RPM INTERNATIONAL INC. 2005 DEFERRED COMPENSATION PLAN

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

RPM INTERNATIONAL INC.
2005 DEFERRED COMPENSATION PLAN
(Generally Effective January 1, 2005)

ARTICLE 1
INTRODUCTION

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

     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.

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

ARTICLE 2
DEFINITIONS AND CONSTRUCTION

     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.

          (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,

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.

          (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).

          (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).

          (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.

ARTICLE 3
PARTICIPATION AND ELIGIBILITY

     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.

          (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.

ARTICLE 4
CONTRIBUTIONS AND VESTING

          (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:

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.

          (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.

     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.

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

      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.

     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

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.

     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.

ARTICLE 5
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.

     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 Accou