Document:

EX-10.5

Exhibit 10.5

RPM INTERNATIONAL INC.

2005 DEFERRED COMPENSATION PLAN

(As Amended and Restated Generally Effective January 1, 2005)

 

 

RPM INTERNATIONAL INC.

2005 DEFERRED COMPENSATION PLAN

(Effective January 1, 2005)

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 1 INTRODUCTION	 	 	1
	 

	 	 	1.1	 	 	Name of Plan
	 	 	1
	 

	 	 	1.2	 	 	Purposes of Plan
	 	 	1
	 

	 	 	1.3	 	 	Effective Date
	 	 	1
	 

	 	 	1.4	 	 	Administration
	 	 	1
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 2 DEFINITIONS AND CONSTRUCTION	 	 	2
	 

	 	 	2.1	 	 	Definitions
	 	 	2
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 3 PARTICIPATION AND ELIGIBILITY	 	 	8
	 

	 	 	3.1	 	 	Participation
	 	 	8
	 

	 	 	3.2	 	 	Commencement of Participation
	 	 	8
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 4 CONTRIBUTIONS AND VESTING	 	 	9
	 

	 	 	4.1	 	 	Deferrals by Participants
	 	 	9
	 

	 	 	4.2	 	 	Election to Defer; Effect of Election Form
	 	 	10
	 

	 	 	4.3	 	 	Withholding and Crediting of Annual Deferral Amounts
	 	 	10
	 

	 	 	4.4	 	 	Vesting
	 	 	10
	 

	 	 	4.5	 	 	FICA and Other Taxes
	 	 	10
	 

	 	 	4.6	 	 	Change In Distribution Elections
Before December 31, 2008 For Code
Section 409A Amounts
	 	 	10
	 

	 	 	4.7	 	 	Suspension of Contributions
	 	 	11
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 5 ACCOUNTS	 	 	12
	 

	 	 	5.1	 	 	Establishment of Bookkeeping Accounts
	 	 	12
	 

	 	 	5.2	 	 	Subaccounts
	 	 	12
	 

	 	 	5.3	 	 	Earnings Elections
	 	 	12
	 

	 	 	5.4	 	 	Hypothetical Accounts and Creditor Status of Participants
	 	 	13
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 6 PAYMENT OF ACCOUNT	 	 	14
	 

	 	 	6.1	 	 	General
	 	 	14
	 

	 	 	6.2	 	 	Separation from Service
	 	 	14
	 

	 	 	6.3	 	 	Short-Term Payout Account
	 	 	14
	 

	 	 	6.4	 	 	Distribution upon Death
	 	 	14
	 

	 	 	6.5	 	 	Change in Control
	 	 	15
	 

	 	 	6.6	 	 	Form of Payment
	 	 	15
	 

	 	 	6.7	 	 	Latest Payment Date
	 	 	15
	 

	 	 	6.8	 	 	Valuation at Distribution
	 	 	15
	 

	 	 	6.9	 	 	Change in Date or Form of Distribution
	 	 	15
	 

	 	 	6.10	 	 	Other Distributions
	 	 	16

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	 	 	 	 	 	 	 	 	Page
	 

	 	 	6.11	 	 	Designation of Beneficiaries
	 	 	16
	 

	 	 	6.12	 	 	Change in Marital Status
	 	 	16
	 

	 	 	6.13	 	 	Withdrawals for Unforeseeable Emergency
	 	 	17
	 

	 	 	6.14	 	 	Withholding on Distribution
	 	 	17
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 7 ADMINISTRATION	 	 	18
	 

	 	 	7.1	 	 	Committee Duties
	 	 	18
	 

	 	 	7.2	 	 	Administration Upon Change In Control
	 	 	18
	 

	 	 	7.3	 	 	Agents
	 	 	19
	 

	 	 	7.4	 	 	Binding Effect of Decisions
	 	 	19
	 

	 	 	7.5	 	 	Indemnity of Committee and Benefits Review Committee
	 	 	20
	 

	 	 	7.6	 	 	Employer Information
	 	 	20
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 8 CLAIMS PROCEDURES	 	 	21
	 

	 	 	8.1	 	 	Presentation of Claim
	 	 	21
	 

	 	 	8.2	 	 	Notification of Decision
	 	 	21
	 

	 	 	8.3	 	 	Review of a Denied Claim
	 	 	22
	 

	 	 	8.4	 	 	Decision on Review
	 	 	22
	 

	 	 	8.5	 	 	Legal Action
	 	 	23
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 9 AMENDMENT AND TERMINATION	 	 	24
	 

	 	 	9.1	 	 	Amendment, Modification and Termination
	 	 	24
	 

	 	 	9.2	 	 	Actions Binding on Employers
	 	 	24
	 

	 	 	9.3	 	 	Distribution of Benefits on Plan Termination
	 	 	24
	 

	 	 	9.4	 	 	Participation By Affiliates
	 	 	25
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 10 TRUST	 	 	26
	 

	 	 	10.1	 	 	Establishment of the Trust
	 	 	26
	 

	 	 	10.2	 	 	Interrelationship of the Plan and the Trust
	 	 	26
	 

	 	 	10.3	 	 	Distributions From the Trust
	 	 	26
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 11 MISCELLANEOUS	 	 	27
	 

	 	 	11.1	 	 	Status of Plan
	 	 	27
	 

	 	 	11.2	 	 	Unsecured General Creditor
	 	 	27
	 

	 	 	11.3	 	 	Employer’s Liability
	 	 	27
	 

	 	 	11.4	 	 	Nonassignability
	 	 	27
	 

	 	 	11.5	 	 	Not a Contract of Employment
	 	 	27
	 

	 	 	11.6	 	 	Furnishing Information
	 	 	28
	 

	 	 	11.7	 	 	Terms
	 	 	28
	 

	 	 	11.8	 	 	Captions
	 	 	28
	 

	 	 	11.9	 	 	Governing Law
	 	 	28
	 

	 	 	11.10	 	 	Successors
	 	 	28
	 

	 	 	11.11	 	 	Spouse’s Interest
	 	 	28
	 

	 	 	11.12	 	 	Validity
	 	 	29
	 

	 	 	11.13	 	 	Incompetent
	 	 	29
	 

	 	 	11.14	 	 	Distribution in the Event of Taxation
	 	 	29
	 

	 	 	11.15	 	 	Insurance
	 	 	29

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	 	 	 	 	 	 	 	 	Page
	 

	 	 	11.16	 	 	Legal Fees To Enforce Rights After Change in Control
	 	 	30
	 

	 	 	11.17	 	 	Coordination with Other Benefits
	 	 	30

iii

 

RPM INTERNATIONAL INC.

2005 DEFERRED COMPENSATION PLAN

(Generally Effective January 1, 2005)

ARTICLE 1

INTRODUCTION

	 	1.1	 	Name of Plan.

     RPM International Inc. (the “Company”) hereby adopts the RPM International Inc. 2005 Deferred
Compensation Plan (the “Plan”).

	 	1.2	 	Purposes of Plan.

     The purposes of the Plan are to provide deferred compensation for a select group of management
or highly compensated Employees, including the opportunity to make elective deferrals under this
arrangement to supplement their elective contributions to the RPM International Inc. 401(k) Plan,
which are subject to certain limitations under the Code.

	 	1.3	 	Effective Date.

     The Company maintains the RPM International Inc. Deferred Compensation Plan (“Prior Plan”)
which relates to amounts deferred, earned and vested as of December 31, 2004, plus earnings and
losses attributable thereto. Deferred compensation that is earned and vested as of December 31,
2004, is permitted to be exempt under Code Section 409A if the plan under which the deferral is
made is not materially modified after October 3, 2004. The Company has elected to exempt from Code
Section 409A amounts earned and vested under the Prior Plan as of December 31, 2004, which amounts
remain subject to all terms and provisions of the Prior Plan.

     The Company now establishes the RPM International Inc. 2005 Deferred Compensation Plan,
effective January 1, 2005, which relates to (i) amounts deferred after December 31, 2004, and (ii)
any amounts deferred but not vested prior to January 1, 2005. The Plan is effective as of the
Effective Date; provided, however, that in general this document reflects the provisions of the
Plan in effect for periods on and after January 1, 2009. For the period between the Effective Date
and January 1, 2009, the Plan was operated in good faith compliance with Code Section 409A and
applicable transition guidance and relief thereunder (including but not limited to Notice 2007-86),
but this document is not intended to fully reflect the operation of the Plan during such period.

     The Plan is effective as of the Effective Date.

	 	1.4	 	Administration.

     The Plan shall be administered by the Administrator or its delegate(s), as set forth in
Section 7.1.

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ARTICLE 2

DEFINITIONS AND CONSTRUCTION

	 	2.1	 	Definitions.

     For purposes of the Plan, the following words and phrases shall have the respective meanings
set forth below, unless their context clearly requires a different meaning:

          (a) “Account” means, with respect to any Participant, the bookkeeping account or accounts
maintained by the Company to reflect the Participant’s Annual Deferral Amounts, together with all
earnings, gains and losses thereon.

          (b) “Administrator” means the individual, entity or committee named to administer the Plan
pursuant to Section 7.1 or 7.2.

          (c) “Affiliate” means any corporation or business organization during any period during which
it would be treated, together with the Company, as a single employer for purposes of Code Sections
414(b) or (c).

          (d) “Annual Bonus” means any cash compensation, in addition to Base Annual Salary and
commissions, payable to a Participant during a Plan Year under the RPM International Inc. Amended
and Restated Incentive Compensation Plan or any Employer’s annual bonus plans, but excluding
amounts payable under stock options or stock appreciation rights.

          (e) “Annual Deferral Amount” means that portion of a Participant’s Base Annual Salary, Annual
Bonus and Director Fees that a Participant defers in accordance with Article 4 for any one Plan
Year. The term Annual Deferral Amount shall include any Restricted Stock deferred under the Plan
in accordance with the rules of the Plan as in effect prior to January 1, 2006.

          (f) “Base Annual Salary” means the annual cash compensation relating to services performed
during any Plan Year, excluding bonuses, commissions, overtime, fringe benefits, stock options,
relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and
automobile and other allowances paid to a Participant for employment services rendered (whether or
not such allowances are included in the Employee’s gross income). Base Annual Salary shall be
calculated before reduction for compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include
amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3)
or 402(h) pursuant to plans established by any Employer; provided, however, that all such amounts
will be included in compensation only to the extent that had there been no such plan, the amount
would have been payable in cash to the Employee.

          (g) “Base Annual Salary Deferral” means the amount of a Participant’s Base Annual Salary which
the Participant elects to have withheld and credited to his Account pursuant to Section 4.1.

2

 

          (h) “Beneficiary” means the person or persons designated in accordance with Section 6.11 to
receive benefits in the event of the Participant’s death prior to complete distribution of his
Account.

          (i) “Benefits Review Committee” means the committee named to review denied claims under the
Plan pursuant to Section 8.3.

          (j) “Board” means the Board of Directors of the Company.

          (k) “Bonus Deferral” means the amount of a Participant’s Annual Bonus Compensation which the
Participant elects to have withheld and credited to his Account pursuant to Section 4.1.

          (l) “Change in Control” means the occurrence, at any time, of any of the following events:

          (i) Any one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting power of the stock of the
Company. However, if any one person, or more than one person acting as a group, is
considered to own more than 50% of the total fair market value or total voting power of the
stock of the Company, the acquisition of additional stock by the same person or persons is
not considered to cause a Change in Control. An increase in the percentage of stock owned by
any one person, or persons acting as a group, as a result of a transaction in which the
Company acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes of this subsection. This subsection applies only when there is a
transfer of stock of the Company (or issuance of stock of the Company) and stock in the
Company remains outstanding after the transaction.

          (ii) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Company possessing 35% or more of the
total voting power of the stock of the Company.

          (iii) A majority of members of the Board of Directors is replaced during any 12-month
period by Directors whose appointment or election is not endorsed by a majority of the
members of the Board of Directors prior to the date of the appointment or election.

          (iv) Any one person, or more than one person acting as a group. acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Company that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions.

For purposes of this Section, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or acquisition of stock,

3

 

or similar business transaction with the Company. If a person, including an entity, owns stock in
both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or
similar transaction, such shareholder is considered to be acting as a group with other shareholders
in a corporation prior to the transaction giving rise to the change and not with respect to the
ownership interest in the other corporation.

          (m) “Code” means the Internal Revenue Code of 1986, as amended from time to time. Whenever a
reference is made to a specific Section of the Code, such reference shall be deemed to include any
successor Sections of the Code having the same or similar purpose. In general, a reference to the
Code will include all lawful regulations and pronouncements promulgated thereunder; including
without limitation all applicable transition relief with respect to Code Section 409A.

          (n) “Company” means RPM International Inc., a Delaware corporation, and any successor thereto.

          (o) “Deferral Account” means (i) the sum of all of a Participant’s Annual Deferral Amounts
other than any amounts designated as Short-Term Payouts, plus (ii) investment
earnings and losses attributable thereto, less (iii) all distributions made to the Participant or
his Beneficiary pursuant to this Plan from his Deferral Account.

          (p) “Deferral Period” means with respect to any Short-Term Payout elected with respect to an
Annual Deferral Amount, the period for which such Short-Term Payout is to be deferred under the
Plan.

          (q) “Director” means a member of the Board of Directors of the Company.

          (r) “Director Fees” means the fees paid by the Company, including retainer fees and meetings
fees, as compensation for serving on the Board of Directors.

          (s) “Disability” means the Participant is determined to be totally disabled by the Social
Security Administration, or is determined to be disabled in accordance with a long-term disability
insurance program of the Company or any Affiliate.

          (t) “Effective Date” means January 1, 2005, except where a different date is specifically set
forth.

          (u) “Election Form” means the written agreement pursuant to which the Participant elects the
amount of his Base Annual Salary, Annual Bonus and/or Director Fees to be deferred pursuant to the
Plan, makes any related Short-Term Payout Election, if applicable, elects the deemed investment of
amounts deferred and the time and form of payment of such amounts and addresses such other matters
as the Administrator shall determine from time to time.

          (v) “Employee” means any common-law employee of the Company or any Affiliate.

4

 

          (w) “Employer” means the Company and any Affiliate that has been selected by the Board to
participate in the Plan.

          (x) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and all lawful regulations and pronouncements promulgated thereunder. Whenever a reference
is made to a specific Section of ERISA, such reference shall be deemed to include any successor
Sections of ERISA having the same or similar purpose.

          (y) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.

          (z) “401(k) Plan” means the RPM International Inc. 401(k) Plan, as amended and restated on
January 1, 2004, and as amended from time to time thereafter.

          (aa) “Latest Payment Date” means, with respect to any payment due hereunder, the latest date
by which such payment can be made so as to constitute payment on the date that such payment is
otherwise designated hereunder to be made under Code Section 409A, including under certain
provisions of such section which may be summarized as follows:

          (i) The date designated for payment under the terms of the Plan or a later date in the
same calendar year or, if later, the fifteenth (15th) day of the third calendar month
following the date designated for payment.

          (ii) If calculation of the amount of the benefit is not administratively practicable
due to events beyond the control of the Participant (or the Participant’s Beneficiary), any
date within the first taxable year of the Participant in which calculation of the payment is
administratively practicable.

          (iii) If making the payment on the date designated under the terms of the Plan would
jeopardize the ability of the Company and Affiliates to continue as a going concern, the
first taxable year of the Participant in which making the payment would not have such
effect.

          (iv) If there is a delay in payment by the Administrator other than with the express or
implied consent of the Participant, the first taxable year of the Participant in which the
dispute is resolved. The dispute shall be deemed resolved on the earliest date upon which:
(a) the Participant and the Administrator or the Company enter into a legally binding
settlement, (b) the Administrator or the Company concedes that an amount is payable, or (c)
the Administrator or the Company is required to make payment pursuant to a final
non-appealable judgment or other binding decision. The foregoing provisions shall apply only
if, during the period of the dispute, the Participant accepts any portion of the payment the
Administrator or the Company is willing to make (unless acceptance will result in
relinquishment of the claim to any remaining portion), and makes prompt and reasonable good
faith efforts to collect the remaining portion of the payment which meet the requirements of
Code Section 409A (including the timely notice requirements).

5

 

          (v) In the event the payment fails to fails to comply with Federal securities laws or
other laws, the earliest date at which the Company reasonably anticipates that the making of
the payment will not cause such violation.

          (vi) In the event the payment fails to be deductible under Code Section 162(m), or
meets other conditions specified by the Commissioner of the Internal Revenue Service, such
later date as may be provided under Code Section 409A.

          (bb) “Participant” means each Employee or Director who has been selected for participation in
the Plan and who has become a Participant pursuant to Article 3.

          (cc) “Plan” means the RPM International Inc. 2005 Deferred Compensation Plan, as in effect on
the Effective Date, and as amended from time to time hereafter.

          (dd) “Plan Agreement” means the written agreement under which an eligible Employee or Director
agrees to participate in the Plan in accordance with its terms.

          (ee) “Plan Year” means the twelve-consecutive month period commencing January 1 of each year
ending on the following December 31.

          (ff) “Restricted Stock” means any award of shares of restricted stock that was unvested as of
December 31, 2004 and which became vested on or before May 31, 2006.

          (gg) “Retirement” means (i) with respect to an Employee, Separation from Service from all
Employers for any reason other than death on or after attainment of age 55 and 5 Years of Service,
and (ii) with respect to a Director who is not an Employee, means a Separation from Service from
the Company on or after the attainment of age seventy (70).

          (hh) “Separation from Service” means:

          (i) with respect to any Employee who is a Participant, the separation from service
within the meaning of Code Section 409A, of such Participant with the Company and all of its
Affiliates, for any reason, including without limitation, quit, discharge, or retirement, or
a leave of absence (including military leave, sick leave, or other bona fide leave of
absence such as temporary employment by the government if the period of such leave exceeds
the greater of six months, or the period for which the Participant’s right to reemployment
is provided either by statute or by contract) or permanent decrease in service to a level
that is no more than Twenty Percent (20%) of its prior level. For this purposes, whether a
Separation from Service has occurred is determined based on whether it is reasonably
anticipated that no further services will be performed by the Participant after a certain
date or that the level of bona fide services the Participant will perform after such date
(whether as an employee or as an independent contractor) would permanently decrease to no
more than Twenty Percent (20%) of the average level of bona fide services performed (whether
as an employee or an independent contractor) over the immediately preceding 36-month period
(or the full period of services if the Participant has been providing services less than 36
months).

6

 

          (ii) with respect to any Director who is a Participant but is not an Employee, the
expiration of the term for which the Director performs services as a Director, if such
expiration constitutes a good-faith and complete termination of the term for providing
services.

          (ii) “Short-Term Payout” means that portion of a Participant’s Annual Deferral Amount that the
Participant elects to have distributed in a specific year, in accordance with Section 4.2.

          (jj) “Short-Term Payout Account” means (i) the sum of a Participant’s Short-Term Payouts, plus
(ii) investment earnings and losses attributable thereto, less (iii) all distributions made to the
Participant or his Beneficiary pursuant to this Plan from his Short-Term Payout Account. The
Short-Term Payout Account shall be subdivided into separate accounts with respect to each separate
Short-Term Payout elected by the Participant.

          (kk) “Stock” means RPM International Inc. authorized shares of common stock (par value $0.01
per share).

          (ll) “Subsidiary” means a corporation, company or other entity (a) more than 50 percent of
whose outstanding shares or securities (representing the right to vote for the election of
directors or other managing authority) are, or (b) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or unincorporated association), but
more than 50 percent of whose ownership interest representing the right generally to make decisions
for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the
Company.

          (mm) “Unforeseeable Emergency” means a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in section 152 of the Code without regard to Code
Sections 152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the Participant’s property
due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.

          (nn) “Valuation Date” means each business day.

          (oo) “Voting Power” means, at any time, the total votes relating to the then-outstanding
securities entitled to vote generally in the election of Directors.

          (pp) “Voting Stock” means, at any time, the then-outstanding securities entitled to vote
generally in the election of Directors.

          (qq) “Years of Service” means the total number of full years of employment in which a
Participant has been employed by one or more Employers. For purposes of this definition, a year of
employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the
first year of employment, commences on the Employee’s date of hiring and that, for any subsequent
year, commences on an anniversary of that hiring date.

7

 

ARTICLE 3

PARTICIPATION AND ELIGIBILITY

	 	3.1	 	Participation.

     Individuals eligible to become Participants in the Plan are (a) those Employees who are (i)
subject to the income tax laws of the United States, (ii) members of a select group of highly
compensated or management Employees, and (iii) selected by the Administrator, in its sole
discretion, as Participants, and (b) Directors. The Administrator shall notify each Participant of
his selection as a Participant. Subject to Section 3.3, an individual who satisfies the
eligibility requirements set forth in subsections (a) and (b) of Section 3.2 below shall remain
eligible to continue participation in the Plan for each Plan Year following his selection as a
Participant as long as he continues to meet such eligibility requirements.

	 	3.2	 	Commencement of Participation.

          (a) Except as provided in subsection (b) below, an Employee shall become a Participant
effective as of the first day of the Plan Year with respect to which he has timely completed and
filed an Election Form and, with respect to his first year of participation, a Plan Agreement in
accordance with Section 4.1(a).

          (b) If the Administrator so determines in its sole discretion, a newly-hired Employee or
Director who is determined to be eligible to become a Participant, and who completes a Plan
Agreement and an Election Form within 30 days after the date on which he becomes eligible to
participate, shall become a Participant on the first day of the month following the month in which
his Plan Agreement and Election Form are filed with the Administrator; provided that the
Administrator has determined that such mid-year entry does not violate the requirements of Code
Section 409A.

8

 

ARTICLE 4

CONTRIBUTIONS AND VESTING

	 	4.1	 	Deferrals by Participants.

          (a) All elections under the Plan shall be subject to any such rules as may be prescribed by
the Administrator in its sole discretion, subject to the terms of this Plan. Before the first day
of each calendar year, a Participant may file with the Administrator an Election Form pursuant to
which such Participant elects to defer Base Annual Salary or Director Fees. A Participant must
file an Election Form to defer Annual Bonus at a time prescribed by the Administrator, which time
shall be not later than six (6) months before the end of the 12 month or longer period over which
the services upon which the Annual Bonus is based are performed. Prior to June 1, 2006, a
Participant had the right to defer Restricted Stock by filing an Election Form with the
Administrator no later than six months before the Restricted Stock was scheduled to become vested.
Notwithstanding the foregoing, a Participant who commences participation in accordance with Section
3.2(b) will be considered to have made a timely deferral election.

          (b) A Participant’s deferral election shall be stated in whole percentages, subject to
maximums set forth below:

	 	 	 	 	 
	Base Annual Salary
	 	 	90	%
	Annual Bonus
	 	 	90	%
	Director Fees
	 	 	100	%
	Restricted Stock
	 	 	100	%

The minimum Annual Deferral Amount that may be elected by a Participant who is an Employee shall be
$5,000. If no election is made with respect to any category, the amount deferred for such category
shall be zero.

          (c) Short Plan Year. Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year pursuant to Section 3.2(b), the maximum Annual
Deferral Amount (i) with respect to Base Annual Salary and Director Fees shall be limited to the
amount of compensation not yet earned by the Participant as of the date the Participant becomes a
Participant in accordance with Section 3.2(b), and (ii) with respect to Annual Bonus shall be
limited to a ratable portion of the Annual Bonus determined by multiplying the total of such
amounts by the ratio of the days remaining in the performance period over the total number of days
in the performance period.

9

 

	 	4.2	 	Election to Defer; Effect of Election Form.

          (a) A Participant’s election will be valid only if the Election Form is properly completed by
the Participant, timely delivered to the Administrator in accordance with Section 4.1(a) above and
accepted by the Administrator. A Participant’s election will become irrevocable on the last day on
which such election may be made under Section 4.1(a). If no Election Form is filed for a Plan
Year, the Annual Deferral Amount for such Plan Year shall be zero.

          (b) A Participant shall designate in his Election Form what portion, if any, of his Annual
Deferral Amount shall be a Short-Term Payout and shall designate a Deferral Period for such
Short-Term Payout that shall not be less than three (3) full Plan Years following the end of the
Plan Year in which the deferral is made.

          (c) Notwithstanding the foregoing, the Company may cancel a Participant’s deferral election if
the Committee determines that he has suffered an Unforeseeable Emergency.

	 	4.3	 	Withholding and Crediting of Annual Deferral Amounts.

     For each Plan Year, the Base Annual Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Annual Salary payroll in equal amounts (or the total
equivalent if necessary to make adjustments for administrative purposes), as adjusted from time to
time for increases and decreases in Base Annual Salary. The Annual Bonus and/or Director Fees
portion of the Annual Deferral Amount shall be withheld at the time the Annual Bonus or Director
Fees are or otherwise would be paid to the Participant. Annual Deferral Amounts, if any, shall be
credited to the appropriate subaccount within a Participant’s Deferral Account as soon as
practicable after such amounts would otherwise have been paid to the Participant.

	 	4.4	 	Vesting.

     A Participant shall at all times be 100% vested in his or her Account.

	 	4.5	 	FICA and Other Taxes.

     Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount is
being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion
of the Participant’s Base Annual Salary and/or Annual Bonus that are not being deferred, in a
manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on
such Annual Deferral Amount. If necessary, the Administrator may reduce the Annual Deferral Amount
in order to comply with this Section.

	 	4.6	 	Change In Distribution Elections Before December 31, 2008 For
Code Section 409A Amounts.

     A Participant’s vested Account balance shall be paid as provided by the Plan and, where
permitted under the Plan, as elected by the Participant. At such times as permitted by the

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Administrator on or before December 31, 2008, in accordance with rules set forth by the
Administrator pursuant to guidance under Code Section 409A, a Participant may change his or her
payment elections (including any election regarding the form and timing of a payment) for vested
amounts and benefits of the Plan that are subject to Code Section 409A and that are deferred prior
to the election. A Participant may not in any calendar year, however, change any payment election
with respect to any vested amounts or benefits subject to Code Section 409A that he or she would
otherwise receive in such calendar year, or cause any such amount or benefit to be paid in such
calendar year that would otherwise not be received in such calendar year.

	 	4.7	 	Suspension of Contributions.

     Anything contained herein to the contrary notwithstanding, a Participant who receives a
distribution from the Plan due to an Unforeseeable Emergency under Section 6.14 shall not be
eligible to make deferrals hereunder for a six (6) month period after receipt of such distribution.
If required by the terms of the 401(k) Plan, a Participant who receives a hardship distribution
under the 401(k) Plan shall not be eligible to make deferrals under this Plan for a six (6) month
period after receipt of the hardship distribution.

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ARTICLE 5

ACCOUNTS

	 	5.1	 	Establishment of Bookkeeping Accounts.

     A separate bookkeeping Account or Accounts shall be maintained for each Participant. Such
Account(s) shall be credited with the Annual Deferral Amount elected by the Participant pursuant to
Section 4.1 and credited (or charged, as the case may be) with the hypothetical investment results
determined pursuant to Section 5.3, and charged with distributions made to or with respect to a
Participant.

	 	5.2	 	Subaccounts.

     Within each Participant’s bookkeeping Account, separate subaccounts shall be maintained to the
extent necessary or desirable for the administration of the Plan. In particular, Accounts shall be
subdivided into Deferral Accounts and Short-Term Payout Accounts, plus any other subaccounts the
Administrator deems necessary or desirable.

	 	5.3	 	Earnings Elections.

          (a) Amounts credited to a Participant’s Account shall be credited or charged with earnings and
losses based on one or more measurement funds (“Measurement Funds”) selected by the Participant
from among those made available under the Plan. Except as may be specifically determined by the
Administrator and communicated to Participants, Participants shall have the option to allocate the
amounts credited to their Accounts among the Measurement Funds, which allocations may be changed at
any time. The Measurement Funds shall be based on certain mutual funds and/or Company Stock, as
determined by the Administrator in its sole discretion. A Participant may elect different
investment allocations for new contributions and existing Account balances. Only whole percentages
may be elected, the minimum percentage for any allocation is 1%, and the total elections must
allocate 100% of all new contributions and 100% of all existing Account balances. If a Participant
does not elect any of the Measurement Funds, the Participant’s Account Balance shall automatically
be allocated to a Measurement Fund determined by the Administrator in its sole discretion. The
Measurement Funds and the procedures relating to the election of and any changes to such investment
elections, shall be determined by the Administrator from time to time. A Participant’s Account
shall be adjusted as of each Valuation Date to reflect investment gains and losses.

          (b) (i) The value of a Participant’s Account Balance that has been allocated to any
Measurement Fund based on Company Stock may be adjusted by the Administrator in its sole
discretion to prevent dilution or enlargement of a Participant’s rights in the event of any
reorganization, merger or other “corporate transaction” as that term is defined in
regulations promulgated under Code Section 424.

               (ii) Notwithstanding the foregoing provisions of this Subsection (b), the Company in
its sole discretion, shall have the authority to place such restrictions upon the investment
directions of any person who is subject to Section 16(b) of the Securities Exchange Act of
1934 as amended (“Insider”) as shall be appropriate to comply with such section.

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	 	5.4	 	Hypothetical Accounts and Creditor Status of Participants.

     The Accounts established under this Article 5 shall be hypothetical in nature and shall be
maintained for bookkeeping purposes only, so that Annual Deferral Amounts can be credited to the
Participant and so that earnings and losses on such amounts so credited can be credited (or
charged, as the case may be). Neither the Plan nor any of the Accounts (or subaccounts) shall hold
any actual funds or assets. The right of any person to receive one or more payments under the Plan
shall be an unsecured claim against the general assets of the Company. Any liability of the
Company to any Participant, former Participant, or Beneficiary with respect to a right to payment
shall be based solely upon contractual obligations created by the Plan. Neither the Company, the
Board, nor any other person shall be deemed to be a trustee of any amounts to be paid under the
Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create
or be construed to create a trust of any kind (other than a “rabbi trust”), or a fiduciary
relationship, between the Company and a Participant, former Participant, Beneficiary, or any other
person.

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ARTICLE 6

PAYMENT OF ACCOUNT

	 	6.1	 	General.

     A Participant (or in the event of his death, his Beneficiary) shall be entitled to receive
distribution of the vested amounts held in his Deferral Account and/or Short-term Payout Account
upon Separation from Service, expiration of the Deferral Period for a Short-Term Payout, death or a
Change in Control, in accordance with the rules set forth below. Any amounts in such Accounts that
are not vested under Section 6.4 at the time distribution begins shall be forfeited.

	 	6.2	 	Separation from Service.

     A Participant shall be entitled to receive distribution of his Deferral Account upon
Separation of Service. Payment of a Participant’s Deferral Account following a Separation from
Service will be made or will begin to be made as soon as practicable following the date of
Separation from Service for Participants who are not “specified employees” and as of the first day
of the seventh month beginning after Separation from Service for Participants who are “specified
employees.” For purposes of this Section, a “specified employee” is any Participant other than a
member of the Board of Directors who is not an Employee and any Participant who was a Participant
in the DAP Products, Inc. Supplemental Executive Retirement and Deferred Compensation Plan, as in
existence prior to its merger into the Prior Plan, unless such Participant is an officer of DAP
Products, Inc. at the time distribution would otherwise be made.

	 	6.3	 	Short-Term Payout Account.

     A Participant shall be entitled to receive payment of each Short-Term subaccount held within
his Short-Term Payout Account in accordance with the date or dates elected by the Participant in
his Election Forms. Each payment from a Participant’s Short-Term Payout Account will be made
within the first 60 days of the Plan Year following expiration of the Deferral Period with respect
to the relevant Short-Term Payout. Unless a Participant has elected otherwise in his Election Form
with respect to a Short-Term Payout, all amounts remaining in a Participant’s Short-Term Payout
Account upon a Separation from Service or upon death shall be transferred to the Participant’s
Deferral Account and thereafter distributed according to the time and form applicable for
distribution of the Participant’s Deferral Account.

	 	6.4	 	Distribution upon Death.

     In the event of a Participant’s death when any amounts remain credited to his Deferral Account
or Short-Term Payout Account, his Beneficiary shall be entitled to receive distribution of the
balance credited to such Account(s) paid in a single lump sum payment within 60 days following the
date the Administrator is provided with proof satisfactory to it of the Participant’s death.

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	 	6.5	 	Change in Control.

     Notwithstanding anything herein to the contrary, in the event of a Change in Control, a
Participant shall be entitled to receive distribution of the balance credited to his Deferral
Account and Short-Term Payout Account in a single lump sum payment within 30 days following such
Change in Control.

	 	6.6	 	Form of Payment.

     All payments hereunder shall be in the form of a single lump sum payment, except that a
Participant may elect that if he incurs a Separation from Service due to Retirement, and if his
total Account value exceeds the “applicable dollar amount” specified in Code Section 402(g), as
adjusted in accordance with Section 402(g)(5), his Deferral Account shall be paid to him in the
form of annual installments paid over a period not to exceed 10 years. Except as otherwise
determined by the Administrator in its sole discretion, all payments shall be made in the form of
cash.

	 	6.7	 	Latest Payment Date

     Any distribution under this Plan shall be treated as made on the date otherwise provided for
such payment if it is made not later than the Latest Payment Date with respect to such payment.

	 	6.8	 	Valuation at Distribution.

     The balance of a Participant’s Account shall be determined as of the Valuation Date coincident
with or next preceding the date of the event giving rise to the distribution under Section 6.2,
6.3, 6.4 or 6.5 above; provided, however, that if a “specified employee” is entitled to
distribution pursuant to 6.2 above, his Account shall be determined as of the Valuation Date
coincident or next preceding the last day of the sixth month beginning after Separation from
Service.

	 	6.9	 	Change in Date or Form of Distribution.

          (a) A Participant may elect one time to change his elected form of distribution of his
Deferral Account upon a Separation from Service due to Retirement, to another form available under
Section 6.6, in accordance with such procedures as may be adopted by the Administrator subject to
Code Section 409A.

          (b) A Participant may also elect one time to change the time of commencement of distribution
of his Deferral Account or Short-Term Payout Account to another date or dates one time, in
accordance with such procedures as may be adopted by the Administrator subject to Code Section
409A.

          (c) Any such revision to the date or form of any payment under this Section shall be made at
least 12 months prior to the first distribution date previously in effect with respect to such
amount and shall delay distribution of such amount by at least 5 years from the date the payment
would have otherwise been made hereunder.

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	 	6.10	 	Other Distributions.

     To the extent the Administrator determines to be consistent with Code Section 409A, the
Administrator may distribute all or part of a Participant’s Accounts to the extent that
acceleration of benefits is permissible in other limited circumstances pursuant to regulations and
other guidance under Code Section 409A, including but not limited to those circumstances detailed
in Sections 11.15 and 11.16.

	 	6.11	 	Designation of Beneficiaries.

          (a) Each Participant shall have the right, at any time, to designate one (1) or more persons
or an entity as Beneficiary (both primary as well as secondary) to whom benefits under this Plan
shall be paid in the event of a Participant’s death prior to complete distribution of the
Participant’s Account. Each Beneficiary designation shall be in a written form prescribed by the
Administrator and will be effective only when filed with the Administrator during the Participant’s
lifetime. A designation by a married Participant of a Beneficiary other than the Participant’s
spouse shall not be effective unless the spouse executes a written consent that acknowledges the
effect of the designation and is witnessed by a notary public, or the consent cannot be obtained
because the spouse cannot be located.

          (b) Any nonspousal designation of Beneficiary may be changed by a Participant without the
consent of such Beneficiary by the filing of a new designation with the Administrator. The filing
of a new designation shall cancel all designations previously filed.

          (c) If any Participant fails to designate a Beneficiary in the manner provided above, or if
the Beneficiary designated by a deceased Participant dies before the Participant or before complete
distribution of the Participant’s benefits, the Participant’s Beneficiary shall be the
Participant’s surviving spouse or, if there is no surviving spouse, the Participant’s estate.

	 	6.12	 	Change in Marital Status.

     If the Participant’s marital status changes after the Participant has designated a
Beneficiary, the following shall apply:

          (a) If the Participant is married at death but was unmarried when the designation was made,
the designation shall be void unless the spouse has consented to it in the manner prescribed above.

          (b) If the Participant is unmarried at death but was married when the designation was made:

          (i) The designation shall be void if the spouse was named as Beneficiary. The
designation shall remain valid if a nonspouse Beneficiary was named.

          (ii) If the Participant was married when the designation was made and is married to a
different spouse at death, the designation shall be void unless the new spouse has consented
to it in the manner prescribed above.

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	 	6.13	 	Withdrawals for Unforeseeable Emergency.

     In accordance with procedures established by the Administrator, a Participant may apply to the
Administrator for, and the Administrator may permit, a withdrawal of all or any part of a
Participant’s Deferral Account, together with all earnings, gains and losses thereon, if the
Administrator, in its sole discretion, determines that the Participant has incurred an
Unforeseeable Emergency. The amount that may be withdrawn shall be limited to the amount
reasonably necessary to relieve the Unforeseeable Emergency upon which the request is based, plus
the federal and state taxes due on the withdrawal, as determined by the Administrator. The
Administrator may require a Participant who requests a withdrawal on account of an Unforeseeable
Emergency to submit such evidence as the Administrator, in its sole discretion, deems necessary or
appropriate to substantiate the circumstances upon which the request is based and the
unavailability of other resources with which the Participant may relieve the Unforeseeable
Emergency.

	 	6.14	 	Withholding on Distribution.

     There may be withheld from any payment made in cash or in kind under the Plan such amount or
amounts as may be required for purposes of complying with the tax withholding or other provisions
of the Code or the Social Security Act or any state or local income or employment tax act or for
purposes of paying any estate, inheritance or other tax attributable to any amounts payable
hereunder.

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ARTICLE 7

ADMINISTRATION

	 	7.1	 	Committee Duties.

     Except as otherwise provided in this Article 7, this Plan shall be administered by a committee
(“Committee”) which shall consist of the Board, or such committee as the Board shall appoint.
Members of the Committee may be Participants under this Plan, except that no Participant shall vote
or act upon any matter relating solely to himself or herself. The Committee shall also have the
discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and (ii) decide or resolve any and all questions
including interpretations of this Plan, as may arise in connection with the Plan. The Committee
may, from time to time, designate one or more persons or agents to carry out any or all of its
duties hereunder. Any individual serving on the Committee who is a Participant shall not vote or
act on any matter relating solely to himself or herself. When making a determination or
calculation, the Committee shall be entitled to rely on information furnished by a Participant or
the Company.

	 	7.2	 	Administration Upon Change In Control.

          (a) Administrator. For purposes of this Plan, the Committee shall be the
“Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the
occurrence of a Change in Control, the “Administrator” shall be an independent third party selected
by the individual who, immediately prior to such event, was the Company’s Chief Executive Officer
or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”). In the event the
Chief Executive Officer or highest ranking officer is not able to perform the duties and
responsibilities of the Ex-CEO, the next highest ranking officer of the Company able to perform
such duties and responsibilities shall act as the Ex-CEO. The Committee, however, as constituted
immediately prior to a Change in Control, shall continue to act as the Administrator of this Plan
until the date on which the independent third party selected by the Ex-CEO accepts the
responsibilities of Administrator under this Plan. The Administrator shall have the discretionary
power to determine all questions arising in connection with the administration of the Plan and the
interpretation of the Plan and Trust except benefit entitlement determinations upon appeal;
provided, however, upon and after the occurrence of a Change in Control, the Administrator shall
have no power to direct the investment of Plan or Trust assets or select any investment manager or
custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the
Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2)
indemnify the Administrator against any costs, expenses and liabilities including, without
limitation, attorney’s fees and expenses arising in connection with the performance of the
Administrator hereunder, except with respect to matters resulting from the gross negligence or
willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely
information to the Administrator on all matters relating to the Plan, the Trust, the Participants
and their Beneficiaries, the Account balances of the Participants, the date and circumstances of
the Retirement, death or Termination of Employment of the Participants, and such other pertinent
information as the Administrator may reasonably require. Upon and

18

 

after a Change in Control, the Administrator may only be terminated (and a replacement
appointed) by the Ex-CEO. Upon and after a Change in Control, the Administrator may not be
terminated by the Company.

          (b) Benefit Review Committee. Upon and after the occurrence of a Change in Control,
the Benefits Review Committee, as constituted immediately prior to a Change in Control, shall
continue to review denied claims as provided in Section 8.3 of this Plan. In the event any member
of the Benefits Review Committee resigns or is unable to perform the duties of a member of the
Benefits Review Committee, successors to such members shall be selected by the Ex-CEO. Upon and
after a Change in Control, the Benefits Review Committee shall have the discretionary power and
authority to determine all questions arising in connection with the review of a denied claim as
provided in Section 8.3. Upon and after the occurrence of a Change in Control, the Company must:
(1) pay all reasonable administrative expenses and fees of the Benefits Review Committee; (2)
indemnify the Benefits Review Committee against any costs, expenses and liabilities including,
without limitation, attorney’s fees and expenses arising in connection with the performance of the
Benefits Review Committee hereunder, except with respect to matters resulting from the gross
negligence or willful misconduct of the Benefits Review Committee or its employees or agents; and
(3) supply full and timely information to the Benefits Review Committee on all matters relating to
the Plan, the Trust, the Participants and their Beneficiaries, the Account balances of the
Participants, the date and circumstances of the Retirement, death or Termination of Employment of
the Participants, and such other pertinent information as the Benefits Review Committee may
reasonably require. Upon and after a Change in Control, a member of the Benefits Review Committee
may not be removed by the Company but may only be removed (and a replacement appointed) by the
Ex-CEO.

	 	7.3	 	Agents.

     In the administration of this Plan, the Committee and the Benefits Review Committee may, from
time to time, designate one or more persons or agents and delegate to them such duties as it sees
fit (including acting through a duly appointed representative), and any reference herein to the
Committee or Benefits Review Committee shall be construed as a reference to such persons or agents.
The Committee and Benefits Review Committee may from time to time consult with counsel who may be
counsel to any Employer.

	 	7.4	 	Binding Effect of Decisions.

     Unless appealed to the Benefits Review Committee, the decision or action of the Committee or
Administrator with respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations promulgated hereunder
shall be final and conclusive and binding upon all persons having any interest in the Plan. If
such decision or action is appealed under the provisions of this Plan, then the decision or action
of the Benefits Review Committee shall be final and conclusive and binding upon all persons having
any interest in the Plan.

19

 

	 	7.5	 	Indemnity of Committee and Benefits Review Committee.

     All Employers shall indemnify and hold harmless the members of the Committee and the Benefits
Review Committee, any Employee to whom the duties of the Committee or Benefits Review Committee may
be delegated, and the Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this Plan, except in the case
of willful misconduct by the Committee, the Benefits Review Committee any of the members of the
Committee or Benefits Review Committee, any such Employee or the Administrator.

	 	7.6	 	Employer Information.

     To enable the Committee, the Benefits Review Committee and/or Administrator to perform its
functions, the Company and each Employer shall supply full and timely information to the Committee,
the Benefits Review Committee and/or Administrator, as the case may be, on all matters relating to
the compensation of its Participants, the date and circumstances of the Retirement, death or
Termination of Employment of its Participants, and such other pertinent information as the
Committee, the Benefits Review Committee and/or Administrator may reasonably require.

20

 

ARTICLE 8

CLAIMS PROCEDURES

	 	8.1	 	Presentation of Claim.

     Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary
being referred to below as a “Claimant”) may deliver to the Committee at the Company headquarters a
written claim for a determination with respect to the amounts distributable to such Claimant from
the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim
must be made within sixty (60) days after such notice was received by the Claimant. All other
claims must be made within 180 days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination desired by the Claimant.

	 	8.2	 	Notification of Decision.

     The Committee shall consider a Claimant’s claim within a reasonable time, but no later than
ninety (90) days after receiving the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the extension shall be
furnished to the Claimant prior to the termination of the initial ninety (90) day period. In no
event shall such extension exceed a period of ninety (90) days from the end of the initial period.
The extension notice shall indicate the special circumstances requiring an extension of time and
the date by which the Committee expects to render the benefit determination. The Committee shall
notify the Claimant in writing:

          (a) that the Claimant’s requested determination has been made, and that the claim has been
allowed in full; or

          (b) that the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner calculated to be
understood by the Claimant:

          (i) the specific reason(s) for the denial of the claim, or any part of it;

          (ii) specific reference(s) to pertinent provisions of the Plan upon which such denial
was based;

          (iii) a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or information is
necessary;

          (iv) an explanation of the claim review procedure set forth in Section 8.3 below; and

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          (v) a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

	 	8.3	 	Review of a Denied Claim.

     The Board shall appoint the members of a Benefits Review Committee which shall consist of
three (3) or more members. The Benefits Review Committee shall decide appeals of claim denials as
provided in this Section, have such other discretionary powers and authorities as provided by this
Section, and shall have such other discretionary powers and duties as shall from time to time be
assigned to the Benefits Review Committee by the Company. Prior to a Change in Control the members
of the Benefits Review Committee shall remain in office at the will of the Board, and the Board may
remove any of said members, from time to time, with or without cause. A member of the Benefits
Review Committee may resign upon written notice to the remaining member or members of the Benefits
Review Committee and to the Company respectively. The fact that a person is a prospective
Participant, a Participant or a former Participant shall not disqualify him from acting as a member
of the Benefits Review Committee. In case of the death, resignation or removal of any member of the
Benefits Review Committee, the remaining members shall act until a successor-member is appointed.
Upon request, the Company shall notify the Committee in writing of the names of the original
members of the Benefits Review Committee, of any and all changes in the membership of the Benefits
Review Committee, of the member designated as Chairman and the member designated as Secretary, and
of any changes in either office. Until notified of a change, the Committee shall be protected in
assuming that there has been no change in the membership of the Benefits Review Committee or the
designation of Chairman or of Secretary since the last notification was filed with it. The
Committee shall be under no obligation at any time to inquire into the membership of the Benefits
Review Committee or its officers. All communications to the Benefits Review Committee shall be
addressed to its Secretary at the headquarters address of the Company. On or before sixty (60)
days after receiving a notice from the Committee that a claim has been denied, in whole or in part,
a Claimant (or the Claimant’s duly authorized representative) may file with the Benefits Review
Committee a written request for a review of the denial of the claim. The Claimant (or the
Claimant’s duly authorized representative):

          (a) may, upon request and free of charge, have reasonable access to, and copies of, all
documents, records and other information relevant to the claim for benefits;

          (b) may submit written comments or other documents; and/or

          (c) may request a hearing, which the Benefits Review Committee, in its sole discretion, may
grant.

	 	8.4	 	Decision on Review.

     The Benefits Review Committee shall render its decision on review promptly, and no later than
sixty (60) days after the Benefits Review Committee receives the Claimant’s written request for a
review of the denial of the claim. If the Benefits Review Committee determines that special
circumstances require an extension of time for processing the claim, written notice of the
extension shall be furnished to the Claimant prior to the termination of the

22

 

initial sixty (60) day period. In no event shall such extension exceed a period of sixty (60)
days from the end of the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Benefits Review Committee
expects to render the benefit determination. In rendering its decision, the Benefits Review
Committee shall take into account all comments, documents, records and other information submitted
by the Claimant relating to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination. The decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:

          (a) specific reasons for the decision;

          (b) specific reference(s) to the pertinent Plan provisions upon which the decision was based;

          (c) a statement that the Claimant is entitled to receive, upon request and free of charge,
reasonable access to and copies of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and

          (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

	 	8.5	 	Legal Action.

     A Claimant’s compliance with the foregoing provisions of this Article is a mandatory
prerequisite to a Claimant’s right to commence any legal action with respect to any claim for
benefits under this Plan.

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ARTICLE 9

AMENDMENT AND TERMINATION

	 	9.1	 	Amendment, Modification and Termination.

     Subject to Sections 9.4 and 9.5 below, this Plan may be terminated by the Company at any time,
or from time to time, by action of the Board, and may be amended by the Company at any time, or
from time to time, by action of one or more duly authorized officers of the Company. No amendment,
modification or termination will be effective if it reduces the amounts credited to any
Participant’s Account or adversely affects the right of any Participant or Beneficiary to receive
payment of the Account as provided under this Plan, determined as of the date of the amendment,
unless an equivalent benefit is provided under another plan or program sponsored by the Company or
an Affiliate. Furthermore, no amendment, modification or termination will be effective prior to
the date permitted under Code Section 409A.

     The prior provisions notwithstanding, this Plan may be amended to:

          (a) reduce or eliminate the ability for future contributions to be credited to Participants
under this Plan;

          (b) reduce or eliminate the future deemed interest or earnings credited to the amounts held in
a Participant’s Account;

          (c) comply with any law; or

          (d) preserve the intended deferral of taxation for the benefit of all Participants’ Accounts.

	 	9.2	 	Actions Binding on Employers.

     Any amendments made to this Plan, including an amendment to terminate the Plan, will be
binding on all the Employers without the approval or consent of the Employers other than the
Company.

	 	9.3	 	Distribution of Benefits on Plan Termination.

     In the event the Company elects to amend, modify or terminate the Plan as provided under
Section 9.1, no liquidation and payment of benefits shall occur as a result. The prior provisions
notwithstanding, the Company may, in its discretion, provide by amendment to the Plan for the
liquidation and termination of the Plan where:

          (a) the termination and liquidation does not occur proximate to a downturn in the financial
health of the Company and Affiliates;

24

 

          (b) the Plan and all arrangements required to be aggregated with the Plan under Code Section
409A are terminated and liquidated;

          (c) no payments, other than those that would be payable under the terms of the Plan and the
aggregated arrangements if the termination and liquidation had not occurred, are made within twelve
(12) months of the date the Company takes all necessary action to irrevocably terminate and
liquidate the Plan;

          (d) all payments are made within twenty-four (24) months of the date the Company takes all
necessary action to irrevocably terminate and liquidate the Plan; and

          (e) the Company and its Affiliates do not adopt a new arrangement that would be aggregated
with any terminated arrangement under Code Section 409A, at any time within three (3) years
following the date of the date the Company takes all necessary action to irrevocably terminate and
liquidate the Plan.

     Notwithstanding the above, the Company may, in its discretion, provide by amendment to
liquidate and terminate the Plan where the termination and liquidation occurs within twelve (12)
months of a corporate dissolution taxed under Code Section 331, or with the approval of a
bankruptcy court pursuant to 11 United States Code Section 503(b)(1)(A), provided that all amounts
deferred under the Plan are included in the Participants’ gross incomes in the latest of the
following years (or, if earlier, the taxable year in which the amount is actually or constructively
received):

          (a) the calendar year in which the termination and liquidation occurs;

          (b) the first calendar year in which the amount is no longer subject to a substantial risk of
forfeiture; or

          (c) the first calendar year in which the payment is administratively practicable.

	 	9.4	 	Participation By Affiliates.

     Any Affiliate may adopt this Plan with the consent of the Company. An Affiliate that adopts
this Plan shall be liable for the payment of any benefit of a Participant under this Plan that
relates to employment or services provided to the Affiliate by the Participant, and neither the
Company nor any other Affiliate shall have any liability for such benefit. Each Affiliate, by
electing to participate in this Plan, appoints the Company as its agent and fully empowers the
Company to act on its behalf as it may deem appropriate in maintaining or terminating the Plan.
The adoption by the Company of any amendment to the Plan or the termination of all or any part of
the Plan will constitute and represent, without further action by any Affiliate, the approval,
adoption, ratification, or confirmation by each Affiliate of such amendment or termination and each
Affiliate shall be bound by such amendment or termination. An Affiliate may cease participation
only upon approval by the Company and only in accordance with such terms and conditions that may be
required by the Company.

25

 

ARTICLE 10

TRUST

	 	10.1	 	Establishment of the Trust.

     It is the intention of the Company that the Plan be unfunded for purposes of the Code and for
purposes of Title 1 of ERISA. No assets of the Company shall be held in any way as collateral
security for the fulfilling of the obligations of the Company under the Plan. No assets of the
Company shall be pledged or otherwise restricted in order to meet the obligations of the Plan.
Nonetheless, in order to provide assets from which to fulfill the obligations of the Participants
and their beneficiaries under the Plan, the Company may establish a Trust by a trust agreement with
a third party, the trustee, to which each Employer may, in its discretion, contribute cash or other
property, including securities issued by the Company, which trust is intended to provide for the
benefit payments under the Plan.

	 	10.2	 	Interrelationship of the Plan and the Trust.

     The provisions of the Plan shall govern the rights of a Participant to receive distributions
pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers,
Participants and the creditors of the Employers to the assets transferred to the Trust. Each
Employer shall at all times remain liable to carry out its obligations under the Plan.

	 	10.3	 	Distributions From the Trust.

     Each Employer’s obligations under the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust, and any such distribution shall reduce the Employer’s
obligations under this Plan. If the Trust terminates in accordance with its terms and benefits are
distributed from the Trust to a Participant in accordance therewith, the Participant’s benefits
under this Plan shall be reduced to the extent of such distributions.

26

 

ARTICLE 11

MISCELLANEOUS

	 	11.1	 	Status of Plan.

     The Plan is intended to be a plan that is not qualified within the meaning of Code Section
401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly compensated employees”
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be
administered and interpreted to the extent possible in a manner consistent with that intent.

	 	11.2	 	Unsecured General Creditor.

     Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of an Employer. For purposes of
the payment of benefits under this Plan, any and all of an Employer’s assets shall be, and remain,
the general, unpledged unrestricted assets of the Employer. An Employer’s obligation under the
Plan shall be merely that of an unfunded and unsecured promise to pay money in the future and the
rights of Participants and Beneficiaries shall be no greater than those of unsecured general
creditors.

	 	11.3	 	Employer’s Liability.

     An Employer’s liability for the payment of benefits shall be defined only by the Plan and the
Plan Agreement, as entered into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the Plan and his or her
Plan Agreement.

	 	11.4	 	Nonassignability.

     Neither a Participant nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, unassignable and non-transferable.
No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment,
garnishment or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by operation of law in the
event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a
spouse as a result of a property settlement or otherwise.

	 	11.5	 	Not a Contract of Employment.

     The terms and conditions of this Plan shall not be deemed to constitute a contract of
employment between any Employer and the Participant. Such employment is hereby acknowledged to be
an “at will” employment relationship that can be terminated at any time for any reason, or no
reason, with or without cause, and with or without notice, unless expressly provided in a written
employment agreement. Nothing in this Plan shall be deemed to give a

27

 

Participant the right to be retained in the service of any Employer, either as an Employee or
a Director, or to interfere with the right of any Employer to discipline or discharge the
Participant at any time.

	 	11.6	 	Furnishing Information.

     A Participant or his Beneficiary will cooperate with the Administrator by furnishing any and
all information requested by the Administrator and take such other actions as may be requested in
order to facilitate the administration of the Plan and the payments of benefits hereunder,
including but not limited to taking such physical examinations as the Administrator may deem
necessary.

	 	11.7	 	Terms.

     Whenever any words are used herein in the masculine, they shall be construed as though they
were in the feminine in all cases where they would so apply; and whenever any words are used herein
in the singular or in the plural, they shall be construed as though they were used in the plural or
the singular, as the case may be, in all cases where they would so apply.

	 	11.8	 	Captions.

     The captions of the articles, sections and paragraphs of this Plan are for convenience only
and shall not control or affect the meaning or construction of any of its provisions.

	 	11.9	 	Governing Law.

     Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to
the internal laws of the State of Ohio without regard to its conflicts of laws principles.

	 	11.10	 	Successors.

     The provisions of this Plan shall bind and inure to the benefit of the Participant’s Employer
and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

	 	11.11	 	Spouse’s Interest.

     The interest in the benefits hereunder of a spouse of a Participant who has predeceased the
Participant shall automatically pass to the Participant and shall not be transferable by such
spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass
under the laws of intestate succession.

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	 	11.12	 	Validity.

     In case any provision of this Plan shall be illegal or invalid for any reason, said illegality
or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted herein.

	 	11.13	 	Incompetent.

     If the Administrator determines in its discretion that a benefit under this Plan is to be paid
to a minor, a person declared incompetent or to a person incapable of handling the disposition of
that person’s property, the Administrator may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent or incapable
person. The Administrator may require proof of minority, incompetence, incapacity or guardianship,
as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be
a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be,
and shall be a complete discharge of any liability under the Plan for such payment amount.

	 	11.14	 	Distribution in the Event of Taxation.

          (a) Employment Taxes. Distribution shall be made from the Plan at such time or times
as the Administrator, in its sole discretion pursuant to uniform and nondiscriminatory procedures,
shall determine that amounts are due for the payment of Federal Insurance Contributions Act taxes
imposed under Code Sections 3101, 3121(a), or 3121(v)(2) on Participants’ Accounts. Such
distribution, if any, shall be made for the exclusive purpose of paying such Federal Insurance
Contributions Act taxes. In addition, distribution shall be made from the Plan at such time or
times as the Administrator, in its sole discretion pursuant to uniform and nondiscriminatory
procedures, shall determine that amounts are due for the payment of income tax at source on wages
imposed under Code Section 3401 (or the corresponding withholding provisions of applicable state,
local or foreign tax laws) as a result of the payment of the Federal Insurance Contributions Act
taxes, or are due for the payment of additional income tax at source on wages attributable to the
pyramiding of Code Section 3401 wages and taxes. Such distribution, if any, shall be made for the
exclusive purpose of paying such taxes. In no event shall the amounts distributed pursuant to this
Section exceed the amounts owed for the payment of Federal Insurance Contribution Act taxes and the
income tax withholding related to such amounts.

          (b) Distribution upon Income Inclusion under Code Section 409A. Notwithstanding
anything herein to the contrary, in the event the Plan fails to meet the requirements of Code
Section 409A, the portion of a Participant’s Account which is included in income on account of the
failure to comply with Code Section 409A shall be distributed to the Participant.

	 	11.15	 	Insurance.

     The Employers, on their own behalf or on behalf of the trustee of the Trust, and, in their
sole discretion, may apply for and procure insurance on the life of the Participant, in such
amounts and in such forms as the Trust may choose. The Employers or the trustee of the Trust,

29

 

as the case may be, shall be the sole owner and beneficiary of any such insurance. The
Participant shall have no interest whatsoever in any such policy or policies, and at the request of
the Employers shall submit to medical examinations and supply such information and execute such
documents as may be required by the insurance company or companies to whom the Employers have
applied for insurance.

	 	11.16	 	Legal Fees To Enforce Rights After Change in Control.

     The Company and each Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of a Participant’s Employer (which might then be composed of new
members) or a shareholder of the Company or the Participant’s Employer, or of any successor
corporation might then cause or attempt to cause the Company, the Participant’s Employer or such
successor to refuse to comply with its obligations under the Plan and might cause or attempt to
cause the Company or the Participant’s Employer to institute, or may institute, litigation seeking
to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of
the Plan could be frustrated. Accordingly, if, at any time in the two calendar years following a
Change in Control while a Participant continues to have an Account under the Plan, it should appear
to any Participant that the Company, the Participant’s Employer or any successor corporation has
failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the
Company, such Employer or any other person takes any action to declare the Plan void or
unenforceable or institutes any litigation or other legal action designed to deny, diminish or to
recover from any Participant the benefits intended to be provided, then the Company and the
Participant’s Employer irrevocably authorize such Participant to retain counsel of his or her
choice at the expense of the Company and the Participant’s Employer (who shall be jointly and
severally liable) to represent such Participant in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company, the Participant’s Employer or
any director, officer, shareholder or other person affiliated with the Company, the Participant’s
Employer or any successor thereto in any jurisdiction. The reasonable fees and expenses of counsel
selected from time to time by the Participant as hereinabove provided shall be paid or reimbursed
to the Participant by the Company on a regular, periodic basis no later than 30 days after
presentation by the Participant of a statement or statements prepared by such counsel in accordance
with its customary practices, up to a maximum annual amount of $250,000 in each of the two years
following the year in which occurs the Change in Control, provided that the Participant presents
such statement(s) no later than 30 days prior to the end of each such year.

	 	11.17	 	Coordination with Other Benefits.

     The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any other plan or program for
employees of the Participant’s Employer. The Plan shall supplement and shall not supersede, modify
or amend any other such plan or program except as may otherwise be expressly provided.

30

 

     IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused this RPM
International Inc. 2005 Deferred Compensation Plan to be executed effective as of December 31,
2008.

	 	 	 	 	 
	 	RPM International Inc.

 	 
	 	By:  	/s/
Janeen B. Kastner 	 
	 	 	Janeen B. Kastner 	 
	 	 	Title:  	Vice President — Corporate Benefits and
Risk Management 	 
	 

31EX-10.6

Exhibit 10.6

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (this “Agreement”) dated effective as of the
31st day of December, 2008, between RPM International Inc., a Delaware corporation (the “Company”),
and Frank C. Sullivan (“Executive”).

     WHEREAS, Executive is currently Chairman and Chief Executive Officer of the Company; and

     WHEREAS, Executive and the Company entered into the Amended and Restated Employment Agreement,
dated as of June 1, 2006 (the “Existing Agreement”), to ensure Executive’s continued employment
with the Company; and

     WHEREAS, the Company recognizes that, as with many publicly held corporations, the possibility
of a change in control may exist from time to time, and that the uncertainty and questions it may
raise among management, may result in the departure or distraction of management personnel to the
detriment of the Company and its stockholders. Accordingly, the Board of Directors has evaluated
the steps taken by the Company to ensure the continued dedication of the Executive in the event of
the disruption and uncertainty caused by the possibility of a change in control;

     WHEREAS, the Board of Directors has determined that it is in the best interests of the
stockholders of the Company to take further action to secure the continued dedication of the
Executive in the event of any threat or occurrence of a change in control of the Company; and

     WHEREAS, the Company desires to amend and restate the Existing Agreement to ensure that the
compensation and benefits provided the Executive in the event of a threat or occurrence of a change
in control will satisfy the Executive’s expectations and be competitive with those of other
corporations.

     NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein contained, the parties hereto agree as follows:

     1. Term of Employment. The Company hereby agrees to continue to employ Executive, and
Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth
herein for the period commencing as of the date hereof and expiring on May 31, 2009 (the
“Employment Period”). The Employment Period shall automatically be extended on May 31 of each year
for a period of one year from such date unless, not later than March 31 of such year, the Company
or Executive has given notice to the other party that it or he, as the case may be, does not wish
to have the Employment Period extended. In addition, in the event of a Change in Control, the
Employment Period shall automatically be extended for a period of three years beginning on the date
of the Change in Control and ending on the third anniversary of the date of such Change in Control
(unless further extended under the immediately preceding sentence). In any case, the Employment
Period may be Terminated earlier under the terms and conditions set forth herein.

 

 

     2. Position and Duties. Executive shall serve as Chairman and Chief Executive Officer
reporting to the Board of Directors of the Company. Executive shall be responsible for the general
management and operation of the Company and shall have such other powers and duties as may from
time to time be assigned by the Board of Directors of the Company; provided, however, that such
duties are consistent with his present duties and his position with the Company. Executive shall
devote substantially all his working time and efforts to the continued success of the business and
affairs of the Company.

     3. Place of Employment. In connection with his employment by the Company, Executive
shall not be required to relocate or move from his existing principal residence in Bay Village,
Ohio, and shall not be required to perform services which would make the continuance of his
principal residence in Bay Village, Ohio, unreasonably difficult or inconvenient for him. The
Company shall give Executive at least six months’ advance notice of any proposed relocation of its
Medina, Ohio offices to a location more than 50 miles from Medina, Ohio and, if Executive in his
sole discretion chooses to relocate his principal residence, the Company shall promptly pay (or
reimburse him for) all reasonable relocation expenses (consistent with the Company’s past practice
for similarly situated senior executive officers) incurred by him relating to a change of his
principal residence in connection with any such relocation of the Company’s offices from Medina,
Ohio.

     4. Compensation.

     (a) Base Salary. During the Employment Period, Executive shall receive a base salary
at the rate of not less than Eight Hundred Twenty-Five Thousand Dollars ($825,000) per annum (“Base
Salary”), payable in substantially equal monthly installments at the end of each month during the
Employment Period hereunder. It is contemplated that annually in the first quarter of each fiscal
year of the Company the Compensation Committee of the Board of Directors (the “Compensation
Committee”) will review Executive’s Base Salary and other compensation during the Employment Period
and, at the discretion of the Compensation Committee, it may recommend to the Board of Directors of
the Company for its approval an increase in Executive’s Base Salary and other compensation,
effective as of June 1 of such fiscal year, based upon Executive’s performance, then generally
prevailing industry salary scales, the Company’s results of operations, and other relevant factors.
Any increase in Base Salary or other compensation shall in no way limit or reduce any other
obligation of the Company hereunder and, once established at an increased specified rate,
Executive’s Base Salary hereunder shall not be reduced without his written consent.

     (b) Incentive Compensation. In addition to his Base Salary, Executive shall be
entitled to receive such annual cash incentive compensation (“Incentive Compensation”) for each
fiscal year of the Company during the Employment Period as the Compensation Committee may determine
in its sole discretion to recommend to the Board of Directors of the Company for its approval based
upon the Company’s results of operation and other relevant factors. Such annual Incentive
Compensation shall be received by Executive as soon as possible, but no later than 90 days after
the close of the Company’s fiscal year for which such Incentive Compensation is granted, provided
however, that to the extent the Company’s senior executive for Human Resources determines it to be
consistent with Section 409A of the Code, Executive shall have such right, if any, as may be
provided under the Deferred Compensation Plan to elect to defer annual Incentive

2

 

Compensation. Any
such election shall be made in accordance with the terms of the Deferred Compensation Plan (including provisions regarding the time and form of such deferral election) and
such procedures as may be established thereunder.

     (c) Expenses. During the Employment Period, Executive shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred by him (in accordance with
Company practice) in performing services hereunder, provided that Executive properly accounts
therefor in accordance with either Company policies or guidelines established by the Internal
Revenue Service if such are less burdensome.

     (d) Participation in Benefit Plans. During the Employment Period, Executive shall be
entitled to continue to participate in or receive benefits under the Benefit Plans, subject to and
on a basis consistent with the terms, conditions and overall administration of the Benefit Plans.
Except with respect to any benefits related to salary reductions authorized by Executive, nothing
paid or awarded to Executive under any Benefit Plan presently in effect or made available in the
future shall reduce or be deemed to be in lieu of compensation to Executive pursuant to any other
provision of this Section 4. Executive’s right to participate in any Benefit Plan shall be subject
to the applicable eligibility criteria for participation and Executive shall not be entitled to any
benefits under, or based on, any Benefit Plan for any purposes of this Agreement if Executive does
not during the Employment Period satisfy the eligibility criteria for participation in such plan.

     (e) Vacations. During the Employment Period, Executive shall be entitled to the same
number of paid vacation days in each fiscal year determined by the Company from time to time for
its other senior executive officers, but not less than four weeks in any fiscal year, to be taken
at such time or times as is desired by Executive after consultation with the Board of Directors (or
its designee) to avoid scheduling conflicts (prorated in any fiscal year during which Executive is
employed hereunder for less than the entire such year in accordance with the number of days in such
fiscal year during which he is so employed). Executive also shall be entitled to all paid holidays
given by the Company to its other salaried employees.

     (f) Other Benefits. During the Employment Period, Executive shall be entitled to
continue to receive the fringe benefits appertaining to his position with the Company in accordance
with present practice, including the use of the most recent model of a full-sized automobile.
During the Employment Period, Executive shall be entitled to the full-time use of an office and
furniture at the Company’s offices in Medina, Ohio, and shall be entitled to the full-time use of a
secretary paid by the Company.

     5. Termination Outside of Protected Period.

     (a) Events of Termination. At any time other than during the Protected Period, the
Employment Period shall Terminate immediately upon the occurrence of any of the following events:
(i) expiration of the Employment Period; (ii) the death of Executive; (iii) the expiration of 30
days after the Company gives Executive written notice of its election to Terminate the Employment
Period upon the Disability of Executive, if before the expiration of such 30-day period Executive
has not returned to the performance of his duties hereunder on a full-

3

 

time basis; (iv) the
resignation of Executive; (v) the Company’s Termination of the Employment
Period for Cause; or (vi) the Company’s Termination of the Employment Period at any time, without
Cause, for any reason or no reason. For purposes of Subsections 5(b) and 5(c), expiration of the
Employment Period upon a notice of the Company under Section 1 that it does not wish to have the
Employment Period extended shall be deemed a Termination of Employment without Cause pursuant to
Subsection 5(a)(vi) and expiration of the Employment Period upon a notice of Executive under
Section 1 that he does not wish to have the Employment Period extended shall be deemed a
resignation of Executive pursuant to Subsection 5(a)(iv).

     (b) Compensation Upon Termination. This Subsection 5(b) sets forth the payments and
benefits to which Executive is entitled under any Termination of Employment pursuant to Subsection
5(a).

          (i) Death; Disability. During any period in which Executive fails to perform his
duties hereunder as a result of Disability, Executive shall continue to receive his full Base
Salary until his employment is Terminated pursuant to Subsection 5(a)(ii) or (iii); provided that
his employment shall not be continued beyond the 29th month after such period of Disability began.
Upon Termination of the Employment Period under Subsection 5(a)(ii) or (iii), Executive shall no
longer be entitled to participate in the Benefit Plans, except as required by applicable law or as
governed by the Benefit Plans including the Group Long Term Disability Insurance in which Executive
participates immediately prior to such Termination of Employment, but Executive shall be entitled
to receive his Earned Incentive Compensation, if any, within 30 days after the Termination Date.

          (ii) Resignation or Cause. If Executive’s employment is Terminated pursuant to
Subsection 5(a)(iv) or (v), the Company shall pay Executive his full Base Salary through the
Termination Date at the rate in effect at such time. The Company shall then have no further
obligations to Executive under this Agreement and Executive shall no longer be entitled to
participate in the Benefit Plans, except as required by applicable law.

          (iii) Termination of Employment Without Cause. If Executive’s employment is
Terminated without Cause pursuant to Subsection 5(a)(vi), then in lieu of any further salary
payments to Executive for periods subsequent to the Termination Date, the Company shall pay to
Executive no later than 30 calendar days following such date, a lump sum amount equal to (A)
Executive’s Unpaid Incentive Compensation, if any, plus (B) 300% of the sum of (I) the greater of
Executive’s Base Salary currently in effect or the highest of Executive’s Base Salary in effect at
any time during the period commencing three years prior to the Termination Date; and (II) the
highest amount of Annual Incentive Compensation Executive received from the Company during the full
five fiscal years of the Company immediately preceding the Termination Date. Executive also shall
be entitled to certain continuing benefits under the terms of Subsection 5(c). Notwithstanding any
other provision of this Subsection 5(b)(iii), Subsection 5(c) or this Agreement, the Company shall
have no obligation to make the lump-sum payment referred to in this Subsection 5(b)(iii) or provide
any continuing benefits or payment referred to in Subsection 5(c) unless (X) Executive executes and
delivers to the Company a Release and Waiver of Claims and (Y) Executive refrains from revoking,
rescinding or otherwise repudiating such Release and Waiver of Claims for all applicable periods
during which Executive may revoke it.

4

 

     (c) Additional Benefits Following Termination under Subsection 5(a)(vi). This
Subsection 5(c) sets forth the benefits to which Executive shall be entitled, in addition to those
set forth in Subsection 5(b)(iii), following a Termination of the Employment Period under
Subsection 5(a)(vi). Executive shall not be entitled to the benefit of any provision of this
Subsection 5(c) following a Termination of the Employment Period under any other provision hereof.

          (i) Continuing Benefit Plans. For a period of three years following such a
Termination Date, Executive shall also be entitled to continue to participate, on the same terms
and conditions as active employees, in the Continuing Benefit Plans in which Executive participated
immediately prior to the Termination Date, except that (A) Executive shall be entitled to
Estate/Financial Planning Benefits for a period of six months following the Termination Date and
(B) if Executive’s continued participation is not possible and Executive does not continue to
participate under the terms of any such Continuing Benefit Plan, the Company shall instead pay to
Executive, promptly upon presentation to the Company of invoices or receipts for payment, the
amount Executive spends to receive comparable coverage under such a comparable plan during such
three-year period. Notwithstanding the foregoing, in no event shall any such additional amount or
comparable benefit be provided to Executive prior to or materially after the time the original
payment or benefit would have been provided, or in a tax year other than the year in which payment
would otherwise be made. Payment under Subsection 5(c)(i)(B) shall be made within 30 days of the
time Executive presents an invoice or receipt for payment for such comparable coverage, provided
Executive presents such invoice(s) or receipt(s) no later than 30 days before the end of the
taxable year following the year in which the expenses were incurred. With respect to any coverage
under a Continuing Benefit Plan with respect to which, but for this Agreement, Executive would
otherwise be entitled to continuation coverage under Code Section 4980B (“COBRA”), any benefits
provided for expenses that are incurred after the end of what would be the COBRA continuation
coverage period if Executive had elected and paid for such coverage shall be made no later than the
end of the taxable year following the taxable year in which such expense was incurred.
Notwithstanding the foregoing sentence, the Company’s obligations to Executive with respect to
continued benefits under the Continuing Benefit Plans shall end at the time Executive becomes
covered by another employer providing comparable benefits. During such continuation period,
Executive shall be responsible for paying the normal employee share of the applicable premiums for
coverage under the Continuing Benefit Plans. The Company shall have the right to modify, amend or
terminate the Continuing Benefit Plans (other than the Estate/Financial Planning Benefits)
following the Termination Date and Executive’s continued participation therein shall be subject to
such modification, amendment or termination if such modification, amendment or termination applies
generally to the then-current participants in such plan. Upon completion of the three-year period
following such a Termination Date, the Company shall afford Executive the opportunity to continue
Executive’s coverage under the Continuing Benefit Plans (other than the Estate/Financial Planning
Benefits), at Executive’s expense, for an additional period under COBRA Continuation Coverage, so
long as Executive timely elects to receive COBRA Continuation Coverage under the terms thereof and
otherwise complies with the conditions of continuation of benefits under COBRA Continuation
Coverage.

5

 

          (ii) Limited Benefit Plans. After such a Termination Date, Executive shall no longer
be entitled to participate as an active employee in, or receive any additional or new benefits
under, the Limited Benefit Plans, except as set forth in this Subsection 5(c)(ii) and except for
such benefits, if any, available under such plans to former employees. After such a Termination
Date, Executive shall be entitled to the following additional benefits:

               (A) A
lump sum payment equal to three times the annual premium most
recently paid with respect to Executive for
such executive life insurance program as may be maintained by the Company at the
Termination Date, except that if such premium is less than the next
scheduled premium as shown on the then current illustration of
coverage, the lump sum payment shall be three times such next scheduled
premium;

               (B) A lump-sum payment equal to the cash value of the benefits Executive would have received
had he continued to participate in and receive annual awards under the Restricted Stock Plan on a
basis consistent with his past practice for a period of three years after the Termination Date,
with such payment to be paid no later than 2 1/2 months following the later of the end of Executive’s
taxable year or the end of the Company’s taxable year in which the Termination Date occurs; and

               (C) The lapse of all restrictions on transfer and forfeiture provisions to which Executive’s
awards under the Restricted Stock Plan are subject, so that any restricted shares previously
awarded to Executive under such plan shall be nonforfeitable and freely transferable thereafter,
all on the terms of the Restricted Stock Plan or the agreements thereunder.

     (d) Notice of Termination. Any Termination of Employment by the Company pursuant to
Subsection 5(a)(iii), (v) or (vi) or by Executive pursuant to Subsection 5(a)(iv) shall be
communicated to the other party hereto by written notice of Termination of Employment, which shall
state in reasonable detail the facts upon which the Termination of Employment has occurred.

     (e) Set-Off. There shall be no right of set-off or counterclaim against, or delay in,
any payment by the Company to Executive of any lump sum payment made under Subsection 5(b)(iii) or
5(c)(ii)(B) or any Gross-Up Payment in respect of any claim against or debt or obligation of
Executive, whether arising hereunder or otherwise.

     6. Termination During Protected Period.

     (a) Events of Termination. During the Protected Period, the Employment Period shall
Terminate immediately upon the occurrence of any of the following events: (i) the death of
Executive; (ii) the expiration of 30 days after the Company gives Executive written notice of its
election to Terminate the Employment Period upon the Disability of Executive, if before the
expiration of such 30-day period Executive has not returned to the performance of his duties
hereunder on a full-time basis; (iii) the resignation of Executive without delivering Notice of
Termination for Good Reason; (iv) the Company’s Termination of the Employment Period for Cause; (v)
the Company’s Termination of the Employment Period at any time, without Cause, for any reason or no
reason; or (vi) Executive’s Termination of the Employment Period for Good Reason by delivery of
Notice of Termination for Good Reason to the Company during the Protected Period indicating that an
event constituting Good Reason has occurred, provided that

6

 

Executive’s failure to object in writing to an event alleged to constitute Good Reason within six
months of the date of occurrence of such event shall be deemed a waiver of such event by Executive
and Executive thereafter may not Terminate the Employment Period under this Subsection 6(a)(vi)
based on such event.

     (b) Compensation Upon Termination. This Subsection 6(b) sets forth the payments and
benefits to which Executive is entitled under any Termination of Employment pursuant to Subsection
6(a).

          (i) Death; Disability. During any period in which Executive fails to perform his
duties hereunder as a result of Disability, Executive shall continue to receive his full Base
Salary until his employment is Terminated pursuant to Subsection 6(a)(i) or (ii); provided that his
employment shall not be continued beyond the 29th month after such period of Disability began.
Upon Termination of the Employment Period under Subsection 6(a)(i) or (ii), Executive shall no
longer be entitled to participate in the Benefit Plans, except as required by applicable law or as
governed by the Benefit Plans including the Group Long Term Disability Insurance in which Executive
participates immediately prior to such Termination of Employment, but Executive shall be entitled
to receive his Earned Incentive Compensation, if any, within 30 days after the Termination Date.

          (ii) Resignation or Cause. If Executive’s employment is Terminated pursuant to
Subsection 6(a)(iii) or (iv), the Company shall pay Executive his full Base Salary through the
Termination Date at the rate in effect at such time. The Company shall then have no further
obligations to Executive under this Agreement and Executive shall no longer be entitled to
participate in the Benefit Plans, except as required by applicable law.

          (iii) Termination of Employment Without Cause or for Good Reason. If Executive’s
employment is Terminated by the Company without Cause pursuant to Subsection 6(a)(v) or by
Executive for Good Reason pursuant to Subsection 6(a)(vi), then in lieu of any further salary
payments to Executive for periods subsequent to the Termination Date, the Company shall pay to
Executive a lump sum amount equal to (A) the amount of Executive’s Unpaid Incentive Compensation,
if any, plus (B) 300% of the sum of (I) the greater of Executive’s Base Salary currently in effect
or the highest of Executive’s Base Salary in effect at any time during the period commencing three
years prior to the date of the Protected Period begins; and (II) the highest amount of Annual
Incentive Compensation Executive received from the Company during the full five fiscal years of the
Company immediately preceding the Protected Period. In the case of Termination of Employment
without Cause, payment shall be made no later than 30 calendar days following the Termination Date,
and in the case of Termination of Employment for Good Reason, payment shall be made on the first
day of the seventh month following the Termination Date. Executive also shall be entitled to
certain continuing benefits under the terms of Subsection 6(c). Notwithstanding any other
provision of this Subsection 6(b)(iii), Subsection 6(c), Section 7 or this Agreement, the Company
shall have no obligation to make the lump-sum payment referred to in this Subsection 6(b)(iii), to
provide any continuing benefits or payment referred to in Subsection 6(c), or to make any Gross-Up
Payment unless (X) Executive executes and delivers to the Company a Release and Waiver of Claims
and (Y) Executive refrains from revoking, rescinding or otherwise

7

 

repudiating such Release and Waiver of Claims for all applicable periods during which Executive may
revoke it.

     (c) Additional Benefits Following Termination under Subsections 6(a)(v) or (vi). This
Subsection 6(c) sets forth the benefits to which Executive shall be entitled, in addition to those
set forth in Subsection 6(b)(iii), following a Termination of the Employment Period under
Subsection 6(a)(v) or (vi). Executive shall not be entitled to the benefit of any provision of
this Subsection 6(c) following a Termination of the Employment Period under any other provision
hereof.

          (i) Continuing Benefit Plans. For a period of three years following such a
Termination Date, Executive shall also be entitled to continue to participate, on the same terms
and conditions as active employees, in the Continuing Benefit Plans in which Executive participated
immediately prior to the Termination Date, except that (A) Executive shall be entitled to
Estate/Financial Planning Benefits for a period of one year following the Termination Date and (B)
if Executive’s continued participation is not possible and Executive does not continue to
participate under the terms of any such Continuing Benefit Plan, the Company shall instead pay to
Executive, promptly upon presentation to the Company of invoices or receipts for payment, the
amount Executive spends to receive comparable coverage under such a comparable plan during such
three-year period. Notwithstanding the foregoing, in no event shall any such additional amount or
comparable benefit be provided to Executive prior to or materially after the time the original
payment or benefit would have been provided, or in a tax year other than the year in which payment
would otherwise be made. Payment under Subsection 6(c)(i)(B) shall be made within 30 days of the
time Executive presents an invoice or receipt for payment for such comparable coverage, provided
Executive presents such invoice(s) or receipt(s) no later than 30 days before the end of
Executive’s taxable year following the year in which the expense was incurred; provided, however,
that in the event of Termination of Employment for Good Reason, no payment or reimbursement shall
be made hereunder before the first day of the seventh month following such Termination of
Employment. With respect to any coverage under a Continuing Benefit Plan with respect to which,
but for this Agreement, Executive would otherwise be entitled to continuation coverage under Code
Section 4980B (“COBRA”), any benefits provided for expenses incurred after the end of what would be
the COBRA continuation coverage period if Executive had elected and paid for such coverage shall be
made no later than the end of the taxable year following the taxable year in which such expense was
incurred. Notwithstanding the foregoing sentence, the Company’s obligations to Executive with
respect to continued benefits under the Continuing Benefit Plans shall end at the time Executive
shall become covered by a plan of another employer providing comparable benefits. During such
continuation period, Executive shall be responsible for paying the normal employee share of the
applicable premiums for coverage under the Continuing Benefit Plans. The Company shall have the
right to modify, amend or terminate the Continuing Benefit Plans (other than the Estate/Financial
Planning Benefits) following the Termination Date and Executive’s continued participation therein
shall be subject to such modification, amendment or termination if such modification, amendment or
termination applies generally to the then-current participants in such plan. Upon completion of
the three-year period following such a Termination Date, the Company shall afford Executive the
opportunity to continue Executive’s coverage under the Continuing Benefit Plans (other than the
Estate/Financial Planning Benefits), at Executive’s expense, for an additional period under

8

 

COBRA Continuation Coverage, so long as Executive timely elects to receive COBRA Continuation
Coverage under the terms thereof and otherwise complies with the conditions of continuation of
benefits under
COBRA Continuation Coverage.

          (ii) Limited Benefit Plans. After such a Termination Date, Executive shall no longer
be entitled to participate as an active employee in, or receive any additional or new benefits
under, the Limited Benefit Plans, except as set forth in this Subsection 6(c)(ii) and except for
such benefits, if any, available under such plans to former employees. After such a Termination
Date, Executive shall be entitled to the following additional benefits:

               (A) A
lump sum payment equal to three times the annual premium most
recently paid with respect to Executive for
such executive life insurance program as may be maintained by the Company at the
Termination Date, except that if such premium is less than the next
scheduled premium as shown on the then current illustration of
coverage, the lump sum payment shall be three times such next scheduled
premium. Such lump sum payment shall be grossed up to compensate for
the tax impact of such payment and  shall occur no later than 2 1/2 months following the later of the end of the Executive’s
taxable year or the end of the Company’s taxable year in which the Termination Date occurs,
provided that in the case of Termination of Employment with Good Reason, in no event shall payment
occur prior to the first day of the seventh month following the Termination Date;

               (B) A lump-sum payment to be paid under the Restricted Stock Plan equal to the cash value of
the benefits Executive would have received had he continued to participate in and receive annual
awards under the Restricted Stock Plan on a basis consistent with his past practice for a period of
three years after the Termination Date, determined and payable in accordance with the terms of the
Restricted Stock Plan and the Company’s past practice. In the case of Termination of Employment
without Cause, payment shall be made no later than 30 calendar days following the Termination Date,
and in the case of Termination of Employment for Good Reason, payment shall be made on the first
day of the seventh month following the Termination Date; and

               (C) The lapse of all restrictions on transfer and forfeiture provisions to which Executive’s
awards under the Restricted Stock Plan are subject, so that any restricted shares previously
awarded to Executive under such plan shall be nonforfeitable and freely transferable thereafter,
all on the terms of the Restricted Stock Plan or the agreements thereunder.

     (d) Notice of Termination. Any Termination of Employment by the Company pursuant to
Subsection 6(a)(ii), (iv) or (v) or by Executive pursuant to Subsection 6(a)(iii) shall be
communicated to the other party hereto by written notice of Termination, which shall state in
reasonable detail the facts upon which the Termination of Employment has occurred. A Termination
of Employment pursuant to Subsection 6(a)(vi) shall be communicated by Notice of Termination for
Good Reason.

     (e) Notice of Change in Control. The Company shall give Executive written notice of
the occurrence of any event constituting a Change in Control as promptly as practical, and in no
case later than 10 calendar days, after the occurrence of such event.

9

 

     (f) Deemed Termination After Change in Control. In the event of a Termination of
Employment of Executive by the Company without Cause following the commencement of any discussion
with or communication from a third party that ultimately results in a Change in Control that is
also a “change in control” within the meaning of Section 409A, but prior to the date of such a
Change in Control, and Executive can reasonably demonstrate that such Termination of Employment was
made in connection with or in anticipation of such Change in Control, then Executive shall be
entitled to the benefits provided under Subsections 6(b)(iii) and 6(c) and Section 7, provided that
(i) no such payments or benefits shall be provided prior to such Change in Control; (ii) any
payments shall be payable within the various timeframes specified in Subsections 6(b)(iii) and 6(c)
and Section 7, but with such timeframes beginning as of the date of such Change in Control instead
of as of the date of Termination of Employment; and (iii) any reimbursements or in-kind benefits
shall be made or provided within the timeframes specified within the applicable provisions of
regulations under Section 409A in order to be exempt from or, if necessary, compliant with Section
409A.

     (g) Set-Off. There shall be no right of set-off or counterclaim against, or delay in,
any payment by the Company to Executive of the Lump-Sum Payment or any Gross-Up Payment in respect
of any claim against or debt or obligation of Executive, whether arising hereunder or otherwise.

     (h) Interest on Overdue Payments. Without limiting the rights of Executive at law or
in equity, if the Company fails to make the Lump-Sum Payment or any Gross-Up Payment on a timely
basis, the Company shall pay interest on the amount thereof at an annualized rate equal to the rate
in effect, at the time such payment should have been made, under the 401(k) Plan for loans to
participants in such plan.

     (i) Outplacement Assistance. Promptly after a request in writing from Executive
following a Termination of the Employment Period under Subsection 6(a)(v) or (vi), the Company
shall retain a professional outplacement assistance service firm reasonably acceptable to
Executive, at the Company’s expense, to provide outplacement assistance to Executive during the
Protected Period. In the event Executive pays for such services, the Company shall reimburse
Executive within 30 days from the time Executive presents an invoice or receipt for such expenses,
provided Executive presents such receipt(s) no later than 30 days before the end of Executive’s
second taxable year following the year in which such expenses were incurred. Any outplacement
services shall be appropriate to Executive’s position with the Company, as determined by the
outplacement assistance service firm. Executive shall not be entitled to such services, however,
following a Termination of the Employment Period under Subsection 6(a)(i), (ii), (iii) or (iv).

     (j) Omnibus Plan. If Executive receives Awards (as defined therein) under the Omnibus
Plan and a Change in Control occurs as determined under the Omnibus Plan, then Executive shall be
entitled to the lapse of transfer restrictions imposed on any Award granted to Executive under the
Omnibus Plan, all as determined under and subject to the terms of the Omnibus Plan.

     (k) Payments upon Termination of Employment for Good Reason. Notwithstanding anything
herein to the contrary, in the event Executive’s employment

10

 

Terminates for Good Reason, no payments or reimbursements to which Executive would otherwise be
entitled shall be paid prior to the first day of the seventh month following his Termination Date.

     7. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be
determined (as hereafter provided) that any payment or distribution by the Company or any of its
Affiliates to or for the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including without limitation any stock
option, performance share, performance unit, restricted stock, stock appreciation right or similar
right, or the lapse or termination of any restriction on, or the vesting or exercisability of, any
of the foregoing (individually and collectively, a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being
considered “contingent on a change in ownership or control” of the Company, within the meaning of
Section 280G of the Code (or any successor provision thereto), or to any similar tax imposed by
state or local law, or to any interest or penalties with respect to such taxes (such tax or taxes,
together with any such interest and penalties, being hereafter collectively referred to as the
“Excise Tax”), then Executive shall be entitled to receive an additional payment or payments
(individually and collectively, a “Gross-Up Payment”). The Gross-Up Payment shall be in an amount
such that, after payment by Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

     (b) Subject to the provisions of Subsection 7(f), all determinations required to be made under
this Section 7, including whether an Excise Tax is payable by Executive and the amount of such
Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to Executive and
the amount of such Gross-Up Payment, if any, shall be made (i) by PricewaterhouseCoopers (or its
successor) (the “Accounting Firm”), regardless of any services that PricewaterhouseCoopers (or its
successor) has performed or may be performing for the Company, or (ii) if PricewaterhouseCoopers
(or its successor) is serving as accountant or auditor for the individual, entity or group
effecting a Change in Control, or cannot (because of limitations under applicable law or otherwise)
make the determinations required to be made under this Section 7, then by another nationally
recognized accounting firm selected by Executive and reasonably acceptable to the Company (which
accounting firm shall then be the “Accounting Firm” hereunder). The Company, or Executive if he
selects the Accounting Firm, shall direct the Accounting Firm to submit its determination and
detailed supporting calculations to both the Company and Executive within 30 calendar days after
the Termination Date, if applicable, and any such other time or times as may be requested by the
Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by
Executive, the Company shall pay the required Gross-Up Payment to Executive within five business
days after the Company’s receipt of such determination and calculations with respect to any Payment
to Executive. If the Accounting Firm determines that no Excise Tax is payable by Executive, it
shall, at the same time as it makes such determination, furnish the Company and Executive an

11

 

opinion that Executive has substantial authority not to report any Excise Tax on his federal,
state or local income or other tax return. As a result of the uncertainty in the application of
Section 4999 of the Code (or any successor provision thereto) and the possibility of similar
uncertainty regarding applicable state or local tax law at the time of any determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by
the Company should have been made (an “Underpayment”), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant
to Subsection 7(f) and Executive thereafter is required to make a payment of any Excise Tax,
Executive shall direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to both the Company
and Executive as promptly as possible. Any such Underpayment shall be promptly paid by the Company
to, or for the benefit of, Executive as a Gross-Up Payment within five business days after the
Company’s receipt of such determination and calculations. Notwithstanding any of the foregoing, if
the Executive’s Termination of Employment was for Good Reason, in no event shall any such payments
be made before the first day of the seventh month following such Termination of Employment.

     (c) The Company and Executive shall each provide the Accounting Firm access to and copies of
any books, records and documents in the possession of the Company or Executive, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and calculations contemplated by
Subsection 7(b). Any determination by the Accounting Firm as to the amount of any Gross-Up Payment
or Underpayment shall be binding upon the Company and Executive.

     (d) The federal, state and local income or other tax returns filed by Executive shall be
prepared and filed on a consistent basis with the determination of the Accounting Firm with respect
to the Excise Tax payable by Executive. Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with
any amendments) of his federal income tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the Company, evidencing such payment.
If prior to the filing of Executive’s federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment
should be reduced, Executive shall within five business days pay to the Company the amount of such
reduction.

     (e) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Subsection 7(b) shall be borne by the Company.

     (f) Executive shall notify the Company in writing of any claim by the Internal Revenue Service
or any other taxing authority that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notification shall be given as promptly as practicable but no later than 10
business days after Executive actually receives notice of such claim and Executive shall further
apprise the Company of the nature of such claim and the date

12

 

on which such claim is requested to be paid (in each case, to the extent known by Executive).
Executive shall not pay such claim prior to the earlier of (x) the expiration of the
30-calendar-day period following the date on which he gives such notice to the Company and (y) the
date that any payment of an amount with respect to such claim is due. If the Company notifies
Executive in writing prior to the expiration of such period that it desires to contest such claim,
Executive shall:

          (i) provide the Company with any written records or documents in his possession relating to
such claim reasonably requested by the Company;

          (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney competent in respect of the subject matter and reasonably
selected by the Company;

          (iii) cooperate with the Company in good faith in order effectively to contest such claim; and

          (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
interest and penalties) incurred in connection with such contest and shall indemnify and hold
harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as a result of such representation and payment
of costs and expenses. Without limiting the foregoing provisions of this Subsection 7(f), the
Company shall control all proceedings taken in connection with the contest of any claim
contemplated by this Subsection 7(f) and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim (provided, however, that Executive may participate therein at his own cost and
expense) and may, at its option, either direct Executive to pay the tax claimed and file for a
refund or contest the claim in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall determine; provided, however, that if the
Company directs Executive to pay the tax claimed and file for a refund, the Company shall pay to
Executive a Gross-up Payment as defined in (a) above with respect to the tax claimed and otherwise
shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income
or other tax, including interest or penalties with respect thereto, imposed with respect to such
payment, and provided further, however, that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control
of any such contested claim shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing authority.

13

 

     (g) If, after the receipt by Executive of an amount paid by the Company pursuant to Subsection
7(f), Executive receives any refund with respect to such claim, Executive shall (subject to the
Company’s complying with the requirements of Subsection 7(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after any taxes
applicable thereto).

     8. Binding Agreement; Successors. This Agreement shall inure to the benefit of and be
binding upon Executive’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s
devisee, legatee, or other designee or, if there be no such designee, to Executive’s estate. This
Agreement shall inure to the benefit of and be binding upon the successors and assigns of the
Company, including, without limitation, any person acquiring directly or indirectly all or
substantially all of the assets of the Company, whether by merger, consolidation, sale or otherwise
(and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement).
The Company shall require any such successor to assume and agree to perform this Agreement.
Failure by the Company to obtain such succession shall be a breach of this Agreement and shall
entitle Executive to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to hereunder if the Executive were to Terminate the Executive’s
employment for Good Reason during the Protected Period, except that, for purposes of implementing
the foregoing, the date on which any such succession becomes effective shall be deemed the
Termination Date.

     9. Restrictive Covenants.

     (a) Non-Competition. During the Employment Period and for a period of two years
following the Termination Date, Executive shall not, directly or indirectly, own, manage, operate,
control or participate in the ownership, management, operation or control of, or be connected as an
officer, employee, partner or director with, or have any financial interest in, any business which
is in substantial competition with any business conducted by the Company or by any group, division
or Subsidiary of the Company, in any area where such business is being conducted at the time of
such Termination of Employment. Ownership of 5% or less of the voting stock of any corporation
which is required to file periodic reports with the Securities and Exchange Commission under the
Exchange Act shall not constitute a violation hereof.

     (b) Non-Solicitation. Executive shall not directly or indirectly, at any time during
the Employment Period and for two years thereafter, solicit or induce or attempt to solicit or
induce any employee, sales representative or other representative, agent or consultant of the
Company or any group, division or Subsidiary of the Company (collectively, the “RPM Group”) to
terminate his, her or its employment, representation or other relationship with the RPM Group or in
any way directly or indirectly interfere with such a relationship.

14

 

     (c) Confidentiality.

          (i) Executive shall keep in strict confidence, and shall not, directly or indirectly, at any
time during or after the Employment Period, disclose, furnish, publish, disseminate, make available
or, except in the course of performing his duties of employment hereunder, use any Confidential
Information. Executive specifically acknowledges that all Confidential Information, whether
reduced to writing, maintained on any form of electronic media, or maintained in the mind or memory
of Executive and whether compiled by the RPM Group, and/or Executive, derives independent economic
value from not being readily known to or ascertainable by proper means by others who can obtain
economic value from its disclosure or use, that reasonable efforts have been made by the RPM Group
to maintain the secrecy of such information, that such information is the sole property of the RPM
Group and that any disclosure or use of such information by Executive during the Employment Period
(except in the course of performing his duties and obligations hereunder) or after the Termination
of the Employment Period shall constitute a misappropriation of the RPM Group’s trade secrets.

          (ii) Executive agrees that upon Termination of the Employment Period, for any reason,
Executive shall return to the Company, in good condition, all property of the RPM Group, including,
without limitation, the originals and all copies of any materials, whether in paper, electronic or
other media, that contain, reflect, summarize, describe, analyze or refer or relate to any items of
Confidential Information.

     10. Notice. All notices, requests and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a) when hand delivered, (b) when
dispatched by electronic facsimile transmission (with receipt electronically confirmed), (c) one
business day after being sent by recognized overnight delivery service, or (d) three business days
after being sent by registered or certified mail, return receipt requested, postage prepaid, and in
each case addressed as follows (or addressed as otherwise specified by notice under this Section):

If to Executive:

Frank C. Sullivan

                                                      

                                                      

 

15

 

If to Company:

RPM International Inc.

2628 Pearl Road

P.O. Box 777

Medina, Ohio 44258

Facsimile: 330-225-6574

Attn: Secretary

     11. Withholding. The Company may withhold from any amounts payable under or in
connection with this Agreement all federal, state, local and other taxes as may be required to be
withheld by the Company under applicable law or governmental regulation or ruling.

     12. Amendments; Waivers. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing, and is signed by
Executive and by another executive officer of the Company. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent time.

     13. Jurisdiction. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Ohio, without giving effect to the conflict
of law principles of such State. Executive and the Company each agree that the state and federal
courts located in the State of Ohio shall have jurisdiction in any action, suit or proceeding
against Executive or the Company based on or arising out of this Agreement and each of Executive
and the Company hereby (a) submits to the personal jurisdiction of such courts, (b) consents to
service of process in connection with any such action, suit or proceeding and (c) waives any other
requirement (whether imposed by statute, rule of court or otherwise) with respect to personal
jurisdiction, venue or service of process.

     14. Equitable Relief. Executive and the Company acknowledge and agree that the
covenants contained in Section 9 are of a special nature and that any breach, violation or evasion
by Executive of the terms of Section 9 will result in immediate and irreparable injury and harm to
the Company, for which there is no adequate remedy at law, and will cause damage to the Company in
amounts difficult to ascertain. Accordingly, the Company shall be entitled to the remedy of
injunction, as well as to all other legal or equitable remedies to which the Company may be
entitled (including, without limitation, the right to seek monetary damages), for any breach,
violation or evasion by Executive of the terms of Section 9.

     15. Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. In the event that any provision of Section
9 is found by a court of competent jurisdiction to be invalid or unenforceable as against public
policy, such court shall exercise its discretion in reforming such provision to the end that

16

 

Executive shall be subject to such restrictions and obligations as are reasonable under the
circumstances and enforceable by the Company.

     16. Code Section 409A. The benefits under this Agreement generally are intended to
meet the requirements for exemption from Code Section 409A (including without limitation the
exemptions for restricted property, short-term deferrals, separation payments and reimbursements,
and welfare benefits) and shall be so construed and administered; however, to the extent any
benefit hereunder is not exempt from the application of Code Section 409A, it shall be administered
in compliance with Code Section 409A. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may be amended as the Company may determine, with the consent of the
Executive (which shall not be unreasonably withheld), to better secure exemption of each benefit
hereunder from, or if exemption is not reasonably available for such a benefit, to better comply
with, the requirements of Code Section 409A.

     17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument.

     18. Headings; Definitions. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Agreement. Certain
capitalized terms used in this Agreement are defined on Schedule A attached hereto.

     19. No Assignment. This Agreement may not be assigned by either party without the
prior written consent of the other party, except as provided in Section 8.

     20. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the employment of Executive and supersedes any and all other agreements
(including the Existing Agreement), either oral or in writing, with respect to the employment of
Executive.

     21. Enforcement Costs. The Company is aware that upon the occurrence of a Change in
Control the Board of Directors or a stockholder of the Company may then cause or attempt to cause
the Company to refuse to comply with its obligations under this Agreement, or may cause or attempt
to cause the Company to institute, or may institute, litigation seeking to have this Agreement
declared unenforceable, or may take, or attempt to take, other action to deny Executive the
benefits intended under this Agreement. In these circumstances, the purpose of this Agreement
could be frustrated. It is the intent of the Company that Executive not be required to incur the
expenses associated with the enforcement of his rights under this Agreement by litigation or other
legal action because the cost and expense thereof would substantially detract from the benefits
intended to be extended to Executive hereunder, nor be bound to negotiate any settlement of his
rights hereunder under threat of incurring such expenses. Accordingly, if at any time in the two
calendar years following a Termination of Employment during the Protected Period, it should appear
to Executive that the Company has failed to comply with any of its obligations under this Agreement
or the Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action designed to deny, diminish or
recover from Executive the benefits intended to be provided to Executive hereunder, and Executive
has

17

 

complied with all of his obligations under Section 9, then the Company irrevocably authorizes
Executive from time to time to retain counsel of his choice at the expense of the Company as
provided in this Section 21 to represent Executive in connection with the initiation or defense of
any litigation or other legal action, whether by or against the Company or any Director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction. The Company’s
obligations under this Section 21 shall not be conditioned on Executive’s success in the
prosecution or defense of any such litigation or other legal action. Notwithstanding any existing
or prior attorney-client relationship between the Company and such counsel, the Company irrevocably
consents to Executive entering into an attorney-client relationship with such counsel, and in that
connection the Company and Executive agree that a confidential relationship shall exist between
Executive and such counsel. The reasonable fees and expenses of counsel selected from time to time
by Executive as hereinabove provided shall be paid or reimbursed to Executive by the Company on a
regular, periodic basis no later than 30 days after presentation by Executive of a statement or
statements prepared by such counsel in accordance with its customary practices, up to a maximum
annual amount of $250,000 in each of the two calendar years following the year in which occurs such
Termination of Employment within the Protected Period; provided, that Executive presents such
statement(s) no later than 30 days prior to the end of each such year, and provided further, that
if Executive’s Termination of Employment was for Good Reason, no such payment shall be made before
the first day of the seventh month following such Termination of Employment. Notwithstanding the
foregoing, this Section 21 shall not apply at any time unless a Change in Control has occurred.

[Remainder of page intentionally blank]

18

 

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year
first above written.

	 	 	 	 	 
	 	RPM INTERNATIONAL INC.

 	 
	 	By:  	/s/
Janeen B. Kastner 	 
	 	 	Janeen B. Kastner, Vice President — 	 
	 	 	Corporate Benefits and Risk Management

 	 
	 	The “Company” 	 
	 
	 	 	 
	 	/s/
Frank C. Sullivan
 	 
	 	Frank C. Sullivan 	 
	 	“Executive” 	 

19

 

	 	 	 	 	 

Schedule A

Certain Definitions

     As used in this Agreement, the following capitalized terms shall have the following meanings:

“401(k) Plan” means the RPM International Inc. 401(k) Trust and Plan and any successor plan
or arrangement.

“Affiliate” of a specified entity means any entity during any period during which it would
be treated, together with the Company, as a single employer for purposes of Section 414(b)
and (c) of the Code.

“Annual Incentive Compensation” means an amount equal to the amount of Incentive
Compensation paid to Executive (without regard to any reduction thereof elected by Executive
pursuant to any qualified or non-qualified compensation reduction arrangement maintained by
the Company, including, without limitation, the Deferred Compensation Plan) for a completed
fiscal year (or for such shorter period during which Executive has been employed by the
Company) preceding the Termination Date in which the Company paid Incentive Compensation to
executive officers of the Company or in which the Company considered and declined to pay
Incentive Compensation to executive officers of the Company.

“Benefit Plans” means the Continuing Benefit Plans and the Limited Benefit Plans.

“Cause” means a determination of the Board of Directors (without the participation of
Executive) of the Company pursuant to the exercise of its business judgment, that either of
the following events has occurred: (a) Executive has engaged in willful and intentional
acts of dishonesty or gross neglect of duty or (b) Executive has breached Section 9.

“Change in Control” shall mean the occurrence at any time of any of the following events:

     (a) The Company is merged or consolidated or reorganized into or with another
corporation or other legal person or entity, and as a result of such merger, consolidation
or reorganization less than a majority of the combined voting power of the then-outstanding
securities of such corporation, person or entity immediately after such transaction are held
in the aggregate by the holders of Voting Stock immediately prior to such transaction;

     (b) The Company sells or otherwise transfers all or substantially all of its assets to
any other corporation or other legal person or entity, and less than a majority of the
combined voting power of the then-outstanding securities of such corporation, person or
entity immediately after such sale or transfer is held in the aggregate by the holders of
Voting Stock immediately prior to such sale or transfer;

A-1

 

     (c) There is a report filed on Schedule 13D or Schedule TO (or any successor schedule,
form or report), each as promulgated pursuant to the Exchange Act, disclosing that any
person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act) has become the beneficial owner (as the term “beneficial owner” is defined under Rule
13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities
representing 15% or more of the Voting Power;

     (d) The Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) that a change in control of the
Company has or may have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction;

     (e) If during any period of two consecutive years, individuals, who at the beginning of
any such period, constitute the Directors cease for any reason to constitute at least a
majority thereof, unless the nomination for election by the Company’s stockholders of each
new Director was approved by a vote of at least two-thirds of the Directors then in office
who were Directors at the beginning of any such period; or

     (f) The stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

     Notwithstanding the foregoing provisions of paragraphs (c) and (d) of this definition,
a “Change in Control” shall not be deemed to have occurred for purposes of this Agreement
(i) solely because (A) the Company, (B) a Subsidiary, or (C) any Company-sponsored employee
stock ownership plan or other employee benefit plan of the Company or any Subsidiary, or any
entity holding shares of Voting Stock for or pursuant to the terms of any such plan, either
files or becomes obligated to file a report or proxy statement under or in response to
Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial ownership by it of
shares of Voting Stock or because the Company reports that a change in control of the
Company has or may have occurred or will or may occur in the future by reason of such
beneficial ownership, (ii) solely because any other person or entity either files or becomes
obligated to file a report on Schedule 13D or Schedule TO (or any successor schedule, form
or report) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting
Stock, but only if both (A) the transaction giving rise to such filing or obligation is
approved in advance of consummation thereof by the Company’s Board of Directors and (B) at
least a majority of the Voting Power immediately after such transaction is held in the
aggregate by the holders of Voting Stock immediately prior to such transaction, or (iii)
solely because of a change in control of any Subsidiary.

“COBRA Continuation Coverage” means the health care continuation requirements under the
federal Consolidated Omnibus Budget Reconciliation Act, as amended, Part VI

A-2

 

of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended,
and Code Section 4980B(f), or any successor provisions thereto.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Confidential Information” means trade secrets and confidential business and technical
information of the RPM Group and its customers and vendors, without limitation as to when or
how Executive may have acquired such information. Such Confidential Information shall
include, without limitation, the RPM Group’s manufacturing, selling and servicing methods
and business techniques, training, service and business manuals, promotional materials,
vendor and product information, product development plans, internal financial statements,
sales and distribution information, business plans, marketing strategies, pricing policies,
corporate alliances, business opportunities, the lists of actual and potential customers as
well as other customer information, technology, know-how, processes, data, ideas,
techniques, inventions (whether patentable or not), formulas, terms of compensation and
performance levels of RPM Group employees, and other information concerning the RPM Group’s
actual or anticipated business, research or development, or which is received in confidence
by or for the RPM Group from any other person and all other confidential information to the
extent that such information is not intended by the RPM Group for public dissemination.

“Continuing Benefit Plans” means only the following employee benefit plans and arrangements
of the Company in effect on the date hereof, or any successor plan or arrangement in which
Executive is eligible to participate immediately before the Termination Date:

	 	(a)	 	The RPM International Inc. Health and Welfare Plan (including
medical, dental and prescription drug benefits) as in existence on the date of
this Agreement, or any successor plan that provides medical, dental and
prescription drug benefits, but only to the extent of such benefits; and
	 
	 	(b)	 	Estate/Financial Planning Benefits.

“Deferred Compensation Plan” means the RPM International Inc. Deferred Compensation Plan, as
amended from time to time, in which executive officers of the Company are eligible to
participate and any such successor plan or arrangement.

“Director” means a member of the Board of Directors of the Company.

“Disability” means any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less
than 12 months, and that makes Executive eligible for benefits under any long-term
disability program of the Company or an Affiliate. The Company and Executive acknowledge
and agree that the essential functions of Executive’s position are unique and critical to
the Company and that a disability condition that causes Executive to be unable to perform
the essential functions of his position under the circumstances described above will
constitute an undue hardship on the Company.

A-3

 

“Earned Incentive Compensation” means the sum of:

	 	(a)	 	The Unpaid Incentive Compensation; and
	 
	 	(b)	 	An amount equal to the Annual Incentive Compensation for the most recent completed
fiscal year (or for such shorter period during which Executive has been employed by the
Company) preceding the Termination Date multiplied by a fraction, the numerator of which is
the number of days in the current fiscal year of the Company that have expired before the
Termination Date and the denominator of which is 365.

“Estate/Financial Planning Benefits” means those estate and financial planning services (a)
in effect on the date hereof in which Executive is eligible to participate or (b) that the
Company makes available at any time before the Termination Date to the executives and key
management employees of the Company and in which Executive is then eligible to participate.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.

“Executive Life Insurance” means the RPM International Inc. Split Dollar Executive Life
Insurance Plan in effect on the date hereof or any successor arrangement that the Company
makes available at any time before the Termination Date to the executives and key management
employees of the Company and in which Executive is then eligible to participate.

“Good Reason” means a determination by Executive made in good faith that, upon or after
the occurrence of a Change in Control, any of the following events has occurred without
Executive’s express written consent: (a) a significant reduction in the nature or scope of
the title, authority or responsibilities of Executive from those held by Executive
immediately prior to the Change in Control; (b) a reduction in Executive’s Base Salary from
the amount in effect on the date of the Change in Control; (c) a reduction in Executive’s
Annual Incentive Compensation from the amount of Executive’s Annual Incentive Compensation
for the fiscal year preceding the fiscal year in which the Termination Date occurs, unless
such reduction results solely from the Company’s results of operations; (d) the failure by
the Company to offer to Executive an economic value of benefits reasonably comparable to the
economic value of benefits under the Benefit Plans in which Executive participates at the
time of the Change in Control; (e) the purported Termination of the Executive’s Employment
which is not effected pursuant to Sections 6(d) and 10 of this Agreement, which purported
Termination of Employment shall not be effective for purposes of this Agreement; (f) the
failure by the Company to comply with and satisfy Section 8 of this Agreement, relating to
the assumption of the Agreement by any successor entity; or (g) a material breach by the
Company of the terms of Section 3.

“Gross-Up Payment” shall have the meaning given such term in Section 7.

A-4

 

“Group Long Term Disability Insurance” means the Group Long Term Disability Insurance
sponsored by the Company, as currently in effect and as the same may be amended from time to
time, and any successor long-term disability insurance sponsored by the Company in which the
executives and key management employees of the Company are eligible to participate.

“Incentive Compensation” shall have the meaning given such term in Section 4(b).

“Life and Disability Welfare Plan” means the RPM International Inc. Life and Disability
Welfare Plan, which includes Group Life Insurance, Group Long Term Disability Insurance and
Group Accidental Death and Dismemberment Insurance.

“Limited Benefit Plans” means all the Company’s employee benefit plans and arrangements in
effect at any time and in which the executives and key management employees of the Company
are eligible to participate, excluding the Continuing Benefit Plans, but including, without
limitation, the following employee benefit plans and arrangements as in effect on the date
of this Agreement or any successor or new plan or arrangement made available in the future
to the executives and key management employees of the Company and in which Executive is
eligible to participate before the Termination Date:

	 	(a)	 	The 401(k) Plan;
	 
	 	(b)	 	The RPM International Inc. Retirement Plan;
	 
	 	(c)	 	Stock option plans and other equity-based incentive plans,
including the RPM International Inc. 2007 Stock Option Plan, the Restricted
Stock Plan and the Omnibus Plan;
	 
	 	(d)	 	Any Executive Life Insurance;
	 
	 	(e)	 	The RPM International Inc. Incentive Compensation Plan;
	 
	 	(f)	 	The Deferred Compensation Plan;
	 
	 	(g)	 	The RPM International Inc. Employee Stock Purchase Plan;
	 
	 	(h)	 	The Life and Disability Welfare Plan;
	 
	 	(i)	 	The RPM International Inc. Group Variable Universal Life Plan
(also known as GRIP or GVUL);
	 
	 	(j)	 	The RPM International Inc. Business Travel Accident Plan;
	 
	 	(k)	 	The fringe benefits appertaining to Executive’s position with
the Company referred to in Subsection 4(f), including the use of an automobile;
and

A-5

 

	 	(l)	 	RPM International Inc. Flexible Benefits Plan.

“Lump-Sum Payment” means, collectively, the lump-sum payments that may be payable to
Executive pursuant to the first sentence of Subsection 6(b)(iii) and pursuant to Subsection
6(c)(ii)(B).

“Notice of Termination for Good Reason” means a written notice delivered by Executive in
good faith to the Company under Subsection 6(a)(vi) setting forth in reasonable detail the
facts and circumstances that have occurred and that Executive claims in good faith to be an
event constituting Good Reason.

“Omnibus Plan” means the RPM International Inc. 2004 Omnibus Equity and Incentive Plan.

“Protected Period” means that period of time commencing on the date of a Change in
Control and ending two years after such date.

“Release and Waiver of Claims” means a written release and waiver by Executive, to the
fullest extent allowable under applicable law and in form reasonably acceptable to the
Company, of all claims, demands, suits, actions, causes of action, damages and rights
against the Company and its Affiliates whatsoever which he may have had on account of his
Termination of Employment, including, without limitation, claims of discrimination,
including on the basis of sex, race, age, national origin, religion, or handicapped status,
and any and all claims, demands and causes of action for severance or other termination pay.
Such Release and Waiver of Claims shall not, however, apply to the obligations of the
Company arising under this Agreement, any indemnification agreement between Executive and
the Company, any retirement plans, any stock option agreements, COBRA Continuation Coverage
or rights of indemnification Executive may have under the Company’s Certificate of
Incorporation or By-laws (or comparable charter document) or by statute.

“Restricted Stock Plan” means either the RPM International Inc. 1997 Restricted Stock
Plan or the RPM International Inc. 2007 Restricted Stock Plan and any successor plan or
arrangement to either of such plans, but shall not be deemed to mean or include the Omnibus
Plan.

“Subsidiary” means a corporation, company or other entity (a) more than 50 percent of whose
outstanding shares or securities (representing the right to vote for the election of
directors or other managing authority) are, or (b) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or unincorporated
association), but more than 50 percent of whose ownership interest representing the right
generally to make decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company.

“Termination of Employment” means the separation from service within the meaning of Section
409A of the Code, of Executive with the Company and all of its Affiliates, for any reason,
including without limitation, quit, discharge, or retirement, or a leave of

A-6

 

absence (including military leave, sick leave, or other bona fide leave of absence such as
temporary employment by the government if the period of such leave exceeds the greater of
six months, or the period for which Executive’s right to reemployment is provided either by
statute or by contract) or permanent decrease in service to a level that is no more than
Twenty Percent (20%) of its prior level. For this purpose, whether a Termination of
Employment has occurred is determined based on whether it is reasonably anticipated that no
further services will be performed by Executive after a certain date or that the level of
bona fide services Executive will perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than Twenty Percent (20%) of
the average level of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the full period of services
if Executive has been providing services less than 36 months). The terms “Terminate” or
“Terminated,” when used in reference to Executive’s employment or the Employment Period,
shall refer to a Termination of Employment as set forth in this paragraph.

“Termination Date” means the effective date of Executive’s Termination of Employment.

“Unpaid Incentive Compensation” means an amount equal to the amount of any Incentive
Compensation payable but not yet paid for the fiscal year preceding the fiscal year in which
the Termination Date occurs. If the Compensation Committee has determined such amount prior
to the Termination Date, then such amount shall be the amount so determined by the
Compensation Committee. If the Compensation Committee has not determined such amount prior
to the Termination Date, then such amount shall equal the amount of the Annual Incentive
Compensation for the most recent fiscal year preceding the fiscal year in which the
Termination Date occurs for which Incentive Compensation has been paid. For purposes of
this definition, any Incentive Compensation deferred by Executive pursuant to any qualified
or non-qualified compensation reduction arrangement maintained by the Company, including,
without limitation, the Deferred Compensation Plan, shall be deemed to have been paid on the
date of deferral.

“Voting Power” means, at any time, the total votes relating to the then-outstanding
securities entitled to vote generally in the election of Directors.

“Voting Stock” means, at any time, the then-outstanding securities entitled to vote
generally in the election of Directors.

A-7

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