Document:

EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

STEPHEN E. TREMBLAY

EMPLOYMENT AGREEMENT (the “Agreement”) dated as of April 1, 2008 by and between KRATON
Polymers LLC, (“KRATON” or the “Company”), a Delaware limited liability company, which is a wholly
owned subsidiary of Polymer Holdings LLC (“Parent”), a Delaware limited liability company and
Stephen E. Tremblay (the “Executive”).

In consideration of the premises and mutual covenants herein and for other good and valuable
consideration, the parties agree as follows:

1. Term of Employment. Subject to the provisions of Section 7 of this Agreement,
Executive shall continue to be employed by the Company for a period commencing on January 21, 2008
(the “Effective Date”) and ending on the day before the third anniversary of the Effective Date
(the “Employment Term”) on the terms and subject to the conditions set forth in this Agreement;
provided, however, that commencing with the third anniversary of the Effective Date and on each
anniversary thereafter (each an “Extension Date”), the Employment Term shall be automatically
extended for an additional one-year period, unless KRATON or Executive provides the other party
hereto 30 days prior written notice before the next Extension Date that the Employment Term shall
not be so extended.

2. Position.

a. During the Employment Term, Executive shall serve as Chief Financial Officer of KRATON. In
such position, Executive shall have the duties and authority commensurate with the position as
shall be determined from time to time by the Company. During the Employment Term, the Executive
shall be subject to, and shall act in accordance with, all reasonable instructions and directions
and all applicable policies and rules of the Company.

b. During the Employment Term, Executive will devote Executive’s full business time and best
efforts to the performance of Executive’s duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise which would conflict or interfere
with the rendition of such services either directly or indirectly, without the prior written
consent of the Company; provided that nothing herein shall preclude Executive, subject to the prior
approval of the Company, from accepting appointment to or continue to serve on any board of
directors or trustees of any business corporation or any charitable organization; provided in each
case, and in the aggregate, that such activities do not conflict or interfere with the performance
of Executive’s duties hereunder or conflict with Section 8.

3. Base Salary. During the Employment Term, the Company shall pay Executive a base
salary (the “Base Salary”) at the annual rate of $350,000, payable in regular installments in
accordance with the Company’s usual payment practices. Executive shall be entitled to annual
reviews and increases in Executive’s Base Salary, if any, as may be determined in the sole
discretion of the board of directors of KRATON (the “Board”).

4. Incentive Compensation. With respect to the first partial fiscal year and each
full fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus
award (an “Annual Bonus”) equal to (i) up to fifty percent (50%) of Executive’s Base Salary (the
“Target”) based upon the achievement of performance objectives established by the Board, and (ii)
up to 100% of the Target if such performance objectives are exceeded due to extraordinary
performance, as determined by the Board. The “fiscal year” during the Employment Term shall be
equal to the calendar year unless otherwise established by the Board. The performance objectives
for payment of the Annual Bonus shall be established in writing by the Board, on or before the end
of the third month of the applicable fiscal year.

5. Employee Benefits.

a. General. During the Employment Term, Executive shall be entitled to participate in
the Company’s employee benefit plans, as amended from time to time, (other than bonus, incentive or
severance plans) as in effect from time to time (collectively “Employee Benefits”), on the same
basis as those benefits are generally made available to other senior executives of the Company.

b. Other. During the Employment Term, Executive shall be eligible to participate in
the equity incentive plans of the Company, its Parent and TJ Chemical Holdings LLC.

6. Business Expenses. During the Employment Term, reasonable business expenses
incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the
Company in accordance with Company policies.

7. Termination. The Employment Term and Executive’s employment hereunder may be
terminated by either party at any time and for any reason; provided that Executive will be required
to give KRATON at least 60 days advance written notice of any resignation of Executive’s
employment, subject to and in accordance with the provisions of this Section 7 and subsections (a)
through (f). Notwithstanding any other provision of this Agreement, subject to Sections 8, 9, 10,
11(j) and 11(m), the provisions of this Section 7 shall exclusively govern Executive’s and the
Company’s rights and obligations related to termination of this Agreement and the rights and
remedies upon termination of employment with the Company and its affiliates.

a. By KRATON For Cause or By Executive Resignation without Good Reason.

(i) The Employment Term and Executive’s employment hereunder may be terminated
by KRATON for Cause (as defined below) and shall terminate automatically upon
Executive’s resignation without Good Reason (as defined below), provided that
Executive will be required to give KRATON at least 60 days advance written notice of
any such resignation, and provided further that KRATON may elect to waive such
notice period and to pay Executive in lieu of such notice.

(ii) For purposes of this Agreement “Cause” shall mean (A) Executive’s
continued failure substantially to perform Executive’s duties hereunder (other than
as a result of total or partial incapacity due to physical or mental illness) for a
period of 30 days following written notice by KRATON to Executive of such failure;
provided that it is understood that this clause (A) shall not permit KRATON to
terminate Executive’s employment for Cause because of dissatisfaction with the
quality of services provided by or disagreement with the actions taken by Executive
in the good faith performance of Executive’s duties to KRATON, (B) failure of
Executive to maintain his principal residence in the same metropolitan area as
KRATON’s principal headquarters, which is currently located in Houston, Texas, or
elsewhere as mutually agreed to by Executive and Company, (C) theft or embezzlement
of Company property, (D) Executive’s conviction of or plea of guilty or no contest
to (x) a felony or (y) a crime involving moral turpitude, (E) Executive’s willful
malfeasance or willful misconduct in connection with Executive’s duties hereunder or
any act or omission which is materially injurious to the financial condition or
business reputation of the Company or any of its subsidiaries or affiliates, or (F)
Executive’s breach of the provisions of Sections 8 or 9 of this Agreement.

(iii) If Executive’s employment is terminated by KRATON for Cause, or if
Executive resigns without Good Reason, Executive shall be entitled to receive,
within 30 days following such termination with respect to (A)-(C) below and at such
time, if any, as the Employee Benefits under (D) below become due in accordance with
the applicable terms thereof:

(A) the Base Salary through the date of termination, to the extent not
already paid;

(B) any Annual Bonus earned but unpaid as of the date of termination
for any previously completed fiscal year;

(C) reimbursement for any unreimbursed business expenses properly
incurred by Executive in accordance with KRATON policy prior to the date of
Executive’s termination; and

(D) such vested Employee Benefits, if any, as to which Executive may be
entitled under the employee benefit plans of the Company as described in
Section 5(a) (including, without limitation, any retirement benefits,
medical, life insurance or disability benefits, accrued but unpaid vacation
or other benefits Executive is entitled to pursuant to the terms of the
applicable plans then in effect (the amounts described in clauses (A)
through (D) hereof being referred to as the “Accrued Obligations”)).

Following such termination of Executive’s employment by KRATON for Cause or resignation by
Executive without Good Reason, except as set forth in this Section 7(a)(iii), Executive shall have
no further rights to any compensation or any other benefits in the nature of severance or
termination pay or in connection with the termination of his employment.

b. Disability or Death.

(i) The Employment Term and Executive’s employment hereunder shall terminate
upon Executive’s death and may be terminated by KRATON if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six (6)
consecutive months or for an aggregate of nine (9) months in any twenty-four (24)
consecutive month period to perform Executive’s duties (such incapacity is
hereinafter referred to as “Disability”); provided that a termination on the basis
of a Disability must occur within 90 days of the date when Executive is subject to
termination due to Disability. Any question as to the existence of the Disability
of Executive as to which Executive and KRATON cannot agree shall be determined in
writing by a qualified independent physician mutually acceptable to Executive and
KRATON. If Executive and KRATON cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall select
a third who shall make such determination in writing. The determination of
Disability made in writing to the Company and Executive shall be final and
conclusive for all purposes of the Agreement.

(ii) Upon termination of Executive’s employment hereunder for either Disability
or death, Executive or Executive’s estate (as the case may be) shall be entitled to
receive:

(A) at the times set forth in Section 7(a)(iii) hereof, the Accrued
Obligations;

(B) a pro rata portion of any Annual Bonus that Executive would have
been entitled to receive pursuant to Section 4 hereof in such year based
upon the percentage of the fiscal year that shall have elapsed through the
date of Executive’s termination of employment, payable when such Annual
Bonus would have otherwise been payable had Executive’s employment not
terminated.

Following Executive’s termination of employment due to death or Disability, except as set
forth in this Section 7(b)(ii), Executive shall have no further rights to any compensation or any
other benefits in the nature of severance or termination pay or in connection with the termination
of his employment.

c. By KRATON Without Cause or Resignation by Executive for Good Reason.

(i) The Employment Term and Executive’s employment hereunder may be terminated
by KRATON without Cause or by Executive’s resignation for Good Reason.

(ii) If Executive’s employment is terminated by KRATON without Cause (other
than by reason of death or Disability) or by Executive’s resignation for Good
Reason, other than in the event such termination occurs within one (1) year
following a Change in Control, which shall be governed exclusively by Section 7(d)
hereof, Executive shall be entitled to receive:

(A) At the times set forth in Section 7(a)(iii) hereof, the Accrued
Obligations;

(B) continuation of Executive’s annual Base Salary for a period of 12
months following such termination (the “Severance Continuation Period”)
which shall be paid at the same time and in the same manner as if Executive
had remained employed by KRATON during such period; and

(C) medical benefits for Executive and his eligible dependents
comparable to those medical benefits Executive participated in on the date
of termination during the Severance Continuation Period, provided in any
case such medical benefits shall cease if Executive becomes entitled to
medical benefits from a new employer. KRATON may provide such medical
benefits by paying the Executive’s COBRA continuation coverage through such
Severance Continuation Period.

(iii) For purposes of this Agreement, “Good Reason” shall mean (A) the failure
of the Company to pay or cause to be paid Executive’s Base Salary or Annual Bonus
(if any) when due, (B) a material reduction in Executive’s Base Salary, the Target
Annual Bonus opportunity described in Section 4 herein, or Employee Benefits other
than an across-the-board reduction in salary or bonus opportunity for all of the
members of the Company’s management team and other than a decrease in Employee
Benefits that applies to all employees otherwise eligible to participate in the
affected plan, (C) a relocation of Executive’s primary work location more than 50
miles from the work location on the date hereof, without written consent, or (D) a
material reduction in Executive’s duties and responsibilities as described in
Section 2(a) of this Agreement; provided that none of these events shall constitute
Good Reason unless the Company fails to cure such event within 30 days after receipt
from Executive of written notice specifying in reasonable detail the event which
constitutes Good Reason; provided, further, that “Good Reason” shall cease to exist
for an event on the 60th day following the later of its occurrence or Executive’s
knowledge thereof, unless Executive has given KRATON written notice thereof prior to
such date.

The payments and benefits described in subparagraphs 7(c)(ii)(B) — (C) above shall be subject
to and conditioned upon the Executive’s execution and delivery of a valid and effective general
release and waiver, in a form satisfactory to the Company, waiving all claims the Executive may
have against the Company, its affiliates and their respective executives, directors, partners,
members, shareholders, successors and assigns. Following Executive’s termination of employment by
the Company without Cause (other than by reason of Executive’s death or Disability) or by
Executive’s resignation for Good Reason, except as set forth in Section 7(c)(ii), Executive shall
have no further rights to any compensation or any other benefits in the nature of severance or
termination pay or in connection with the termination of his employment.

d. By KRATON Without Cause or Resignation by Executive for Good Reason Following a Change
In Control.

(i) The Employment Term and Executive’s employment hereunder may be terminated
by KRATON without Cause or by Executive’s resignation for Good Reason.

(ii) If the Executive’s employment is terminated by KRATON without Cause (other
than by reason of death or Disability) or by Executive’s resignation for Good Reason
within one (1) year following a Change in Control, Executive shall be entitled to
receive:

(A) at the times set forth in Section 7(a)(iii) hereof, the Accrued
Obligations;

(B) continuation of Executive’s annual Base Salary for the Severance
Continuation Period which shall be paid at the same time and in the same
manner as if Executive had remained employed by KRATON during such period;

(C) 1 times Annual Bonus calculated at the Target level payable as a
lump sum; and a pro rata portion of any Annual Bonus that Executive would
have been entitled to receive pursuant to Section 4 hereof in such year
calculated by taking the product of (a) his Target Annual Bonus multiplied
by (b) a fraction, the numerator of which is the number of days during which
the Executive was employed by the Company in the year of his termination and
the denominator of which is 365, as further adjusted to reflect the
then-current bonus accrual as it exists on the Company’s books as of the
date of termination. All sums due under this sub-paragraph shall be payable
within thirty (30) days of Executive’s termination of employment; and

(D) all health benefits including medical, dental and vision for
Executive and his eligible dependents comparable to those health benefits
Executive participated in on the date of termination during the Severance
Continuation Period, provided in any case such health benefits shall cease
if Executive becomes entitled to health benefits from a new employer.
KRATON may provide such health benefits by paying the Executive’s COBRA
continuation coverage through such Severance Continuation Period.

(iii) For purposes of this Agreement, “Change in Control” shall mean the
occurrence of any of the following events:

(A) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all of the assets of the Company,
Polymer Holdings, or TJ Chemical Holdings (together, the “Entities”) to any
Person or group of related persons (a “Group”) for purposes of Section 13(d)
of the Securities Exchange Act of 1934 (the “Exchange Act”), together with
any affiliates thereof other than to TPG III Polymer Holdings LLC, TPG IV
Polymer Holdings LLC or J.P. Morgan Partners LLC or any of their affiliates
(hereinafter the “Sponsors”);

(B) the complete liquidation or dissolution of any of the Entities;

(C) (1) any Person or Group (other than the Sponsors) shall become the
beneficial owner (within the meaning of Section 13(d) of the Exchange Act),
directly or indirectly, of equity interests of an Entity representing more
than 40% of the aggregate outstanding voting equity interests of such Entity
and such Person or Group actually has the power to vote such equity
interests in any such election and (2) the Sponsors beneficially own (within
the meaning of Section 13(d) of the Exchange Act), directly or indirectly,
in the aggregate a lesser percentage of the voting equity interests of an
Entity than such other Person or Group;

(D) the replacement of a majority of the board of directors of an
Entity over a two-year period from the directors who constituted such board
at the beginning of such period, and such replacement shall not have been
approved by a vote of at least a majority of the board then still in office
who either were members of such board at the beginning of such period or
whose election as a member of such board was previously so approved or who
were nominated by, or designees of, the Sponsors; or

(E) a merger or consolidation of an Entity with another entity in which
holders of the equity interests of the Entity immediately prior to the
consummation of the transaction hold, directly or indirectly, immediately
following the consummation of the transaction, less than 50% of the common
equity interest in the surviving corporation in such transaction and the
Sponsors do not hold a sufficient amount of voting equity interests to elect
a majority of the surviving entity’s board of directors.

(F) The payments and benefits described in subparagraphs 7(d)(ii)(B) -
(D) above shall be subject to and conditioned upon the Executive’s execution
and delivery of a valid and effective general release and waiver, in a form
satisfactory to the Company, waiving all claims the Executive may have
against the Company, its affiliates and their respective executives,
directors, partners, members, shareholders, successors and assigns.
Following Executive’s termination of employment by the Company as a result
of a Change In Control, except as set forth in Section 7(d)(ii), Executive
shall have no further rights to any compensation or any other benefits in
the nature of severance or termination pay or in connection with the
termination of his employment.

e. Expiration of Employment Term.

(i) Election Not to Extend the Employment Term. In the event either
party elects not to extend the Employment Term pursuant to Section 1, unless
Executive’s employment is earlier terminated pursuant to paragraphs (a), (b), (c) or
(d) of this Section 7, Executive’s termination of employment hereunder (whether or
not Executive continues as an employee of the Company thereafter) shall be deemed to
occur on the close of business on the day immediately preceding the next scheduled
Extension Date. If Executive’s employment is terminated due to Executive’s election
not to extend the Employment Term, Executive shall be entitled to receive the
Accrued Obligations. If Executive’s employment is terminated by KRATON other than
for Cause following KRATON’s election not to extend the Employment Term, Executive
shall be entitled to receive (1) at the times set forth in Section 7(a)(iii) hereof,
the Accrued Obligations, (2) continuation of Executive’s annual Base Salary during
the Severance Continuation Period at the same time and in the same manner as if
Executive had remained employed by KRATON during such period, and (3) medical
benefits for Executive and his eligible dependents comparable to those medical
benefits Executive participated in on the date of termination during the Severance
Continuation Period, provided in any case such medical benefits shall cease if
Executive becomes entitled to medical benefits from a new employer. KRATON may
provide such medical benefits by paying the Executive’s COBRA continuation coverage
through such Severance Continuation Period.

The payments and benefits described in this subparagraph (i) shall be subject
to and conditioned upon the Executive’s execution and delivery of a valid and
effective general release and waiver, in a form satisfactory to the Company, waiving
all claims the Executive may have against the Company, its affiliates and their
respective executives, directors, partners, members, shareholders, successors and
assigns. Following such termination of Executive’s employment hereunder as a result
either party’s election not to extend the Employment Term, except as set forth in
this Section 7(e)(i), Executive shall have no further rights to any compensation or
any other benefits in the nature of severance or termination pay or in connection
with the termination of his employment.

(ii) Continued Employment Beyond the Expiration of the Employment Term.
Unless the parties otherwise agree in writing, continuation of Executive’s
employment with the Company beyond the expiration of the Employment Term shall be
deemed an employment at-will and shall not be deemed to extend any of the provisions
of this Agreement and Executive’s employment may thereafter be terminated at will by
either Executive or the Company; provided that the provisions of Sections 8, 9 and
10 of this Agreement (and the Company’s potential severance obligation under Section
7(e)(i) if applicable) shall survive any termination of this Agreement or
Executive’s termination of employment hereunder.

f. Notice of Termination. Any purported termination of employment by the Company or
by Executive (other than due to Executive’s death) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 11(h) hereof For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of employment under the
provision so indicated.

8. Non-Competition.

a. Executive acknowledges and recognizes the highly competitive nature of the businesses of
the Company and accordingly agrees as follows:

(i) During the Employment Term and, for a period of one year following the date
Executive ceases to be employed by the Company (the “Restricted Period”), Executive
will not, whether on Executive’s own behalf or on behalf of or in conjunction with
any person, company, business entity or other organization engaged in a Competitive
Business (as defined below), directly or indirectly solicit or assist in soliciting
on behalf of any entity engaged in a Competitive Business, the business of any
client or prospective client:

(A) with whom Executive had personal contact or dealings on behalf of
the Company during the one year period preceding Executive’s termination of
employment;

(B) with whom employees reporting to Executive have had personal
contact or dealings on behalf of the Company during the one-year period
immediately preceding the Executive’s termination of employment; or

(C) for whom Executive had direct or indirect responsibility during the
one-year period immediately preceding Executive’s termination of employment.

(ii) During the Restricted Period, Executive will not directly or indirectly:

(A) engage in a Competitive Business;

(B) enter the employ of, or render any services to, any person or
entity (or any division of any person or entity) who or which engages in a
Competitive Business; provided that Executive shall not be prohibited from
rendering any services to any company that derives less than 10% of its
revenues from a Competitive Business (a “Permitted Company”), if such
services or employment relate solely to a business of the Company that is
not in competition with a Competitive Business;

(C) acquire a financial interest in, or otherwise become actively
involved with, any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent,
trustee or consultant; provided, however, a Competitive Business shall not
include a Permitted Company, or

(D) interfere with, or attempt to interfere with, business
relationships (whether formed before, on or after the date of this
Agreement) between the Company and customers, clients, suppliers partners,
members or investors of the Company of which it is reasonable to expect that
Executive is aware.

(iii) For purposes of this Agreement, “Competitive Business” means the
development, manufacture, license, sale or provision of products or services that
the Company currently, or at any time during the Employment Term, sells,
manufactures, licenses or provides, or has specific plans to do so, including
without limitation styrenic block copolymers made by anionic polymerization.

(iv) Notwithstanding anything to the contrary in this Agreement, Executive may,
directly or indirectly own, solely as an investment, securities of any person
engaged in a Competitive Business which is publicly traded on a national or regional
stock exchange or on the over-the-counter market if Executive (i) is not a
controlling person of, or a member of a group which controls, such person and (ii)
does not, directly or indirectly, own 5% or more of any class of securities of such
person.

(v) During the Restricted Period, Executive will not, whether on Executive’s
own behalf or on behalf of or in conjunction with any person, company, business
entity or other organization whatsoever, directly or indirectly:

(A) solicit or encourage any employee of the Company to leave the
employment of the Company; or

(B) hire any such employee who was employed by the Company as of the
date of Executive’s termination of employment with the Company or who left
the employment of the Company coincident with, or within six months prior to
or after, the termination of Executive’s employment with the Company.
Notwithstanding the foregoing, following a Change in Control, Executive will
not be restricted from hiring any employee who is terminated without Cause
following such Change in Control.

(vi) During the Restricted Period, Executive will not, directly or indirectly,
solicit or encourage to cease to work with the Company any individual consultant
then under contract with the Company.

b. It is expressly understood and agreed that although Executive and the Company consider the
restrictions contained in this Section 8 to be reasonable, if a final judicial determination is
made by a court of competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially determine or indicate to
be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the other restrictions
contained herein.

9. Confidentiality; Inventions.

a. Confidentiality. During the Employment Term and thereafter, Executive will not
disclose or use for Executive’s own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other business organization,
entity or enterprise other than the Company, any trade secrets, or other confidential information
or data of the Company relating to the Company’s customers, development programs, costs, marketing,
trading, investment, sales activities, promotion, credit and financial data, manufacturing
processes, financing methods, plans, or the business and affairs of the Company generally; provided
that the foregoing shall not apply to information which is not unique to the Company or which is
generally known to the industry or the public other than as a result of Executive’s breach of this
covenant. Except as required by law, Executive will not disclose to anyone, other than his
immediate family, legal or financial advisors or any subsequent employer, the contents of this
Agreement. Executive agrees that upon termination of Executive’s employment with the Company for
any reason, he will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in any way relating to
the business of the Company, except that he may retain personal notes, notebooks and diaries and
personally owned books, reference material or information of a similar nature, that do not contain
confidential information of the type described in the preceding sentence of this section.
Executive further agrees that he will not retain or use for Executive’s account at any time any
trade names, trademark or other proprietary business designation used or owned in connection with
the business of the Company.

b. Prior Inventions. Executive has attached hereto, as Exhibit A, a list describing
all material creations, inventions, and developments which were created or contributed to by
Executive either solely or jointly with others prior to Executive’s employment with the Company
which relate to the Company’ proposed or current business, services, products or research and
development (collectively referred to as “Prior Inventions”). If no such list is attached,
Executive either will advise the Company that Prior Inventions exist but cannot be disclosed
because of prior existing confidentiality obligations or, absent such advice, will be understood to
represent that there are no such Prior Inventions. If in the course of Executive’s employment with
the Company, Executive uses or relies upon a Prior Invention, or any works of authorship (including
software, related items, data bases, documentation, site content, text or graphics), developments,
improvements or trade secrets which were created or contributed to by Executive either solely or
jointly with others prior to Executive’s employment with the Company (“Prior Intellectual
Property”) in Executive’s creation or contribution to any work of authorship, invention, product,
service, process, machine or other property of the Company, Executive will inform the Company
promptly and, upon request, use Executive’s best efforts to procure any consents of third parties
necessary for the Company’ use of such Prior Intellectual Property. To the fullest extent
permissible by law, and to the extent not in contravention of any prior legal obligation of
Executive to others all of which are disclosed to KRATON on Exhibit B, attached hereto, Executive
hereby grants the Company a non-exclusive royalty-free, irrevocable, perpetual, worldwide license
under all of Executive’s Prior Inventions to make, have made, copy, modify, distribute, use and
sell works of authorship, products, services, processes and machines and to otherwise operate the
Company’ current and future business.

c. Ownership of Inventions. Executive agrees that Executive will promptly make full
written disclosure to the Company, and hereby assigns to the Company, or its designee, all of
Executive’s right, title, and interest in and to any and all creations, inventions or developments,
whether or not patentable, which Executive may solely or jointly conceive or develop or reduce to
practice, during the period of time Executive is in the employ of the Company (collectively
referred to as “the Company Inventions”), other than (and the Company Inventions shall not include)
any such creations, inventions or developments which demonstrably bear no relationship whatsoever
to the business of the Company, the chemical industry, or the application of technologies, ideas,
or processes directly or indirectly related to the business of the Company or the chemical industry
to any other industries or disciplines. For the avoidance of doubt, the Company Inventions shall
include any creations, inventions or developments that relate directly or indirectly to a
Competitive Business. Executive further acknowledges that all original works of authorship which
are created or contributed to by Executive (solely or jointly with others) within the scope of and
during the period of Executive’s employment with the Company (“the Company Copyrights”) are to be
deemed “works made for hire,” as that tenor is defined in the United States Copyright Act, and the
copyright and all intellectual property rights therein shall be the sole property of the Company.
To the extent any of such works are deemed not to be “works made for hire,” Executive hereby
assigns the copyright and all other intellectual property rights in such works to the Company.

d. Contracts with the United States. Executive agrees to execute any licenses or
assignments of the Company Inventions or the Company Copyrights as required by any contract between
the Company and the United States or any of its agencies.

e. Maintenance of Records. Executive agrees to keep and maintain adequate and current
written records of all the Company Inventions made by Executive (solely or jointly with others)
during the term and within the scope of Executive’s employment with the Company. The records will
be in the form of notes, sketches, drawings, and any other format that may be specified to
Executive or within the Company’ policies, manuals or procedures by the Company. The records will
be available to and remain the sole property and intellectual property of the Company at all times.

f. Further Assurances. Executive covenants to take all requested actions and execute
all requested documents to assist the Company, or its designee, at the Company’ expense, in every
way; consistent with applicable law, (1) to secure the Company’s above rights in the Prior
Intellectual Property and Company Inventions and any of the Company’s Copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and all countries, and
(2) to pursue any patents or registrations with respect thereto. This covenant shall survive the
termination of this Agreement. If the Company is unable for any reason, after reasonable efforts,
to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as Executive’s
agent and attorney in fact, for the limited purpose of acting for and in Executive’s behalf and
stead to execute such documents and to do all other lawfully permitted acts in connection with the
execution of such documents.

10. Specific Performance. Executive acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of any of the provisions of Sections 8 and 9
would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable remedy which may then
be available and in the event of a breach of Sections 8 and 9, shall be entitled to cease making
any payments or providing any benefit otherwise required by this Agreement.

11. Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to conflicts of laws principles thereof.

b. Entire Agreement/Amendments. Except for the documents related to the Company and
its affiliates’ equity incentive plans, this Agreement contains the entire understanding of the
parties with respect to the employment of Executive by the Company, there are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties hereto.

c. No Waiver. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive
such party of the right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.

d. Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall not be affected
thereby.

e. Assignment. This Agreement shall not be assignable by Executive. This Agreement
may be assigned by the Company to a person or entity which is an affiliate or a successor in
interest to substantially all of the business operations of the Company. Upon such assignment, the
rights and obligations of the Company hereunder shall become the rights and obligations of such
affiliate or successor person or entity.

f. Set Off. The Company’s obligation to pay Executive the amounts provided and to
make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of
amounts owed by Executive to the Company or its affiliates, to the extent permitted under Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).

g. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors, administrators, successors, heirs,
distributes, devises and legatees.

h. Notice. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or overnight courier or three days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth below Agreement, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall be effective only
upon receipt.

If to the Company:

KRATON Polymers LLC

c/o Texas Pacific Group

301 Commerce Street, suite 3300

Fort Worth, Texas 76102

If to Executive:

To the most recent address of Executive set forth in the personnel records of the
Company.

i. Executive Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the Company and the performance by
Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any employment agreement or other agreement or policy to which Executive
is a party or otherwise bound.

j. Cooperation. Executive shall at the Company’s expense provide his reasonable
cooperation in connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during Executive’s employment hereunder. This
provision shall survive any termination of this Agreement.

k. Withholding Taxes. The Company may withhold from any amounts payable under this
Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.

l. Counterparts. This Agreement may be signed in counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.

m. Insurance. Notwithstanding anything to the contrary herein:

(i) All rights the Executive has to indemnification as a director, officer or
fiduciary pursuant to any agreement, applicable statue, Company bylaws or articles
of organization as in effect from time to time shall not be impacted by the
provisions of this Agreement and all such rights, if any, shall survive the
termination and/or expiration of this Agreement and/or the termination of the
Executive’s employment with the Company; and

(ii) So long as the Executive is employed by the Company and for a period of
six (6) years following the Executive’s termination of employment, the Company
agrees to purchase and maintain insurance for the Executive’s benefit, covering
director, officer and fiduciary liability on the same basis as active directors,
officers and/or fiduciaries, as applicable, of the Company.

n. Section 409A. If the Company reasonably determines that certain provisions of the
Agreement may result in a violation of Section 409A, then the Company may make reasonable
modifications to the Agreement without the Executive’s consent, to attempt to comply with Section
409A and avoid the excise taxes that may be imposed thereunder without giving rise to any claim
that such modification adversely affected Executive’s rights under the Agreement. This Agreement
is intended to comply with Section 409A, and shall be construed accordingly.

* * * * *

1

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 
	KRATON POLYMERS LLC
	/s/ Richard A. Ott
	By:

	Title:

	STEPHEN E. TREMBLAY

/s/ Stephen E. Tremblay

	 

	By:

	Title:

2EX-10.1

PERFORMANCE UNIT AWARD AGREEMENT

(under the Milacron Inc. 2004 Long-Term Incentive Plan, As Amended)

THIS PERFORMANCE UNIT AWARD AGREEMENT (“Agreement”) made in Cincinnati, Ohio on the date of
signature below, between Milacron Inc., a Delaware corporation (hereinafter called the “Company”)
and      , a regular salaried employee of the Company or one of its Subsidiaries
(hereinafter called the “Grantee”).

WITNESSETH:

Whereas, the Company desires to grant to the Grantee the right, contingent upon certain
vesting requirements, to receive either cash or shares of common stock of Milacron Inc. (as
determined by the Company), as hereinafter provided, upon the attainment of certain management
objectives as more fully set forth in the Performance Unit Award Agreement Terms attached hereto as
Exhibit A and incorporated herein (the “Terms”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and
hereinafter in the attached Agreement, and for other good and valuable consideration, the Company
and the Grantee do hereby agree as follows:

Subject to and upon the terms, conditions and restrictions set forth in the Milacron Inc. 2004
Long-Term Incentive Plan, as amended and as may be amended from time to time (the “Plan”) and this
Agreement, the Company hereby grants to the Grantee xxxxxx Performance Units (collectively the
“Award”), effective as of April 2, 2008 (the “Date of Grant”). Each Performance Unit represents
the contingent right to receive $1.00 or its equivalent value in shares of Milacron Inc. common
stock, subject to the terms and conditions set forth in the Plan and this Agreement, including
Exhibit A hereto.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Grantee
has hereunto set his or her hand, all as of the day and year first above written.

MILACRON INC.

By:

GRANTEE:

DATE:

EXHIBIT A

MILACRON INC.

PERFORMANCE UNIT AWARD AGREEMENT TERMS

1. Restrictions on Transfer of Award. The Award may not be sold, exchanged, assigned,
transferred, pledged, encumbered or otherwise disposed of by the Grantee; provided,
however, that the Grantee’s rights with respect to such Award may be transferred by will or
pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in
violation of the provisions of this Section 1 shall be void ab initio, and the other party to any
such purported transaction shall not obtain any rights to or interest in such Award.

2. Vesting and Payment of Award. 

(a) All or a portion of the Award shall vest and become nonforfeitable at 11:59 p.m. on
January 2, 2010 (the “Vesting Date”), provided that (i) the Grantee has been continuously employed
with the Company and its Subsidiaries from the Date of Grant until such time and (ii) the Company
determines and the Committee approves that all or a portion of the management objectives set forth
in Schedule A attached hereto and incorporated herein (“Management Objectives”) have been
satisfied in accordance with Section 2(b).

(b) As soon as administratively practicable following the end of the Performance Period (as
defined below), the Personnel and Compensation Committee of the Company’s Board of Directors (the
“Committee”) shall determine (i) the extent, if any, to which the Management Objectives for the
period beginning on January 1, 2008 and ending on December 31, 2008 (the “Performance Period”)
shall have been achieved in accordance with Schedule A; (ii) the number of Performance
Units under the Award, if any, that shall have been earned in accordance with Schedule A;
and, (iii) whether upon the Vesting Date the Company will settle the Award in cash or shares of
Milacron common stock. In the event the Committee determines settlement shall be in the form of
shares of Milacron Inc. common stock, the Award shall be converted to a book entry equivalent of
shares using the fair market value of Milacron Inc. common stock on the first business day
following the end of the Performance Period and the Grantee will receive shares of Milacron common
stock following the Vesting Date, if not otherwise forfeited, pursuant to the terms herein.

(c) If the Grantee ceases to be an employee of the Company or its Subsidiaries after the
Performance Period but prior to the Vesting Date as a result of his or her Retirement, Disability,
Death, or any other event specified by the Committee, then the number of Performance Units earned
in accordance with Section 2(b) shall vest as of the Vesting Date pursuant to the terms herein. For
purposes of this Agreement, “Retirement” shall mean the Grantee’s termination of employment with
the Company and its Subsidiaries (i) after having attained age 55 and at least five years of
Credited Service (as that term is defined in the Milacron Retirement Plan); or, (ii) in accordance
with a temporary early retirement program or other agreed upon severance arrangement of the Company
or its Subsidiaries. For purposes of this Agreement, “Disability” shall have the meaning given
such term in the long-term disability plan of the Company in effect for, or applicable to, the
Grantee.

(d) Payment of any Performance Units of an Award that are earned and vested in accordance with
Sections 2(a) through 2(c) and not forfeited in accordance with Section 3 shall be made to the
Grantee no later than by March 15, 2010.

3. Forfeiture of Award. Except as and to the extent the Award has become nonforfeitable
pursuant to Sections 2(c), all of the Award shall be forfeited if the Grantee ceases to be
continuously employed by the Company and its Subsidiaries prior to the Vesting Date.

4. No Employment Contract. Nothing contained in this Agreement shall confer upon the Grantee
any right with respect to continuance of employment by the Company and its Subsidiaries, nor limit
or affect in any manner the right of the Company and its Subsidiaries to terminate the employment
or adjust the compensation of the Grantee.

5. Taxes and Withholding. The Company shall withhold from the Award as is standard and
customary. To the extent that the Company shall be required to withhold any federal, state, local
or other taxes in connection with the Award and the amounts available to the Company for such
withholding are insufficient, the Grantee shall pay such taxes or make provisions that are
satisfactory to the Company for the payment thereof.

6. Continuous Employment. For purposes of this Agreement, the continuous employment of the
Grantee with the Company and its Subsidiaries shall not be deemed to have been interrupted, and the
Grantee shall not be deemed to have ceased to be an employee of the Company and its Subsidiaries by
reason of the transfer of his employment among the Company and its Subsidiaries or a leave of
absence approved by the Company.

7. Amendments. Subject to the terms of the Plan, the Committee may modify this Agreement upon
written notice to the Grantee. Any amendment to the Plan shall be deemed to be an amendment to
this Agreement to the extent that the amendment is applicable hereto. Notwithstanding this
foregoing, no amendment of the Plan or this Agreement shall adversely affect the rights of the
Grantee under this Agreement without the Grantee’s consent.

8. Severability. In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall
be deemed to be separable from the other provisions hereof, and the remaining provisions hereof
shall continue to be valid and fully enforceable.

9. Entire Agreement. The Agreement and the Terms contain the entire agreement and
understanding of the parties with respect to the subject matter contained in this Agreement, and
supersede all prior communications, representations and negotiations in respect thereto. In the
event of any inconsistency between the provisions of the Agreement and the Terms, the Terms shall
govern.

10. Successors and Assigns. Without limiting Section 1 hereof, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors, administrators,
heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the
Company.

11. Governing Law. The interpretation, performance, and enforcement of this Agreement shall
be governed by the laws of the State of Delaware, without giving effect to the principles of
conflict of laws thereof.

12. Compliance with Section 409A of the Code. It is intended that the Performance Units
payable pursuant to this Agreement shall either be exempt from the application of, or comply with,
the requirements of Section 409A of the Internal Revenue Code (the “Code”). This Agreement shall be
construed, administered, and governed in a manner that effects such intent, and the Committee shall
not take any action that would be inconsistent with such intent. Without limiting the foregoing,
the Performance Units of an Award shall not be deferred, accelerated, extended, paid out, settled,
adjusted, substituted, exchanged or modified in a manner that would cause the Awards to fail to
satisfy the conditions of an applicable exception from the requirements of Section 409A of the Code
or otherwise would subject the Grantee to the additional tax imposed under Section 409A of the
Code. The Company makes no representations or warranties with respect to the tax consequences of
the provisions of the Plan, the Agreement or any other program, agreement or arrangement of the
Company or any affiliates, or that they do or will comply in form or operation with Section 409A of
the Code.

13. Notices. Any notice to the Company shall be in writing to the Company and any notice to
the Grantee shall be addressed to the Grantee at his or her address on file with the Company.
Except as otherwise provided herein, any written notice shall be deemed to be duly given if and
when delivered personally or deposited in the United States mail, first class certified or
registered mail, postage and fees prepaid, return receipt requested, and addressed as aforesaid.
Any party may change the address to which notices are to be given hereunder by written notice to
the other party as herein specified (provided that for this purpose any mailed notice shall be
deemed given on the third business day following deposit of the same in the United States mail).

[END]

1

SCHEDULE A

MANAGEMENT OBJECTIVES

1. Management Objectives. The Management Objectives applicable to the Award shall be based
on the Company’s consolidated Earnings Before Interest Taxes Depreciation and Amortization as
reported in consolidated financial statements and excluding certain extraordinary or special items
and/or certain non-cash gains or losses as approved by the Committee (“EBITDA”).

2. Determination of Size of Award. The ultimate number of Performance Units that may be
earned shall be based on the extent to which the Company’s EBITDA for the Performance Period is
equal to or greater than the EBITDA levels set forth below (if the Company’s EBITDA falls between
two of the specified amounts set forth below, then the percentage of Award vested shall be
calculated in a linear fashion):

	 	 	 	 	 
	EBITDA FOR PERFORMANCE PERIOD	 	% of Award Earned
	***

	 	 	200	%
	 

	 	 	 	 
	***

	 	 	175	%
	 

	 	 	 	 
	***

	 	 	150	%
	 

	 	 	 	 
	***

	 	 	110	%
	 

	 	 	 	 
	***

	 	 	80	%
	 

	 	 	 	 
	***

	 	 	25	%
	 

	 	 	 	 
	***

	 	 	0	%
	 

	 	 	 	 

***indicates where text has been omitted pursuant to a request for confidential treatment. The
omitted text has been filed separately with the Securities and Exchange Commission.

2

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