QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.7

STOCK OPTION AGREEMENT
(Time Option/Performance Option)

        This Stock Option Agreement (the "Agreement"), dated as of October 15,
2004 (the "Grant Date"), is made by and between Rockwood Holdings, Inc., a
Delaware corporation (hereinafter referred to as the "Company"), and Thomas J.
Riordan, an employee of the Company or a Subsidiary or an Affiliate (as defined
below) of the Company, hereinafter referred to as "Optionee."

        WHEREAS, the Committee (as defined in the Plan), appointed to administer
the Plan, has determined that it would be to the advantage and best interest of
the Company and its shareholders to grant the Optionee an option to purchase
shares of its common stock, par value $0.01 per share (the "Common Stock") as an
incentive for increased efforts during the Optionee's term of employment with
the Company or its Subsidiaries or Affiliates;

        NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I
DEFINITIONS

        Whenever the following terms are used in this Agreement, they shall have
the meaning specified in the Plan or below unless the context clearly indicates
to the contrary.

Section 1.1.    —Affiliate

        "Affiliate" shall mean, with respect to the Company, any entity directly
or indirectly controlling, controlled by, or under common control with, the
Company or any other entity designated by the Board of Directors of the Company
in which the Company or an Affiliate has an interest.

Section 1.2.    —Cause

        'Cause" shall mean (i) the Optionee's willful and continued failure to
perform duties, which are within the control of the Optionee and consistent with
such Optionee's title and position, that is not cured within 15 days following
written notice of such failure, (ii) the Optionee's conviction of or plea of
guilty or no contest to a (x) felony or (y) crime involving moral turpitude,
(iii) the Optionee's willful malfeasance or misconduct which is injurious to the
Company or its Subsidiaries, other than in a manner that is insignificant or
inconsequential, (iv) a breach by Optionee of the material terms of the
Management Stockholder's Agreement concerning any non-compete, non-solicitation
or confidentiality, following notice of such breach (which notice may be oral or
written) or (v) any violation by the Optionee of any material written Company
policy after written notice of such breach, if such violation is shown by the
Company to be reasonably expected to result in material injury to the business,
reputation or financial condition of the Company.

Section 1.3.    —Change of Control

        "Change of Control" shall mean (i) sales of all or substantially of the
assets of the Company to a Person who is not Kohlberg Kravis Roberts & Co. Ltd
("KKR") or an affiliate of KKR (collectively, the "KKR Partnerships"), (ii) a
sale by KKR or any of its respective affiliates resulting in more than 50% of
the voting stock of the Company being held by a Person or Group that does not
include KKR or any of its respective affiliates, or (iii) a merger,
consolidation, recapitalization or reorganization of the Company with or into
another Person which is not an affiliate of KKR; if, and only if, as a result of
any of the foregoing events in clauses (i), (ii) or (iii) above, the KKR
Partnerships lose the ability, without the approval of any Person (applicable to
the respective foregoing events in clauses (i), (ii) or (iii) above) who is not
an affiliate of KKR, to elect a majority of the Board of Directors ("Board") of
the Company (or the resulting entity). Notwithstanding the foregoing, if any of
the transactions

--------------------------------------------------------------------------------

described in clauses (i), (ii) or (iii) of the preceding sentence shall occur
and the other Person involved in such transaction (or its ultimate parent
entity) is an operating company controlled by KKR or an affiliate of KKR prior
to such transaction (an "Alternate KKR Entity"), then the determination of
whether a change of control has occurred shall be made by determining whether an
event set forth in clauses (i), (ii) or (iii) above has occurred (including the
ability to elect a majority of the Board) if the Alternate KKR Entity is treated
as being unaffiliated with KKR and by treating the voting power of the Alternate
KKR Entity in the Company (or the resulting entity) as if it were held by a
Person unaffiliated with KKR.

Section 1.4.    —Code

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

Section 1.5.    —Financial Statement Approval Date

        "Financial Statement Approval Date" shall mean the date on which the
audited financial statements of the Company for any given Fiscal Year have been
finally approved by the auditing firm engaged by the Company to review such
statements (which approval shall in no event occur later than March 31 of the
calendar year immediately following the applicable Fiscal Year).

Section 1.6.    —Fiscal Year

        "Fiscal Year" shall mean each fiscal year of the Company.

Section 1.7.    —Good Reason

        "Good Reason" shall mean, without the Optionee's consent, (i) a
reduction in the Optionee's base salary or annual bonus opportunity (other than
a reduction in base salary that is offset by an increase in bonus opportunity
upon the attainment of reasonable financial targets, which reduction may not
exceed 10% of the Optionee's base salary in any 12 month period), (ii) a
substantial reduction in the Optionee's duties and responsibilities, which
continues beyond 15 days after written notice by the Optionee to the Company of
such reduction, (iii) the elimination or reduction of the Optionee's eligibility
to participate in the Company's benefit programs that is inconsistent with the
eligibility of similarly situated employees of the Company to participate
therein, (iv) a transfer of the Optionee's primary workplace by more than 35
miles from the current workplace, (v) any serious chronic mental or physical
illness of an immediate family member that requires the Optionee to terminate
his or her employment with the Company because of a substantial interference
with his or her duties at the Company or (vi) any failure by the Company to pay
when due any payment owed to the Optionee within 15 days after the date such
payment becomes due.

Section 1.8.    —Group

        "Group" shall mean two or more Persons acting together as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Company.

Section 1.9.    —Initial Vesting Date

        "Initial Vesting Date" shall mean the Grant Date.

Section 1.10.    —Interim Termination Event

        "Interim Termination Event" shall mean any event that terminates the
Optionee's employment described in Section 3.2(b) or (c) below, which occurs
after December 31 of any given calendar year but prior to the Financial
Statement Approval Date occurring in the immediately following calendar year.

Section 1.11.    —Management Stockholder's Agreement

2

--------------------------------------------------------------------------------

        "Management Stockholder's Agreement" shall mean that certain Amended and
Restated Management Stockholder's Agreement dated as of October 15, 2004 between
the Optionee and the Company.

Section 1.12.    —Options

        "Options" shall mean the Time Option (which shall, in part and to the
extent permitted by applicable law and as set forth on the signature page
hereto, be an "incentive stock option," within the meaning of Section 422 of the
Code) and the Performance Option (which shall in its entirety be an option that
is not an incentive stock option) to purchase Common Stock granted under this
Agreement. To the extent that, for any reason, an Option intended to be an
incentive stock option does not qualify as an incentive stock option, it shall
be deemed an Option that is not an incentive stock option.

Section 1.13.    —Performance Option

        "Performance Option" shall mean an Option with respect to which the
commencement of exercisability is governed by Section 3.1(b) hereof.

Section 1.14.    —Performance Target

        "Performance Target" shall have the meaning as set forth in Appendix A
attached hereto.

Section 1.15.    —Permanent Disability

        "Permanent Disability" shall mean a determination, made at the request
of the Optionee or upon the reasonable request of the Company set forth in a
notice to the Optionee, by a physician selected by the Company and the Optionee,
that the Optionee is unable to perform his duties as an employee of the Company
or its Subsidiaries and in all reasonable medical likelihood such inability will
continue for a period in excess of 180 days.

Section 1.16.    —Person

        "Person" shall mean "person," as such term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (or
any successor section thereto).

Section 1.17.    —Plan

        "Plan" shall mean the Amended and Restated 2003 Stock Purchase and
Option Plan for Rockwood Holdings, Inc. and Subsidiaries, as amended from time
to time.

Section 1.18.    —Pronouns

        The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

Section 1.19.    —Retirement

        "Retirement" shall mean retirement at age 65 or over (or such other age
as may be approved by the Board of Directors of the Company) after having been
employed by the Company or a Subsidiary for at least three years.

Section 1.20.    —Secretary

        "Secretary" shall mean the Secretary of the Company.

Section 1.21.    —Time Option

        "Time Option shall mean an Option with respect to which the commencement
of exercisability is governed by Section 3.1(a) hereof.

Section 1.22.    —Vesting Date

3

--------------------------------------------------------------------------------

        "Vesting Date" shall mean each anniversary of the Initial Vesting Date
on which the Time Option becomes exercisable pursuant to
Section 3.1(a)(i) hereof.

ARTICLE II
GRANT OF OPTIONS

Section 2.1.    —Grant of Options

        For good and valuable consideration, on and as of the date hereof the
Company irrevocably grants to the Optionee a Time Option and/or a Performance
Option to purchase any part or all of an aggregate of the number of shares set
forth with respect to each such Option on the signature page hereof of its
Common Stock upon the terms and conditions set forth in this Agreement.

Section 2.2.    —Exercise Price

        Subject to Section 2.4, the exercise price of the shares of Common Stock
covered by the Options shall be $500.00 per share without commission or other
charge (which is the fair market value per share of the Common Stock on the
Grant Date).

Section 2.3    —No Guarantee of Employment

        Nothing in this Agreement or in the Plan shall confer upon the Optionee
any right to continue in the employ of the Company or any Subsidiary or
Affiliate or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries or Affiliates, which are hereby expressly reserved,
to terminate the employment of the Optionee at any time for any reason
whatsoever, with or without Cause.

Section 2.4.    —Adjustments in Options Pursuant to Merger, Consolidation, etc.

        Subject to Sections 8 and 9 of the Plan, in the event that the
outstanding shares of the stock subject to an Option, are, from time to time,
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, or other corporate event, the Committee shall make, as appropriate and
equitable, an adjustment in the number and kind of shares and/or the amount of
consideration as to which or for which, as the case may be, such Option, or
portions thereof then unexercised, shall be exercisable and/or, other than in an
event that is a Change of Control, shall pay to the Optionee a dividend in
respect of the shares of Common Stock subject to the Option, in any event in
order to allow the Optionee to participate in such corporate event in an
equitable manner. Any such adjustment made by the Committee shall be final and
binding upon the Optionee, the Company and all other interested persons.

4

--------------------------------------------------------------------------------

ARTICLE III
PERIOD OF EXERCISABILITY

Section 3.1.    —Commencement of Exercisability

        (a)    Time Option.    

        (i)    So long as the Optionee continues to be employed by the Company
or its Subsidiaries, the Time Option shall become exercisable pursuant to the
following schedule:

Date Time Option
Becomes Exercisable

--------------------------------------------------------------------------------

  Percentage of Time Option
Shares Granted As to Which
Time Option Is Exercisable

--------------------------------------------------------------------------------

 
 
 
 
 
After the first anniversary
of the Initial Vesting Date
 
20
%
After the second anniversary
of the Initial Vesting Date
 
40
%
After the third anniversary
of the Initial Vesting Date
 
60
%
After the fourth anniversary
of the Initial Vesting Date
 
80
%
After the fifth anniversary
of the Initial Vesting Date
 
100
%

        (ii)   That portion of the Option intended to be an "incentive stock
option" within the meaning of Section 422 of the Code ("ISO") and that portion
of the Option that is not intended to be an ISO ("NQSO") shall each become
exercisable ratably in accordance with the above schedule. For example,
following the first anniversary of the Initial Vesting Date, 20% of the ISOs and
20% of the NQSOs shall be exercisable, while 40% of the ISOs and 40% of the
NQSOs shall be exercisable following the second anniversary of the Initial
Vesting Date, and so on.

        (iii)  Notwithstanding the foregoing, the Time Option shall become
immediately exercisable as to 100% of the shares of Common Stock subject to such
Time Option immediately prior to a Change of Control (but only to the extent
such Time Option has not otherwise terminated or become exercisable).

        (b)    Performance Option.    

        (i)    The Performance Option shall become exercisable with respect to
20% of the shares of Common Stock subject to such Performance Option in respect
of each Fiscal Year (beginning with the 2004 Fiscal Year) upon the achievement
by the Company of the Performance Target established in respect of each such
Fiscal Year and set forth on Appendix A attached hereto; provided, however, that
such Performance Option shall only become exercisable as to 20% of the shares of
Common Stock subject to such Performance Option (each such 20% of the shares, a
"Tranche") on December 31 of each such Fiscal Year upon the occurrence of the
Financial Statement Approval Date applicable to such Fiscal Year so long as
either (i) the Optionee remains employed with the Company on the applicable
Financial Statement Approval Date or (ii) an Interim Termination Event occurs
between such December 31 and the applicable Financial Statement Approval Date.
If the Company does not achieve its Performance Target for any given Fiscal Year
(a "Missed Year"), the Performance Option shall not become exercisable in
respect of such Fiscal Year, as set forth

5

--------------------------------------------------------------------------------

in the immediately preceding sentence; provided, however, that if the Company
achieves the Performance Target as established for any Fiscal Year subsequent to
a Missed Year, then any prior percentage of the Performance Option (the
exercisability of which had not previously occurred) in respect of prior Missed
Years shall become exercisable (but only to the extent such Performance Option
has not otherwise terminated or become exercisable). Notwithstanding the
foregoing, the Performance Option shall become exercisable as to 100% of the
shares of Common Stock subject to such Performance Option (to the extent such
Performance Option has not otherwise terminated or become exercisable) on the
eighth anniversary of the Grant Date.

        (ii)   Notwithstanding the foregoing, upon the occurrence of a Change of
Control prior to December 31, 2008, the Performance Option (to the extent such
Performance Option has not otherwise terminated) shall be exercisable with
respect to the number of shares of Common Stock equal to the total number of
shares of Common Stock subject to the Performance Option multiplied by a
fraction, (i) the numerator of which is the number of shares of Common Stock
that have previously become exercisable in respect of prior Fiscal Years, plus,
with respect to the Tranche that could have become vested in respect the Fiscal
Year in which the Change of Control occurs, if the Board determines, in its good
faith discretion that, as of the date of the Change of Control, the Company
would, but for the Change of Control, have achieved the Performance Target for
such year, a pro rata portion of such Tranche (based on the number of days that
have elapsed in such Fiscal Year through the date of the Change of Control,
relative to 365 days) (the "Pro-Rata Fiscal Year") and (ii) the denominator of
which is the maximum number of shares that could have become vested in such
completed Fiscal Years (whether or not they actually vested), plus a pro-rata
portion of the maximum number of shares that could have become vested for the
Fiscal Year in which the Change of Control occurred. (See Exhibit I for an
example of the application of this Section 3.1(b)(ii).) Notwithstanding the
foregoing provisions of this Section 3.1(b), if the Board determines, in its
good faith discretion, that, as of the date of the Change of Control, the
Company achieved the applicable Performance Target set forth in Appendix A
hereto, the Option shall become exercisable in full. The Board shall make such
determination based on an interpolation of the applicable Fiscal Year goals set
forth in Appendix A.

        (c)   Notwithstanding the foregoing, no Option which does not otherwise
become exercisable in accordance with Section 3.1(b)(i) above shall become
exercisable as to any additional shares of Common Stock following the
termination of employment of the Optionee for any reason, and any Option which
is non-exercisable as of the Optionee's termination of employment (other than
any Option which becomes exercisable in accordance with Section 3.1(b)(i)) shall
be immediately cancelled.

Section 3.2.    —Expiration of Options

        Except as otherwise provided in Section 5 or 6 of the Management
Stockholder's Agreement, the Optionee may not exercise the Options to any extent
after the first to occur of the following events:

        (a)   The tenth anniversary of the Grant Date;

        (b)   The tenth anniversary of the Grant Date if the Optionee's
employment is terminated by reason of death or Permanent Disability;

        (c)   The first anniversary of the date of the Optionee's termination of
employment by reason of Retirement, by the Company or any of its Subsidiaries
without Cause (other than by reason of Permanent Disability) or by the Optionee
for Good Reason;

6

--------------------------------------------------------------------------------

        (d)   The date of an Optionee's termination of employment with the
Company or any of its Subsidiaries by the Optionee for any reason other than as
set forth in Section 3.2(b) or (c) above (without regard to Section 5 or 6 of
the Management Stockholder's Agreement);

        (e)   The date of an Optionee's termination of employment by the Company
or any of its Subsidiaries for Cause;

        (f)    The date the Option is terminated pursuant to Section 5 or 6 of
the Management Stockholder's Agreement; or

        (g)   If the Committee so determines pursuant to Section 9 of the Plan,
the effective date of either the merger or consolidation of the Company into
another Person, or the exchange or acquisition by another Person of all or
substantially all of the Company's assets or 80% or more of its then outstanding
voting stock, or the recapitalization, reclassification, liquidation or
dissolution of the Company. At least ten days prior to the effective date of
such merger, consolidation, exchange, acquisition, recapitalization,
reclassification, liquidation or dissolution, the Committee shall give the
Optionee notice of such event if the Option has then neither been previously
fully exercised nor become unexercisable under this Section 3.2.

ARTICLE IV
EXERCISE OF OPTIONS

Section 4.1.    —Person Eligible to Exercise

        Except as otherwise provided in the Management Stockholder's Agreement,
during the lifetime of the Optionee, only he may exercise an Option or any
portion thereof. After the death of the Optionee, any exercisable portion of an
Option may, prior to the time when an Option becomes unexercisable under
Section 3.2, be exercised by his personal representative or by any person
empowered to do so under the Optionee's will or under the then applicable laws
of descent and distribution.

Section 4.2.    —Partial Exercise

        Any exercisable portion of an Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under
Section 3.2; provided, however, that any partial exercise shall be for whole
shares of Common Stock only.

Section 4.3.    —Manner of Exercise

        An Option, or any exercisable portion thereof, may be exercised solely
by delivering to the Secretary or his office all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.2:

        (a)   Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion thereof, stating that the Option or
portion thereof is thereby exercised and indicating the extent to which the
portion of the Option being exercised constitutes Incentive Stock Options, such
notice complying with all applicable rules established by the Committee;

        (b)   Full payment (in cash, by check or by a combination thereof) for
the shares with respect to which such Option or portion thereof is exercised;

        (c)   A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the shares of
stock are being acquired for his own account, for investment and without any
present intention of distributing or reselling said shares except as may be
permitted under the Securities Act of 1933, as amended (the "Act"), and then
applicable rules

7

--------------------------------------------------------------------------------

and regulations thereunder, and that the Optionee or other person then entitled
to exercise such Option or portion thereof will indemnify the Company against
and hold it free and harmless from any loss, damage, expense or liability
resulting to the Company if any sale or distribution of the shares by such
person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its reasonable discretion, take
whatever additional actions it deems reasonably necessary to ensure the
observance and performance of such representation and agreement and to effect
compliance with the Act and any other federal or state securities laws or
regulations;

        (d)   Full payment to the Company of all amounts which, under federal,
state or local law, it is required to withhold upon exercise of the Option; and

        (e)   In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option.

Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel acceptable to it to the effect that any subsequent transfer
of shares acquired on exercise of an Option does not violate the Act and may
issue stop-transfer orders covering such shares. Share certificates evidencing
stock issued on exercise of this Option shall bear an appropriate legend
referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in subsection (c) above
shall, however, not be required if the shares to be issued pursuant to such
exercise have been registered under the Act and such registration is then
effective in respect of such shares. In addition to the foregoing, after a
Public Offering (as defined in the Management Stockholder's Agreement), the
Optionee may, in the Committee's good faith discretion, make payment of the
exercise price (as required in Section 4.3(b) above) in shares of Common Stock
that the Optionee has held for at least six months or otherwise pursuant to an
irrevocable broker loan program established in accordance with applicable law.

Section 4.4.    —Conditions to Issuance of Stock Certificates

        The shares of stock deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares, which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of an Option or portion thereof prior to fulfillment of all of the
following conditions:

        (a)   The obtaining of approval or other clearance from any state or
federal governmental agency which the Committee shall, in its reasonable and
good faith discretion, determine to be necessary or advisable; and

        (b)   The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for reasons of
administrative convenience.

Section 4.5.    —Rights as Stockholder

        The holder of an Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of the Option or any portion thereof unless and until
certificates representing such shares shall have been issued by the Company to
such holder.

8

--------------------------------------------------------------------------------

ARTICLE V
MISCELLANEOUS

Section 5.1    —Administration

        The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Options. In its absolute discretion, the Board of
Directors may, at any time and from time to time, exercise any and all rights
and duties of the Committee under the Plan and this Agreement.

Section 5.2    —Options Not Transferable

        Except as provided in the Management Stockholder's Agreement, neither
the Options nor any interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means, whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and distribution.

Section 5.3.    —Shares to Be Reserved

        The Company shall, at all times during the term of the Options, reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.

Section 5.4.    —Notices

        Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice that is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall have been deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

Section 5.5.    —Titles

        Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.

Section 5.6.    —Applicability of Plan and Management Stockholder's Agreement

        The Options and the shares of Common Stock issued to the Optionee upon
exercise of the Options shall be subject to all of the terms and provisions of
the Plan and the Management Stockholder's Agreement, to the extent applicable to
the Options and such shares. In the event of any conflict between this Agreement
and the Plan, the terms of the Plan shall control. In the event of any conflict
between this Agreement or the Plan and the Management Stockholder's Agreement,
the terms of the Management Stockholder's Agreement shall control.

9

--------------------------------------------------------------------------------

Section 5.7.    —Amendment

        This Agreement may be amended only by a writing executed by the parties
hereto that specifically states that it is amending this Agreement.

Section 5.8.    —Governing Law

        The laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflicts of laws.

Section 5.9.    —Arbitration

        In the event of any controversy among the parties hereto arising out of,
or relating to, this Agreement which cannot be settled amicably by the parties,
such controversy shall be finally, exclusively and conclusively settled by
mandatory arbitration conducted in New York expeditiously in accordance with the
American Arbitration Association rules, by a single independent arbitrator. If
the parties are unable to agree on the selection of an arbitrator, then any
party may petition the American Arbitration Association for the appointment of
the arbitrator, which appointment shall be made within ten days of the petition
therefor. Either the Company or the Optionee may institute such arbitration
proceeding by giving written notice to the other party. The arbitrator shall
hold a hearing within 30 days of his or her appointment. In preparation for
their presentation at such hearing, each party may depose a maximum of four
people. Each such deposition shall last no more than six hours. Each side may
file with the arbitrator one brief, not in excess of 30 pages, excluding
exhibits. Each side shall have no more than eight hours to present its position
to the arbitrator. The hearing shall be no more than three days in length. The
decision of the arbitrator shall be final and binding upon all parties hereto
and shall be rendered pursuant to a written decision, which contains a detailed
recital of the arbitrator's reasoning. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof.

[signatures on next page]

10

--------------------------------------------------------------------------------

        IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.

 
 
ROCKWOOD HOLDINGS. INC.

 

 

By
Its:

/s/  MICHAEL W. VALENTE      

--------------------------------------------------------------------------------

Assistant Secretary

--------------------------------------------------------------------------------

 

 

OPTIONEE:

 

 

/s/  THOMAS J. RIORDAN      

--------------------------------------------------------------------------------

Thomas J. Riordan

 

 

100 Overlook Center

--------------------------------------------------------------------------------

 

 

Princeton, NJ 08540

--------------------------------------------------------------------------------

Address

Aggregate number of shares
of Common Stock for which
the Time Option granted
hereunder is exercisable
(50% of total number of shares):

 

 

 
1,000, of which
200 shall be incentive stock options and
800 shall be non-qualified stock options.
 
 
 
Aggregate number of shares
of Common Stock
for which the Performance Option
granted hereunder is exercisable
(50% of total number of shares):
 
 
 
1,000, all of which shall be non-qualified stock options.

11

--------------------------------------------------------------------------------

Appendix A
Performance Targets

        The Performance Targets are based on the Company's achievement of the
following implied equity values calculated as 8.0x the applicable fiscal year's
Consolidated EBITDA (as defined below), minus the year-end Net Debt (as defined
below, and, with Consolidated EBITDA, "Equity Values"):

Fiscal Year

--------------------------------------------------------------------------------

 
Equity Values

--------------------------------------------------------------------------------

2004:
 
$
868.7 million
2005:
 
$
1,290.1 million
2006:
 
$
1,822.2 million
2007:
 
$
2,401.6 million
2008:
 
$
2,785.0 million

For purposes hereof,

        (a)   "Consolidated EBITDA" is as defined in the Credit Agreement dated
as of July 30, 2004 among Rockwood Specialties Group, Inc., Rockwood Specialties
Limited, Rockwood Specialties International, Inc., the lenders party thereto,
Credit Suisse First Boston, acting through its Cayman Islands Branch, as
administrative agent and collateral agent, and UBS Securities LLC and Goldman
Sachs Credit Partners L.P., as co-syndication agents thereunder, filed as
Exhibit 10.1 to Rockwood Specialties Group, Inc.'s Current Report on Form 8-K
filed with the Securities and Exchange Commission on August 4, 2004 ("Credit
Agreement").

        (b)   "Net Debt" is "Consolidated Total Debt" as defined in the Credit
Agreement, plus (i) all net indebtedness of Rockwood Specialties
International, Inc. and Rockwood Specialties Consolidated, Inc. for borrowed
money outstanding on such date and (ii) all Capitalized Lease Obligations of
Rockwood Specialties International, Inc. and Rockwood Specialties
Consolidated, Inc. outstanding on such date.

        The Board shall, in good faith, fairly and appropriately adjust the
effect(s) of any significant acquisitions, divestitures, foreign exchange
movements, changes in capital structure, and other non-recurring or
extraordinary events that may affect the Equity Values, based on an objective
determination that such an adjustment is reasonably necessary. The Board's
determination of such adjustment shall be based on the Company's accounting as
set forth in its books and records and on the financial plan of the Company
pursuant to which the Equity Values were originally established.

12

--------------------------------------------------------------------------------

Exhibit I
Example

Assumptions:

(1)100 shares of stock subject to the option (irrespective of whether such
options have previously been exercised).

(2)FY 2004 Performance Target achieved, the option vested, and was exercised, as
to 20 shares.

(3)FY 2005 Performance Target not achieved.

(4)FY 2006: Change of Control occurs mid-year; Board determines the Company is
on target to achieve FY 2006 Performance Target.

Result:

        Based on the special Change of Control vesting schedule, the proportion
of the total shares subject to the option (irrespective of any prior exercise)
is determined as follows:

Total Shares subject to option
100
 
Change of Control Vesting Fraction
20 + 10
50
 
=
 
60 shares

Since 20 shares have already vested, an additional 40 shares of the original 100
shares would become vested upon the Change of Control.

13

--------------------------------------------------------------------------------

QuickLinks

Exhibit 10.7