its
duly authorized officer in a number of copies, all of which shall constitute but
one and the same instrument which may be sufficiently evidenced by any executed
copy hereof, this             day of             , 2012, but effective as of
January 1, 2013.

 

KRATON POLYMERS US LLC By:     Name:     Title:    

 

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KRATON POLYMERS US LLC

BENEFITS RESTORATION PLAN

APPENDIX A

The Plan’s Participating Companies as of January 1, 2013 are Kraton Polymers US
LLC and the following:

 

(1) None

 

A-1