Document:

EX-10.7

Exhibit 10.7

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     This Amended and
Restated Employment Agreement (this “Agreement”) dated effective as of the ___ day of                , 20___, between RPM International Inc., a
Delaware corporation (the “Company”), and
                    
(“Executive”).

     WHEREAS, Executive is currently [Title] of the Company; and

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

     WHEREAS, the Board of Directors of the Company recognizes the importance of Executive’s
continuing contribution to the future growth and success of the Company and desires to assure the
Company and its stockholders of Executive’s continued employment in an executive capacity and to
compensate him therefor; and

     WHEREAS, Executive is desirous of committing himself to continue to serve the Company on the
terms herein provided.

     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, 20___ (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                      reporting to the Chief
Executive Officer of the Company. Executive shall be responsible for all                      matters of the
Company and shall have such other powers and duties as may from time to time be assigned by the
Chief Executive Officer or 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
                    , and shall not be required to perform services which would make the continuance
of his principal residence in                     , 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                                          Dollars ($                    ) 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 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

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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 Chief Executive
Officer 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-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

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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) 200% 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.

     (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

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Subsection 5(c) following a Termination of the Employment Period under any other provision hereof.

          (i) Continuing Benefit Plans. For a period of two 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 two-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 two-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.

          (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:

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               (A) A lump sum payment equal to two 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 two 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 two 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 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.

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     (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 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

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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 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

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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.

     (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

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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 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.

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     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
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

11

 

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 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

12

 

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.

     (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

13

 

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.

     (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

14

 

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:

                                        

                                        

                                        

If to the 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.

15

 

     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
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.

16

 

     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 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

17

 

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]

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

	 	 	 	 	 
	 	RPM INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Frank C. Sullivan, Chairman and 	 
	 	 	Chief Executive Officer 	 
	 
	 	The “Company”

 	 
	 	
 	 
	 	“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
l3d-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

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	 	(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-7EX-10.1

TABLE OF CONTENTS

									
	RETIREMENT AGREEMENT AND RELEASE OF ALL CLAIMS

Table of Contents

Exhibit 10.1

RETIREMENT AGREEMENT AND RELEASE OF ALL CLAIMS

     This Retirement Agreement and Release of All Claims (“Agreement”) is made between Sparton
Corporation (“Company”) and Richard Langley (“Executive”) as follows:

     1. Retirement from Employment. Pursuant to Section 6(b) of the Executive’s November
22, 2008 Employment Agreement (the “Employment Agreement”), the Company has notified Executive of
its intent to terminate the term of the Employment Agreement Without Cause effective April 1, 2009.
Accordingly, the parties have mutually agreed that Executive shall retire effective April 1, 2009
(the “Retirement Date”). As of the Retirement Date, Executive resigns from all officer, director
or committee positions with the Company and its subsidiaries. Except as set forth in this
Agreement and for Executive’s vested rights, if any, under applicable retirement plans, all
compensation and benefits from the Company shall terminate on the Retirement Date.

     2. Severance. As provided in the Employment Agreement, Company shall pay Executive
the unpaid portions of his salary, less payroll deductions required by law, through the term of the
Employment Agreement as if Executive had not been terminated. The severance shall be paid
according to the Company’s normal payroll practices, shall commence on the next regular pay period
after the expiration of the revocation period described in Section 8(c), and shall be paid in equal
installments on the Company’s regular pay periods through the term of the Employment Agreement.

     3. Paid Time Off. Executive shall be paid for 50.25 days (402 hours) of accrued,
unused paid time off in the amount of $51,216.35, less payroll taxes required by law. The
severance shall be paid according to the Company’s normal payroll practices, shall commence on the
next regular pay period after the expiration of the revocation period described in Section 8(c),
and shall be paid in equal installments on the Company’s regular pay periods through the term of
the Employment Agreement.

     4. Consulting Services. Executive agrees to provide consulting services (without
additional charge) to the Company, as reasonably requested by the Company, with respect to matters
of which Executive may have knowledge due to Executive’s employment, including but not limited to
any transition of Executive’s work responsibilities. The parties agree that the amount of such
consulting services and the cooperation in litigation described below shall not exceed 1,000 hours
per year. The Company agrees to pay the reasonable and necessary expenses that Executive incurs in
providing such consulting services.

     5. Cooperation in Litigation. Executive also agrees to cooperate fully with Employer
in its defense of or other participation in any administrative, judicial, arbitral, investigative
or other proceeding arising from any charge, complaint or other action that has been or may be
filed, or with respect to which the Company may be or become involved, relating to any matter that
occurred during Executive’s employment with the Company.

     6. Mutual Release of All Claims. Executive, for himself and any person or
representative claiming through him, releases and forever discharges the Company, its parent
company, subsidiaries, and affiliated organizations, successors and assigns and its/their past and

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Table of Contents

present directors, officers, Executives, agents, attorneys, benefit plans and plan
administrators, sureties and insurers (collectively “Releasees”) from all claims, liabilities,
demands, costs, attorney fees, causes of action and damages, including all consequential and
incidental damages, whether known or unknown, arising from the beginning of time to the date of
this Agreement, including without limitation those relating directly or indirectly to Executive’s
employment with the Company and all claims for personal injury, defamation, breach of contract,
wrongful discharge, violation of due process or civil rights and violation of any federal, state or
local statute, law or ordinance and the common law, including without limitation violation of the
Age Discrimination in Employment Act, and/or any federal, state or local law regarding
discrimination. Executive further waives any right to monetary recovery should any administrative
or governmental agency or any other person or entity pursue any claims on Executive’s behalf.
Notwithstanding this Agreement, Company acknowledges that Executive is not releasing any claims
concerning the performance of this Agreement, retirement and pension benefits, if any, which
Executive is qualified and vested to receive, and benefits under COBRA if Executive so elects.
Company further acknowledges that Executive is not releasing his rights of indemnification, if any,
under the Company’s by-laws and/or directors and officers liability insurance under the terms of
such by-laws and insurance.

     It is understood and agreed that except for the exceptions set forth in this Agreement, this
is a full and final release in complete settlement of all claims and rights of every nature and
kind whatsoever which Executive has or may have against the Company and other Releasees.

     Except as otherwise provided in this Agreement and for obligations set forth in this
Agreement, the Company releases and forever discharges the Executive, his personal representatives,
executors, heirs and assigns from and against any and all claims, liabilities, demands, costs,
attorney fees, causes of action and damages, including all consequential and incidental damages,
whether known or unknown, arising from the beginning of time to the date of this Agreement.
Notwithstanding this Agreement, the Executive acknowledges that the Company is not releasing the
Executive from any action (i) where he knowingly acted in bad faith, or to personally profit at the
Company’s expense, and in a manner that was not in the best interests of the Company or (ii) if
Executive had reasonable cause to believe that his conduct was unlawful.

     7. Post-Termination Obligations. Executive agrees that the confidentiality,
non-competition and non-solicitation provisions of the Employment Agreement shall survive and shall
be complied with by Executive.

     8. Representations and Acknowledgments.

     a. Executive has been given a period of at least twenty-one (21) days in which to consider
this Agreement. If executed prior to the end of such twenty-one (21) day period, Executive
acknowledges that Executive voluntarily waives the balance of such period.

     b. Executive has been advised by Company to consult with an attorney.

     c. This Agreement shall not be effective or enforceable for a period of seven (7) days
following the date of Executive’s signature below, during which time only, Executive may

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Table of Contents

revoke the Agreement. Any such revocation must be in writing, signed by Executive and
delivered or mailed so as to arrive within such seven (7) days to Christopher P. Mazzoli at Bodman
LLP, 201 W. Big Beaver Road, Suite 500, Troy, MI 48084.

     d. Executive has returned all Company’s property to Company.

     e. Executive has not assigned any rights being released under this Agreement.

     9. Miscellaneous.

     a. This three (3) page Agreement constitutes the entire agreement between Executive and the
Company with respect to the subject matter hereof and supersedes any prior or contemporaneous
promises, agreements or representations between them as to such subject matter, except as otherwise
set forth in this Agreement. This Agreement cannot be modified orally but only in a written
document signed by Executive and an authorized representative of the Company. This Agreement shall
be governed by the laws of the State of Michigan.

     b. If any provision of this Agreement, in whole or in part, is determined to be unlawful or
unenforceable, the parties agree that such provision shall be deemed modified, if possible, to the
extent necessary to render such provision valid and enforceable to the maximum extent permitted by
law and, if not possible, it shall be severed from the Agreement. In either event all remaining
provisions of this Agreement shall remain in full force and effect.

     c. The captions and headings of the Sections of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement. This Agreement
accurately sets forth the intent and understanding of each party. This Agreement shall not be
construed for or against either party as a result of the drafting hereof if there is any dispute
over the meaning or intent of any of its provisions.

     d. A facsimile or photocopy of this Agreement is effective as an original.

     Signed below on the date set forth below.

READ BEFORE SIGNING

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Company	 	Executive	 	 
	 
	 	 	 	 	 	 	 	 
	Sparton Corporation	 	Richard Langley	 	 
	 
	 	 	 	 	 	 	 	 
	By: 
	/s/ Cary Wood	 	By: 	/s/ Richard Langley	 	 
	 
	 	 	 	 	 	 
	Name: Cary Wood	 	 	 	 	 	 
	Title: Chief Executive Officer	 	 	 	 	 	 

3

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