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<SEC-DOCUMENT>0000950152-01-504169.txt : 20010830
<SEC-HEADER>0000950152-01-504169.hdr.sgml : 20010830
ACCESSION NUMBER:		0000950152-01-504169
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		12
CONFORMED PERIOD OF REPORT:	20010531
FILED AS OF DATE:		20010829

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RPM INC/OH/
		CENTRAL INDEX KEY:			0000110621
		STANDARD INDUSTRIAL CLASSIFICATION:	PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851]
		IRS NUMBER:				346550857
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0531

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14187
		FILM NUMBER:		1726374

	BUSINESS ADDRESS:	
		STREET 1:		2628 PEARL RD
		STREET 2:		P O BOX 777
		CITY:			MEDINA
		STATE:			OH
		ZIP:			44258
		BUSINESS PHONE:		3302735090

	MAIL ADDRESS:	
		STREET 1:		2628 PEARL RD
		STREET 2:		P O BOX 777
		CITY:			MEDINA
		STATE:			OH
		ZIP:			44258

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	REPUBLIC POWDERED METALS INC
		DATE OF NAME CHANGE:	19711027
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>l89965ae10-k.txt
<DESCRIPTION>RPM, INC.                             FORM 10-K
<TEXT>
<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                    FORM 10-K

[X]    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
       Act of 1934 (No Fee Required)

For the fiscal year ended May 31, 2001

                                       OR

[ ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934 (No Fee Required)

For the transition period from __________ to ___________

                           Commission File No. 1-14187

                                    RPM, INC.
             (Exact Name of Registrant as Specified in its Charter)

                  Ohio                                 34-6550857
- --------------------------------         --------------------------------------
(State or Other Jurisdiction of          (IRS Employer Identification No.)
Incorporation or Organization)

P.O. Box 777, 2628 Pearl Road, Medina, Ohio               44258
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)                  (Zip Code)

Registrant's telephone number, including area code: (330) 273-5090

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class                       Name of Exchange on Which Registered
- -------------------                       ------------------------------------
Common Shares, Without Par Value          New York Stock Exchange
Rights to Purchase Common Shares          New York Stock Exchange


Securities registered pursuant to Section 12(g) of the Act:

                                      None

                  Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject
to the filing requirements for the past 90 days. Yes  X   No ___
                                                     ---


<PAGE>   2


                  Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

                  As of August 17, 2001, 102,210,877 Common Shares were
outstanding, and the aggregate market value of the Common Shares of the
Registrant held by non-affiliates (based upon the closing price of the Common
Shares as reported on the New York Stock Exchange on August 17, 2001) was
approximately $1,034,715,900. For purposes of this information, the 2,052,641
outstanding Common Shares which were owned beneficially as of May 31, 2001 by
executive officers and Directors of the Registrant were deemed to be the Common
Shares held by affiliates.

                       Documents Incorporated by Reference

                  Portions of the following documents are incorporated by
reference to Parts II, III and IV of this Annual Report on Form 10-K: (i)
definitive Proxy Statement to be used in connection with the Registrant's Annual
Meeting of Shareholders to be held on October 12, 2001 (the "2001 Proxy
Statement") and (ii) the Registrant's 2001 Annual Report to Shareholders for the
fiscal year ended May 31, 2001 (the "2001 Annual Report to Shareholders").

                  Except as otherwise stated, the information contained in this
Annual Report on Form 10-K is as of May 31, 2001.





                                       2
<PAGE>   3


                                     PART I

ITEM 1.           BUSINESS.

                                   THE COMPANY

                  RPM, Inc. ("RPM" or the "Company") was organized in 1947 as an
Ohio corporation under the name Republic Powdered Metals, Inc. On November 9,
1971, the Company's name was changed to RPM, Inc. As used herein, the terms
"RPM" and the "Company" refer to RPM, Inc. and its subsidiaries, unless the
context indicates otherwise. The Company has its principal executive offices at
2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258, and its telephone number is
(330) 273-5090.



                                    BUSINESS

                  RPM manufactures and markets protective coatings for use in
both industrial and consumer applications. As of May 31, 2001, RPM markets its
products in approximately 130 countries and operates manufacturing facilities in
62 locations in the United States, Argentina, Belgium, Brazil, Canada, China,
Colombia, Germany, Italy, Malaysia, Mexico, New Zealand, The Netherlands,
Poland, South Africa, the United Arab Emirates and the United Kingdom.

OPERATING SEGMENT INFORMATION

                  The Company is organized into two operating segments according
to the primary markets served by RPM: the Industrial Division and the Consumer
Division. Reference is made to "Reportable Segment and Geographic Area
Information" on pages 6 through 7 of the Annual Report to Shareholders, which is
incorporated herein by reference, for financial information relating to
operating segments.

INDUSTRIAL PRODUCTS

                  RPM's operating companies in its Industrial Division
manufacture and market coatings for various industrial and commercial
applications including waterproofing, general maintenance, flooring systems and
coatings, corrosion control, and other specialty chemical applications. RPM's
industrial products represented approximately 55% of the Company's sales for the
fiscal year ended May 31, 2001.

                  Industrial products designed for waterproofing applications
include sealants, deck coatings, membranes and water-based coatings for
commercial and industrial maintenance marketed under the Company's Tremco,
Vulkem and DYmeric brands. Industrial products used for general commercial and
industrial maintenance include roofing products, such as asphaltic aluminum roof
deck coating produced by RPM's original business unit, Republic Powdered Metals,
Geoflex and Hy-Shield premium single-ply roofing materials and Tremco roofing
systems, as well as the Euco line of concrete and masonry additives, coatings
and repair products.


                                       3
<PAGE>   4

                  Several of the Company's Industrial product lines are sold to
similar specifying customers. These include high-performance polymer floors,
linings and wall systems produced by Stonhard, molded and pultruded fiberglass
reinforced plastic grating products manufactured under the brand names of
Chemgrate and Fibergrate, and a broad-line of high-performance corrosion control
coatings being marketed primarily under the Carboline and Plasite brands.
Carboline manufactures high-performance corrosion-resistant protective coatings,
fireproofing, tank linings and floor coatings, and markets these products to
industrial, architectural and applicator companies throughout the world.

                  The Company's remaining industrial product lines are highly
specialized and include Dryvit coatings and adhesives for exterior insulating
finishing systems and TCI powder coatings for exterior and interior
applications. Products manufactured for specialty chemical applications include:
Day-Glo Color and Radiant Color fluorescent colorants and pigments; Kop-Coat
manufactured compounds and wood treatment products including Wolman industrial
lumber treatments; pleasure marine coatings marketed under the Pettit, Woolsey
and Z-Spar brand names; American Emulsions dye additives for textile dyeing and
finishing; and Chemspec commercial carpet cleaning solutions.

CONSUMER PRODUCTS

                  For consumer applications, RPM manufactures professional and
do-it-yourself products for home maintenance, automotive repair, marine
applications and hobby and leisure items. RPM's consumer products are marketed
through thousands of mass merchandise, home center and hardware stores
throughout North America. RPM's consumer products represented approximately 45%
of the Company's sales for the fiscal year ended May 31, 2001.

                  Rust-Oleum manufactures high quality corrosion-resistant,
general purpose, decorative coatings and assorted specialty products for the
household maintenance and light industrial markets. In addition to Rust-Oleum's
original rust preventative coatings, Rust-Oleum markets a full line of
small-package general purpose coatings under the "Painter's Touch by Rust-Oleum"
brand name as well as "American Accents by Rust-Oleum" decorative coatings.
Effective June 1, 2001, Rust-Oleum also markets Flecto's interior stains and
finishes under the Varathane and Watco labels.

                  Zinsser manufactures a broad line of specialty primers and
sealants marketed under the B-I-N, Bulls Eye 1-2-3 and Cover Stain brand names,
as well as wallcovering removal and preparation coatings under the principal
brands of DIF, Paper Tiger and Shieldz. Zinsser is also a leader in mildew
removal and resistance. Mantrose-Haeuser is the nation's leading producer of
shellac items used as pharmaceutical glazes, confectioner's glazes, citrus fruit
coatings and wood coatings. Wolman is well known for its deck coatings, sealants
and brighteners and Richard E. Thibaut designs and distributes a line of
higher-end wallcoverings.

                  DAP markets a nationwide line of household patch and repair
products, including latex and silicone caulks and sealants, spackling compounds,
putty, glazing compounds, textured ceiling paints, adhesives, basement
waterproofing products, wood repair products and other specialized materials for
the home improvement market. In addition to the DAP brand, DAP also markets the
Alex Plus, Kwik Seal, Weldwood, Woodlife and Plastic Wood brands.


                                       4
<PAGE>   5

                  Mohawk, Star, Chemical Coatings, Guardian Products and
Westfield Coatings produce furniture finishes and repair and restoration
coatings.

                  The Company manufactures a variety of auto body paints and
repair products for the automotive aftermarket under the Bondo brand name,
including spray paints, body fillers, vinyl colors and bumper repair products.

                  In addition, the Company manufactures products for the hobby
and leisure markets including Testor's model kits and accessory products, Aztek
brand model kits and airbrushes and Floquil/Polly S Color hobby, art and craft
coatings.

FOREIGN OPERATIONS

                  The Company's foreign manufacturing operations for the fiscal
year ended May 31, 2001 accounted for approximately 20% of its total sales
(which does not include exports directly from the United States), although it
also receives license fees and royalty income from numerous license agreements
and also has joint ventures accounted for under the equity method in various
foreign countries. The Company has manufacturing facilities in Argentina,
Belgium, Brazil, Canada, China, Colombia, Germany, Italy, Malaysia, Mexico, New
Zealand, The Netherlands, Poland, South Africa, the United Arab Emirates and the
United Kingdom, and sales offices or public warehouse facilities in Australia,
Canada, Finland, France, Germany, Hong Kong, Iberia, Mexico, the Philippines,
Singapore, Sweden the United Kingdom and several other countries. Information
concerning the Company's foreign operations is set forth in Management's
Discussion and Analysis of Results of Operations and Financial Condition, which
appears elsewhere in this Annual Report on Form 10-K.

COMPETITION

                  The Company is engaged in a highly competitive industry and,
with respect to all of its major products, faces competition from local and
national firms. Several of the companies with which RPM competes have greater
financial resources and sales organizations than the Company. While no accurate
figures are available with respect to the size of or the Company's position in
the market for any particular product, management believes that the Company is a
major producer of aluminum coatings, cement-based paint, hobby paints, pleasure
marine coatings, furniture finishing repair products, automotive repair
products, industrial corrosion control products, consumer rust-preventative
coatings, polymer flooring, fluorescent coatings and pigments, exterior
insulation finish systems, molded and pultruded fiberglass reinforced plastic
grating and shellac-based coatings. However, the Company does not believe that
it has a significant share of the total protective coatings market.

INTELLECTUAL PROPERTY

                  The intellectual property portfolios of the subsidiaries of
the Company include numerous valuable patents, trade secrets and know-how,
domain names, trademarks and trade names. Significant research and technology
development continues to be conducted by the subsidiaries. However, no single
patent, trademark, name or license, or group of these rights, other than the
marks Day-Glo(R), Rust-Oleum(R), Carboline(R), DAP(R) and Tremco(R), are
material to the Company's business.


                                       5
<PAGE>   6

                  Day-Glo Color Corp., a subsidiary of the Company, is the owner
of over 50 trademark registrations of the mark and name "DAY-GLO(R)" in numerous
countries and the United States for a variety of fluorescent products. There are
also many other foreign and domestic registrations for other trademarks of the
Day-Glo Color Corp., for a total of over 100 registrations. These registrations
are valid for a variety of terms ranging from one year to 20 years, which terms
are renewable as long as the marks continue to be used. Renewal of these
registrations is done on a regular basis.

                  Rust-Oleum Corporation, a subsidiary of the Company, is the
owner of over 50 United States trademark registrations for the mark and name
"RUST-OLEUM(R)" and other trademarks covering a variety of rust-preventative
coatings sold by Rust-Oleum Corporation. There are also many foreign
registrations for "RUST-OLEUM(R)" and the other trademarks of Rust-Oleum
Corporation, for a total of nearly 400 registrations. These registrations are
valid for a variety of terms ranging from one year to 20 years, which terms are
renewable for as long as the marks continue to be used. Renewal of these
registrations is done on a regular basis.

                  Carboline Company, a subsidiary of the Company, is the owner
of a United States trademark registration for the mark and name "CARBOLINE(R)."
Carboline Company is also the owner of several other United States registrations
for other trademarks. Renewal of these registrations is done on a regular basis.

                  DAP Products Inc., a subsidiary of the Company, is the owner
of over 150 United States and foreign trademark applications and registrations
which include the mark and name "DAP(R)." DAP Products Inc. is also the owner of
several other United States and foreign registrations for other trademarks
including "PUTTY KNIFE(R)." Renewal of these registrations is done on a regular
basis.

                  Tremco Incorporated, a subsidiary of the Company, is the owner
of over 100 registrations for the mark and name "TREMCO(R)" in numerous
countries and the United States for a variety of sealants and coating products.
There are also many other foreign and domestic registrations for other
trademarks of Tremco Incorporated, for a total of over 600 registrations and
applications. The registrations are valid for a variety of terms ranging from
one year to 20 years, which terms are renewable as long as the marks continue to
be used. Renewal of these registrations is done on a regular basis.

                  The Company's other valuable product trademarks also include:
ALUMANATION(R), AVALON(R), B-I-N(R), BITUMASTIC(R), BONDO(R), BONDEX(R), BULLS
EYE(R), CHEMGRATE(R), DRYVIT(R), DYMERIC(R), DYNALITE(R), DYNATRON(R), EASY
FINISH(R), FLECTO(R), EPOXSTEEL(R), FIBERGRATE(R), FLOQUIL(R), GEOFLEX(R),
LUBRASPIN(TM), MAR-HYDE(R), MOHAWK and DESIGN(R), OUTSULATION(R), PARASEAL(R),
PERMAROOF(R), PETTIT(TM), PLASITE(R), SANITILE(R), STONCLAD(R), STONHARD(R),
STONLUX(R), TALSOL(R), TCI(TM), TESTORS(R), ULTRALITE(TM), VARATHANE(R),
VULKEM(R), WOOLSEY(R), ZINSSER(R) and Z-SPAR(R); and, in Europe, NULLIFIRE(R),
RADGLO(R) and MARTIN MATHYS(R).


                                       6
<PAGE>   7

RAW MATERIALS

                  The Company does not have any single source suppliers of raw
materials that are material to its business, and the Company believes that
alternate sources of supply of raw materials are available to the Company for
most of its raw materials. Where shortages of raw materials have occurred, the
Company has been able to reformulate products to use more readily available raw
materials. Although the Company has been able to reformulate products to use
more readily available raw materials in the past, there can be no assurance as
to the Company's ability to do so in the future.

SEASONAL FACTORS

                  The Company's business is seasonal due to outside weather
factors. The Company historically experiences strong sales and income in its
first, second and fourth fiscal quarters comprised of the three month periods
ending August 31, November 30 and May 31, respectively, with weaker performance
in its third fiscal quarter (December through February).

CUSTOMERS

                  Seven large Consumer Division accounts, such as do-it-yourself
home centers, represent approximately 17% of the Company's total sales. Except
for sales to these customers, the Company's business is not dependent upon any
one customer or small group of customers but is rather dispersed over a
substantial number of customers.

BACKLOG

                  The Company historically has not had a significant backlog of
orders, nor was there a significant backlog during the last fiscal year.

RESEARCH

                  The Company's research and development work is performed in
various laboratory locations throughout the United States. During fiscal years
2001, 2000 and 1999, the Company invested approximately $21.8 million, $22.3
million and $18.0 million, respectively, on research and development activities.
The customer sponsored portion of such expenditures was not significant.

ENVIRONMENTAL MATTERS

                  Several of the Company's subsidiaries are involved in various
environmental claims or proceedings relating to facilities currently or
previously owned, operated or used by such subsidiaries, or their predecessors.
In addition, the Company or its subsidiaries, together with other parties, have
been designated as potentially responsible parties ("PRPs") under federal and
state environmental laws for the remediation of hazardous waste at certain
disposal sites.

                  The Company's environmental-related accruals are established
and/or adjusted as information becomes available upon which more accurate costs
can be reasonably estimated. Actual costs may vary from these estimates due to
the inherent uncertainties involved. In


                                       7
<PAGE>   8

management's opinion, based upon information presently available, the outcome of
these environmental matters will not have a material adverse effect on the
Company's financial position, results of operations or liquidity.

EMPLOYEES

                  As of May 31, 2001, the Company employed 7,928 persons, of
whom 692 were represented by unions under contracts which expire at varying
times in the future. The Company believes that its relations with its employees
are good.

ITEM 2.           PROPERTIES.

                  The Company's corporate headquarters and a plant and offices
for one subsidiary are located on an 119-acre site in Medina, Ohio, which is
owned by the Company. As of May 31, 2001, the Company's operations occupy a
total of approximately 6.8 million square feet, with the majority, approximately
5.6 million square feet, devoted to manufacturing, assembly and storage. Of the
approximately 6.8 million square feet occupied, 5.4 million square feet are
owned and 1.4 million square feet are occupied under operating leases. In
addition, approximately 0.6 million owned square feet is associated with
property intended to be sold or sublet in conjunction with the Company's
restructuring program.

                  For information concerning the Company's rental obligations,
see Note E (Leases) of Notes to Consolidated Financial Statements, which appear
elsewhere in this Annual Report on Form 10-K. Under all of its leases, the
Company is obligated to pay certain varying insurance costs, utilities, real
property taxes and other costs and expenses.

                  The Company believes that its manufacturing plants and office
facilities are well maintained and suitable for the operations of the Company.


ITEM 3.           LEGAL PROCEEDINGS.

                  EIFS Litigation.
                  ----------------

                  As previously reported, Dryvit Systems, Inc., a wholly-owned
subsidiary of the Company ("Dryvit"), is a defendant or co-defendant in numerous
lawsuits seeking damages for structures clad with exterior insulated finish
systems ("EIFS") products manufactured by Dryvit and other EIFS manufacturers.
As of May 31, 2001, Dryvit was a defendant or co-defendant in approximately 750
single family residential EIFS cases, the vast majority of which are pending in
North Carolina, South Carolina and Alabama. Dryvit is also defending EIFS
lawsuits involving office buildings or other commercial structures. The vast
majority of Dryvit's EIFS lawsuits involve claims of water intrusion into
structures and related property damages; however, in some EIFS lawsuits there
are personal injury allegations based on alleged exposure to mold. Dryvit is
vigorously defending these mold allegations and does not believe there is
adequate scientific, medical or legal support to sustain a personal injury claim
against Dryvit.

                  As previously reported, Dryvit settled the North Carolina
class action styled Ruff, et al. v. Parex, Inc., et al. As of May 31, 2001, a
total of 502 claims had been submitted to the claims administrator for
verification and validation. Of these 502 claims, 199 were actually paid


                                       8
<PAGE>   9

through May 31, 2001 in the amount of $3,083,240. The remaining claims are at
various stages of investigation, review and validation by the claims
administrator. Dryvit continues to believe that it has adequate insurance
commitments in place to cover its obligations under the Ruff settlement.

                  As previously reported, Dryvit was named in an attempted class
action filed in the U.S. District Court for the Eastern District of North
Carolina (5:99-CV-4700-BR(3)), styled Lienhart, et al. v. Dryvit Systems, Inc.,
et al., involving an EIFS-type product known as Fastrak System 4000. On December
18, 2000, the U.S. District Court certified a class of "homes, condominiums,
apartment complexes or commercial buildings which have been constructed after
January 1, 1992, using an exterior cladding system knows as Fastrak System
4000." On June 26, 2001, the 4th Circuit U.S. Court of Appeals vacated the
District Court's class certification order ruling that certification was not
appropriate because it is likely that individual issues necessary to adjudicate
Dryvit's liability will predominate over class issues. The Court of Appeals has
remanded the Lienhart case to the District Court for further proceedings.

                  As previously reported, on or about December 1, 2000, Dryvit
was named along with other defendants in a state class action filed in Jefferson
County, Tennessee styled William J. Humphrey, et al. v. Dryvit Systems, Inc.
(Case No. 17,715-IV) ("Humphrey"). The Humphrey case is an attempted state-wide
class action which seeks various types of damages on behalf of all similarly
situated persons who paid for the purchase of a Dryvit EIFS-clad structure in
the State of Tennessee during the period beginning November 14, 1990 to the date
of the Complaint.

                  As previously reported, on May 30, 2000, Dryvit was named
along with other third party defendants in a state class action filed in Madison
County, Illinois styled Osborne, et al. v. Dryvit Systems, Inc. (Case No.
00L000395) ("Osborne"). The Osborne case is an attempted state-wide class action
which seeks various types of damages on behalf of a class of all persons who
owned a Dryvit EIFS-clad home located in the State of Illinois during the period
January 1, 1990 to the date of the complaint.

                  As previously reported, on or about March 22, 2001, Dryvit was
named along with other defendants in a state class action Complaint filed in
Mobile County, Alabama styled Tony Bryan, et al. v. Dryvit Systems, Inc. (Case
No. CV-01-000761 JSJ) ("Bryan"). The Bryan case is an attempted state-wide class
action which seeks various types of damages on behalf of all "Persons who own a
single residence in the State of Alabama on which an Exterior Insulation and
Finish system ("EIF system") has been installed or any previous owner of such
residence who incurred any costs or expenses to inspect, repair or replace the
EIF system at any time from November 14, 1990 until the date the Defendants'
continuing conduct is terminated."

                  Dryvit, the Company's captive insurer, First Colonial
Insurance Company, and other third party insurers are parties to a cost-sharing
arrangement which is currently funding Dryvit's defense and settlement costs.
Dryvit believes that the damages sought by the plaintiffs in these EIFS cases
are substantially covered by insurance and that such insurance is presently
adequate. Based on the continuation of Dryvit's current insurance arrangements,
the Company continues to believe that the EIFS litigation will not have a
material adverse effect on the Company's consolidated financial position or
results of operations.


                                       9
<PAGE>   10

                  Asbestos Litigation
                  -------------------

                  As previously reported, the Company, certain of its
wholly-owned subsidiaries, including Bondex International, Inc. ("Bondex") and
Republic Powdered Metals, Inc. ("Republic"), are defendants or co-defendants
("Defendants") in asbestos-related bodily injury lawsuits filed on behalf of
various individuals in various jurisdictions. These cases generally seek damages
for asbestos-related diseases based on alleged exposures to asbestos-containing
products previously manufactured by the Defendants. In many cases, the
plaintiffs are unable to demonstrate that any injuries they have incurred, in
fact, resulted from exposure to Defendants' products. Defendants are generally
dismissed from those cases. With respect to those cases where compensable
disease, exposure and causation are established, Defendants generally settle
for various amounts based on the seriousness of the case, the particular
jurisdiction and the number and solvency of co-defendants in a given case.

                  As of May 31, 2001, Defendants had a total of 1,153 active
asbestos cases compared to 636 as of May 31, 2000. Between May 31, 2000 and May
31, 2001, Defendants secured dismissals and/or settlements of 85 cases, the
total cost of which collectively to Defendants, net of insurer payments and
excluding defense costs, amounted to $851,183, compared to $586,000 for 110
cases for fiscal year 2000. This increase in the number of claims filed and the
average cost of resolving such claims is due, in part,to the bankruptcy filings
of various other asbestos litigation defendants.

                  Defendants continue to vigorously defend all asbestos-related
lawsuits. Under a cost-sharing agreement among the Defendants and their
insurers, the insurers are responsible for payment of substantially all of the
indemnity and defense costs with the Defendants each responsible for the
balance. The Company continues to believe that resolution of its current
asbestos cases will not have a material adverse effect on the Company's
consolidated financial position or results of operations.

                  In addition to the foregoing legal proceedings, various of the
Company's subsidiaries are, from time to time, parties to legal proceedings
associated with their businesses and operations. It is not possible to predict
the outcome of these proceedings, but management believes that these actions
will not have a material adverse effect on the Company's consolidated financial
position or results of operations.

                  Environmental Proceedings.
                  -------------------------

                  As previously reported, various of the Company's subsidiaries
are, from time to time, identified as a "potentially responsible party" under
the Comprehensive Environmental Response, Compensation and Liability Act and
similar state environmental statutes. In some cases, the Company's subsidiaries
are participating in the cost of certain clean-up efforts or other remedial
actions. However, the Company's share of such costs has not been material and
the Company believes that these environmental proceedings will not have a
material adverse effect upon the Company's consolidated financial position or
results of operations.


ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

                  Not Applicable.


                                       10
<PAGE>   11


ITEM 4A.          EXECUTIVE OFFICERS OF THE REGISTRANT*.

                  The name, age and positions of each executive officer of the
Company as of August 1, 2001 are as follows:

<TABLE>
<CAPTION>
Name                                      Age               Position and Offices with the Company
- ----                                      ---               -------------------------------------
<S>                                       <C>         <C>
Thomas C. Sullivan                        64          Chairman of the Board and Chief Executive Officer
James A. Karman                           64          Vice Chairman and Chief Financial Officer
Frank C. Sullivan                         40          President
Glenn R. Hasman                           47          Vice President - Finance and Communications
Paul G. Hoogenboom                        41          Vice President - Operations and Systems
Stephen J. Knoop                          36          Vice President - Corporate Development
Robert L. Matejka                         58          Vice President - Controller
Ronald A. Rice                            38          Vice  President - Risk  Management  and Benefits and Assistant
                                                      Secretary
Keith R. Smiley                           39          Vice President, Treasurer and Assistant Secretary
P. Kelly Tompkins                         44          Vice President, General Counsel and Secretary
</TABLE>

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

         * Included pursuant to Instruction 3 to Item 401(b) of Regulation S-K.

                  Thomas C. Sullivan has been Chairman of the Board and Chief
Executive Officer of the Company since October 1971. From June 1971 through
September 1978, Mr. Sullivan served as President and, prior thereto, as
Executive Vice President of the Company. Mr. Sullivan's employment with the
Company commenced in 1961, and he has been a Director since 1963. Mr. Sullivan
is employed as Chairman and Chief Executive Officer under an employment
agreement for a period ending December 31, 2002. Mr. Sullivan is the father of
Frank C. Sullivan, President of the Company.

                  James A. Karman was elected Vice Chairman on August 5, 1999.
From September 1978 to August 1999, he served as President and Chief Operating
Officer. From October 1982 to October 1993, Mr. Karman also was the Chief
Financial Officer of the Company. From October 1973 through September 1978, Mr.
Karman served as Executive Vice President, Secretary and Treasurer, and, prior
thereto, as Vice President-Finance and Treasurer of the Company. Mr. Karman's
employment with the Company commenced in 1963, and he has been a Director since
1963. Mr. Karman is employed as Vice Chairman under an employment agreement for
a period ending December 31, 2002.

                  Frank C. Sullivan was elected President on August 5, 1999.
From October 1995 to August 1999 he served as Executive Vice President, and was
Chief Financial Officer from October 1993 to August 1999. Mr. Sullivan served as
a Vice President from October 1991 to October 1995. Prior thereto, he served as
Director of Corporate Development of the Company from February 1989 to October
1991. Mr. Sullivan served as Regional Sales Manager, from February 1988 to
February 1989, and as a Technical Service Representative, from February 1987 to
February 1988, of AGR


                                       11
<PAGE>   12

Company, an Ohio General Partnership formerly owned by the Company. Prior
thereto, Mr. Sullivan was employed by First Union National Bank from 1985 to
1986 and Harris Bank from 1983 to 1985. Mr. Sullivan is employed as President
under an employment agreement for a period ending May 31, 2002. Mr. Sullivan is
the son of Thomas C. Sullivan, Chairman of the Board and Chief Executive Officer
of the Company.

                  Glenn R. Hasman was elected Vice President-Finance and
Communications on August 1, 2000. Mr. Hasman served as Vice President-Controller
from August 1999 to August 2000 and served as Vice President-Financial
Operations from October 1993 to August 1999. From July 1990 to October 1993, Mr.
Hasman served as Controller. From September 1982 through July 1990, Mr. Hasman
served in a variety of management capacities, most recently Vice
President-Operations and Finance, Chief Financial Officer and Treasurer, of
Proko Industries, Inc., a former wholly-owned subsidiary of the Company. From
1979 to 1982, Mr. Hasman served as RPM's Director of Internal Audit and from
1976 to 1979 he was associated with Ciulla, Smith & Dale, LLP, independent
accountants. Mr. Hasman is employed as Vice President-Finance and Communications
under an employment agreement that provides for automatic annual renewal.

                  Paul G. Hoogenboom was elected Vice President-Operations on
August 1, 2000. Mr Hoogenboom has also served as Vice President and General
Manager of the Company's e-commerce subsidiary, RPM-e/c, Inc., since 1999. From
1998 to 1999, Mr. Hoogenboom was a Director of Cap Gemini, a computer systems
and technology consulting firm. During 1997, Mr. Hoogenboom was employed as a
strategic marketing consultant for Xylan Corporation, a network switch
manufacturer. From 1994 to 1997, Mr. Hoogenboom was Director of Corporate I.T.
and Communications for A.W. Chesterton Company, a manufacturer of fluid sealing
systems. Mr. Hoogenboom is employed as Vice President-Operations under an
employment agreement that provides for automatic annual renewal.

                  Stephen J. Knoop was elected Vice President-Corporate
Development on August 5, 1999. From June 1996 to August 1999, Mr. Knoop served
as Director of Corporate Development of the Company. From 1990 to May 1996, Mr.
Knoop was an associate at Calfee, Halter & Griswold LLP. Mr. Knoop is employed
as Vice President-Corporate Development under an employment agreement that
provides for automatic annual renewal.

                  Robert L. Matejka was elected Vice President-Controller on
August 1, 2000. From 1995 to 1999, he served as Vice President-Finance of the
motor and drive systems businesses of Rockwell International Corporation. From
1973 to 1995, Mr. Matejka served in various capacities with Reliance Electric
Company, most recently as its Assistant Controller. From 1965 to 1973, he was an
Audit Supervisor with Ernst & Young. Mr. Matejka is employed as Vice President -
Controller under an employment agreement that provides for automatic annual
renewal.

                  Ronald A. Rice was elected Vice President-Risk Management and
Benefits and Assistant Secretary on August 5, 1999. From 1997 to August 1999, he
served as Director of Risk Management and Employee Benefits, and from 1995 to
1997 he served as Director of Benefits. From 1985 to 1995, Mr. Rice served in
various capacities with the Wyatt Company, most recently he served as Senior
Account Manager from 1992 to 1995. Mr. Rice is employed as Vice President-Risk
Management and Benefits and Assistant Secretary under an employment agreement
that provides for automatic annual renewal.


                                       12
<PAGE>   13

                  Keith R. Smiley was elected Vice President and Assistant
Secretary on August 5, 1999, and has served as Treasurer of the Company since
February 1997. From October 1993 to February 1997, he served as Controller of
the Company. From January 1992 until February 1997, Mr. Smiley also served as
the Company's Internal Auditor. Prior thereto, he was associated with Ciulla,
Smith & Dale, LLP. Mr. Smiley is employed as Vice President, Treasurer and
Assistant Secretary under an employment agreement that provides for automatic
annual renewal.

                  P. Kelly Tompkins has served as Vice President, General
Counsel and Secretary since June 1998. From June 1996 to June 1998, Mr. Tompkins
served as Assistant General Counsel. From 1987 to 1995, Mr. Tompkins was
employed by Reliance Electric Company in various positions including Senior
Corporate Counsel, Director of Corporate Development and Director of Investor
Relations. From 1985 to 1987, Mr. Tompkins was employed as a litigation attorney
by Exxon Corporation. Mr. Tompkins is employed as Vice President, General
Counsel and Secretary under an employment agreement that provides for automatic
annual renewal.





                                       13
<PAGE>   14


                                     PART II

ITEM 5.           MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS.

                  RPM Common Shares are traded on the New York Stock Exchange
under the symbol RPM. The high and low sales prices for the Common Shares, and
the cash and stock dividends paid on the Common Shares, for each quarter of the
two most recent fiscal years is set forth in the table below.

                    RANGE OF SALES PRICES AND DIVIDENDS PAID

<TABLE>
<CAPTION>
                                                                                   Dividends Paid
             Fiscal 2001          High                      Low                       Per Share
            -------------         ----                      ---                       ---------
<S>         <C>             <C>                      <C>                             <C>
             1st Quarter     $  10.7500               $    8.6250                     $ 0.1225
             2nd Quarter        10.2500                    7.7500                       0.1250
             3rd Quarter         9.9375                    8.2500                       0.1250
             4th Quarter        10.5000                    8.2500                       0.1250

<CAPTION>

                                                                                   Dividends Paid
             Fiscal 2000          High                     Low                       Per Share
             -----------          ----                     ---                       ---------
<S>         <C>             <C>                      <C>                             <C>
             1st Quarter     $  15.0625               $  13.1250                      $ 0.1175
             2nd Quarter        13.5000                  11.1250                        0.1225
             3rd Quarter        11.8750                   9.5000                        0.1225
             4th Quarter        11.3125                   9.6875                        0.1225
</TABLE>

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

Source:  The Wall Street Journal

                  Cash dividends are payable quarterly, upon authorization of
the Board of Directors. Regular payment dates are approximately the 30th day of
July, October, January and April. RPM maintains a Dividend Reinvestment Plan
whereby cash dividends, and a maximum of an additional $5,000 per month, may be
invested in RPM Common Shares purchased in the open market at no commission cost
to the participant.

                  The number of holders of record of RPM Common Shares as of
August 17, 2001 was approximately 42,036.

RECENT SALES OF UNREGISTERED SECURITIES

                  None.

ITEM 6.           SELECTED FINANCIAL DATA.

                  The following table sets forth selected consolidated financial
data of the Company for each of the five years during the period ended May 31,
2001. The data was derived from the


                                       14
<PAGE>   15

annual Consolidated Financial Statements of the Company which have been audited
by Ciulla, Smith & Dale, LLP, independent accountants.

<TABLE>
<CAPTION>
                                                 FISCAL YEARS ENDED MAY 31,
                                                 --------------------------
                                                 2001           2000*          1999*          1998*           1997*
                                                 ----           -----          -----          -----           -----
(Amounts  in  thousands,  except per share
and percentage data)

<S>                                             <C>            <C>            <C>             <C>             <C>
Net sales                                       $2,007,762     $1,962,410     $1,720,628      $1,623,326      $1,356,588
Income before income taxes                         101,487         71,761        159,597         149,556         135,728
Net income                                          62,961         40,992         94,546          87,837          78,315
Return on sales %                                      3.1%           2.1%           5.5%            5.4%            5.8%
Basic earnings per share                              0.62           0.38           0.87            0.89            0.81
Diluted earnings per share                            0.62           0.38           0.86            0.84            0.76
Shareholders' equity                               639,710        645,724        742,876         566,337         493,398
Shareholders' equity per share                        6.26           6.02           6.83            5.75            5.07
Return on shareholders' equity %                       9.8%           5.9%          14.4%           16.6%           16.7%
Average shares outstanding                         102,202        107,221        108,731          98,527          97,285
Cash dividends paid                                 50,605         51,901         50,446          43,474          39,746
Cash dividends per share                             0.498          0.485          0.465           0.440           0.408
Retained earnings                                  360,458        348,102        359,011         314,911         270,465
Working capital                                    443,652        408,890        402,870         387,284         478,535
Total assets                                     2,078,490      2,099,203      1,737,236       1,685,917       1,633,228
Long-term debt                                     955,399        959,330        582,109         716,989         784,439
Depreciation and amortization                       81,494         79,150         62,135          57,009          51,145
</TABLE>
- ---------------

Note: Acquisitions made by the Company during the periods presented may impact
comparability from year to year. See Note A(2) of Notes to Consolidated
Financial Statements, which appear elsewhere in this Annual Report on Form 10-K,
for information concerning acquisitions for fiscal years 2001 and 2000.

         *Net sales for fiscal years 1997-2000 have been restated for the
Financial Accounting Standard Board's Emerging Issues Task Force pronouncements
adopted in the 2001 fiscal year. This change has no effect on net income. See
Note A(16) of Notes to Consolidated Financial Statements, which appear elsewhere
in this Annual Report on Form 10-K.

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS.

                  The information required by this item is set forth at pages 6
through 13 of the 2001 Annual Report to Shareholders, which information is
incorporated herein by reference.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

                  The Company is exposed to market risk from changes in interest
rates and foreign currency exchange rates since it funds its operations through
long-and short-term borrowings and denominates its business transactions in a
variety of foreign currencies. A summary of the Company's primary market risk
exposures is presented below.


                                       15
<PAGE>   16


Interest Rate Risk

                  The Company's primary interest rate risk exposure results from
floating rate debt including various revolving credit and other lines of credit.
At May 31, 2001, approximately 83% of the Company's total long-term debt
consisted of floating rate debt. If interest rates were to increase 100 basis
points (1%) from May 31, 2001 rates, and assuming no changes in long-term debt
from the May 31, 2001 levels, the additional annual expense would be
approximately $8.0 million on a pre-tax basis. The Company currently does not
hedge its exposure to this floating rate interest rate risk.

Foreign Currency Risk

                  The Company's foreign sales and results of operations are
subject to the impact of foreign currency fluctuations. As most of the Company's
foreign operations are in countries with fairly stable currencies, such as the
United Kingdom, Belgium and Canada, this effect has not been material. In
addition, foreign debt is denominated in the respective foreign currency,
thereby eliminating any related translation impact on earnings. If the dollar
continues to strengthen, the Company's foreign results of operations will be
negatively impacted, but the effect is not expected to be material. A 10%
adverse change in foreign currency exchange rates would not have resulted in a
material impact on the Company's net income for the fiscal year ended May 31,
2001. The Company does not currently hedge against the risk of exchange rate
fluctuations.

Euro Currency Conversion

                  On January 1, 1999, eleven of the fifteen members of the
European Union adopted a new European currency unit (the "euro") as their common
legal currency. The participating countries' national currencies will remain
legal tender as denominations of the euro from January 1, 1999 through January
1, 2002, and the exchange rates between the euro and such national currency
units will be fixed. The Company has assessed the potential impact of the euro
currency conversion on its operating results and financial condition. The impact
of pricing differences on country-to-country indebtedness is not expected to be
material. The Company converted its European operations to the euro currency
basis effective June 1, 1999.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                  The information required by this item is set forth at pages 14
through 30 of the 2001 Annual Report to Shareholders, which information is
incorporated herein by reference.

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE.

                  None.




                                       16
<PAGE>   17



                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

                  Information required by this item as to the Directors of the
Company appearing under the caption "Election of Directors" in the Company's
2001 Proxy Statement is incorporated herein by reference. Information required
by this item as to the Executive Officers of the Company is included as Item 4A
of Part I of this Annual Report on Form 10-K as permitted by Instruction 3 to
Item 401(b) of Regulation S-K. Information required by Item 405 of Regulation
S-K is set forth in the 2001 Proxy Statement under the heading "Section 16(a)
Beneficial Ownership Reporting Compliance," which information is incorporated
herein by reference.

ITEM 11.          EXECUTIVE COMPENSATION.

                  The information required by this item is set forth in the 2001
Proxy Statement under the heading "Executive Compensation," which information is
incorporated herein by reference.

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.

                  The information required by this item is set forth in the 2001
Proxy Statement under the heading "Share Ownership of Principal Holders and
Management," which information is incorporated herein by reference.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

                  The information required by this item is set forth in the 2001
Proxy Statement under the heading "Election of Directors," which information is
incorporated herein by reference.


                                     PART IV

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
                  FORM 8-K.

(a)      The following documents are filed as part of this 2001 Annual Report
         on Form 10-K:

         1.       FINANCIAL STATEMENTS. The following consolidated financial
statements of the Company and its subsidiaries and the report of independent
auditors thereon, included in the 2001 Annual Report to Shareholders on pages 14
through 30, are incorporated by reference in Item 8:

         Independent Auditors' Report

         Consolidated Balance Sheets -
         May 31, 2001 and 2000

         Consolidated Statements of Income -
         years ended May 31, 2001, 2000 and 1999

         Consolidated Statements of Shareholders'


                                       17
<PAGE>   18

         Equity - years ended May 31, 2001, 2000
         and 1999

         Consolidated Statements of Cash Flows -
         years ended May 31, 2001, 2000 and 1999

         Notes to Consolidated Financial
         Statements (including Unaudited Quarterly
         Financial Information)

         2.       FINANCIAL STATEMENT SCHEDULES. The following consolidated
financial statement schedule of the Company and its subsidiaries and the report
of independent auditors thereon are filed as part of this Annual Report on Form
10-K and should be read in conjunction with the consolidated financial
statements of the Company and its subsidiaries included in the 2001 Annual
Report to Shareholders:

         Schedule                                              Page No.
         --------                                              --------

         Independent Auditors' Report                          S-1

         Schedule II - Valuation and Qualifying                S-2
         Accounts and Reserves

         All other schedules have been omitted because they are not applicable
or not required, or because the required information is included in the
consolidated financial statements or notes thereto.

         3.       Exhibits.
                  --------

                  See the Index to Exhibits at page E-1 of this Annual Report on
Form 10-K.

(b)      Reports on Form 8-K.
         -------------------

                  The Company did not file a Current Report on Form 8-K during
the fourth fiscal quarter.




                                       18
<PAGE>   19


                                   SIGNATURES


                  Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                                    RPM, INC.

Date:  August 29, 2001                    By:  /s/ Thomas C. Sullivan
                                               ------------------------
                                               Thomas C. Sullivan
                                               Chairman of the Board and
                                               Chief Executive Officer

                  Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.

Signature and Title

                                         Chairman of the Board of
/s/ Thomas C. Sullivan                   Directors and Chief Executive
- ------------------------------------     Officer (Principal Executive Officer)
Thomas C. Sullivan


/s/ James A. Karman                      Vice Chairman, Chief Financial Officer
- ------------------------------------     and a Director
James A. Karman                          (Principal Financial Officer)

/s/ Frank C. Sullivan
- ------------------------------------     President and a Director
Frank C. Sullivan


/s/ Robert L. Matejka                    Vice President-Controller
- ------------------------------------     (Principal Accounting Officer)
Robert L. Matejka


/s/ Edward B. Brandon                    Director
- ------------------------------------
Edward B. Brandon


/s/ Lorrie Gustin                        Director
- ------------------------------------
Lorrie Gustin


/s/ E. Bradley Jones                     Director
- ------------------------------------
E. Bradley Jones


                                       19
<PAGE>   20


/s/ Donald K. Miller                     Director
- ------------------------------------
Donald K. Miller


/s/ William A. Papenbrock                Director
- ------------------------------------
William A. Papenbrock


/s/ Albert B. Ratner                     Director
- ------------------------------------
Albert B. Ratner


/s/ Jerry Sue Thornton                   Director
- ------------------------------------
Jerry Sue Thornton


/s/ Joseph P. Viviano                    Director
- ------------------------------------
Joseph P. Viviano

Date:  August 29, 2001




                                       20
<PAGE>   21




                                    RPM, INC.

                                  EXHIBIT INDEX


     EXHIBIT NO.        DESCRIPTION
     -----------        -----------

         3.1            Amended Articles of Incorporation, of RPM, Inc., which
                        is incorporated by reference to Exhibit 4.1 to the
                        Company's Registration Statement on Form S-3 as filed
                        with the Commission on January 6, 1997.
         3.2            Amended Code of Regulations.
         4.1            Specimen Certificate of Common Shares, without par
                        value, of RPM, Inc., which is incorporated herein by
                        reference to Exhibit 4.1 to the Company's Annual Report
                        on Form 10-K for the fiscal year ended May 31, 1998.
         4.2            Specimen Note Certificate for 7.0% Senior Notes Due
                        2005, which is incorporated herein by reference to
                        Exhibit 4.3 to the Company's Registration Statement on
                        Form S-4 as filed with the Commission on August 3, 1995.
         4.3            Specimen Note Certificate of Liquid Asset Notes With
                        Coupon Exchange ("LANCEs(SM)") Due 2008, which is
                        incorporated herein by reference to Exhibit 4.3 to the
                        Company's Annual Report on Form 10-K for the fiscal year
                        ended May 31, 1998.
         4.4            Rights Agreement by and between RPM, Inc. and Harris
                        Trust and Savings Bank dated as of April 28, 1999, which
                        is incorporated herein by reference to Exhibit 4.1 to
                        the Company's Registration Statement on Form 8-A as
                        filed with the Commission on May 11, 1999.
        4.4.1           Amendment to Rights Agreement dated December 18, 2000 by
                        and among the Company, Computershare Investor Services
                        (formerly Harris Trust and Savings Bank) and National
                        City Bank.
         4.5            Indenture, dated as of June 1, 1995, between RPM, Inc.
                        and The First National Bank of Chicago, as trustee, with
                        respect to the 7.0% Senior Notes Due 2005, which is
                        incorporated herein by reference to Exhibit 4.5 to the
                        Company's Registration Statement on Form S-4 as filed
                        with the Commission on August 3, 1995.
         4.6            First Supplemental Indenture, dated as of March 5, 1998
                        to the Indenture dated as of June 1, 1995, between RPM,
                        Inc. and The First National Bank of Chicago, as trustee,
                        with respect to the Liquid Asset Notes with Coupon
                        Exchange ("LANCEs(SM)") due 2008, which is incorporated
                        herein by reference to Exhibit 4.6 to the Company's
                        Annual Report on Form 10-K for the fiscal year ended May
                        31, 1998.
        *10.1           Amended and Restated Employment Agreement, dated as of
                        February 1, 2001, by and between RPM, Inc. and Thomas C.
                        Sullivan, Chairman of the Board and Chief Executive
                        Officer, which is incorporated herein by reference to
                        Exhibit 10.1 to the Company's Quarterly Report on Form
                        10-Q for the quarterly period ended February 28, 2001.



                                       E-1
<PAGE>   22
     EXHIBIT NO.        DESCRIPTION
     -----------        -----------

         *10.2          Amended and Restated Employment Agreement, dated as of
                        February 1, 2001, by and between RPM, Inc. and James A.
                        Karman, Vice Chairman and Chief Financial Officer, which
                        is incorporated herein by reference to Exhibit 10.1 to
                        the Company's Quarterly Report on Form 10-Q for the
                        quarterly period ended February 28, 2001.
         *10.3          Form of Employment Agreement entered into by and between
                        RPM, Inc. and each of Frank C. Sullivan, President, P.
                        Kelly Tompkins, Vice President, General Counsel and
                        Secretary, Glenn R. Hasman, Vice President - Finance and
                        Communications, Stephen J. Knoop, Vice President -
                        Corporate Development, Robert L. Matejka, Vice President
                        - Controller, Ronald A. Rice, Vice President - Risk
                        Management and Benefits and Assistant Secretary and
                        Keith R. Smiley, Vice President, Treasurer and Assistant
                        Secretary, which is incorporated herein by reference to
                        Exhibit 10.1 to the Company's Quarterly Report on Form
                        10-Q for the quarterly period ended February 28, 2001.
         *10.4          RPM, Inc. 1989 Stock Option Plan, as amended, and form
                        of Stock Option Agreements to be used in connection
                        therewith.
         *10.5          RPM, Inc. 1996 Stock Option Plan, and form of Stock
                        Option Agreement to be used in connection therewith,
                        which is incorporated by reference to Exhibit 10.7 to
                        the Company's Annual Report on Form 10-K for the fiscal
                        year ended May 31, 1997.
         *10.5.1        Amendment No. 1 to RPM, Inc. 1996 Stock Option Plan,
                        which is incorporated herein by reference to Exhibit
                        10.7.1 to the Company's Annual Report on Form 10-K for
                        the fiscal year ended May 31, 1998.
         *10.5.2        Amendment to RPM, Inc. 1996 Stock Option Plan, which is
                        incorporated herein by reference to Exhibit 4.3.1 to the
                        Company's Registration Statement on Form S-8 as filed
                        with the Commission on May 3, 2001.
         *10.6          RPM, Inc. Retirement Savings Trust and Plan, as amended.
         *10.7          RPM, Inc. Benefit Restoration Plan.
         *10.8          RPM, Inc. Board of Directors' Deferred Compensation
                        Agreement, as amended and restated, which is
                        incorporated herein by reference to Exhibit 10.10 to the
                        Company's Annual Report on Form 10-K for the fiscal year
                        ended May 31, 1999.
         *10.9          RPM, Inc. Deferred Compensation Plan for Key Employees,
                        which is incorporated herein by reference to Exhibit
                        10.11 to the Company's Annual Report on Form 10-K for
                        the fiscal year ended May 31, 1999.
         *10.10         RPM, Inc. Incentive Compensation Plan.
         *10.11         RPM, Inc. 1997 Restricted Stock Plan, and Form of
                        Acceptance and Escrow Agreement to be used in connection
                        therewith, which is incorporated by reference to Exhibit
                        10.1 to the Company's Quarterly Report on Form 10-Q for
                        the quarterly period ended November 30, 1997.
         *10.12         Form of Indemnification Agreement entered into by and
                        between the Company and each of its Directors and
                        Executive Officers.


                                       E-2
<PAGE>   23

     EXHIBIT NO.        DESCRIPTION
     -----------        -----------

          10.13         364-Day $200,000,000 Credit Agreement, dated as of July
                        14, 2000, among the Company, The Chase Manhattan Bank as
                        Administrative Agent and Chase Securities Inc., which is
                        incorporated by reference to Exhibit 10.15 to the
                        Company's Annual Report on Form 10-K for the fiscal year
                        ended May 31, 2000.
          10.14         Five-Year $500,000,000 Credit Agreement, dated as of
                        July 14, 2000, among the Company, The Chase Manhattan
                        Bank as Administrative Agent and Chase Securities Inc.,
                        which is incorporated by reference to Exhibit 10.16 to
                        the Company's Annual Report on Form 10-K for the fiscal
                        year ended May 31, 2000.
          10.15         Commercial Paper Placement Agency Agreement, dated as of
                        August 10, 1999, between the Company and Chase
                        Securities, Inc. (similar forms of agreement were also
                        executed with Banc One Capital Markets, Inc. and Banc of
                        America Securities LLC) incorporated herein by reference
                        to Exhibit 10.3 to the Company's Quarterly Report on
                        Form 10-Q for the quarterly period ended August 31,
                        1999.
          11.1          Computation of Net Income per Common Share.
          13.1          Financial Statements contained in 2001 Annual Report to
                        Shareholders.
          21.1          Subsidiaries of the Company.
          23.1          Consent of Independent Certified Public Accountants.

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

         *Management contract or compensatory plan or arrangement identified
pursuant to Item 14(c) of this Form 10-K.


                                      E-3
<PAGE>   24



              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE




To The Board of Directors and
  Shareholders
RPM, Inc. and Subsidiaries
Medina, Ohio



The audits referred to in our report to the Board of Directors and Shareholders
of RPM, Inc. and Subsidiaries dated July 2, 2001 relating to the consolidated
financial statements of RPM, Inc. and Subsidiaries included the audit of the
schedule listed under Item 14 of Form 10-K for each of the three years in the
period ended May 31, 2001. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based upon our audits.

In our opinion such financial statement schedule presents fairly, in all
material respects, the information set forth therein.


/s/ Ciulla, Smith & Dale LLP
Ciulla, Smith & Dale, LLP

August 28, 2001




                                      S-1

<PAGE>   25


                           RPM, INC. AND SUBSIDIARIES
                           --------------------------
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES    Schedule II
                 ----------------------------------------------
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                 Additions
                                                                                 Charged to
                                           Balance at         Additions           Selling,            Additions
                                            Beginning        Charged to         General and          Charged to
                                            Of Period       Cost of Sales      Administrative       Restructuring
                                           -----------      -------------     ---------------      ---------------
<S>                                        <C>              <C>               <C>                  <C>
Year Ended May 31, 2001
- -----------------------
   Allowance for doubtful accounts         $    16,248      $                 $         8,817      $
                                           ===========      =============     ===============      ===============
   Accrued loss reserves - Current         $    64,765      $                 $        15,329      $
                                           ===========      =============     ===============      ===============
   Accrued warranty reserves - Long-term   $    13,740      $                 $         (209)      $
                                           ===========      =============     ===============      ===============
   Accrued restructuring reserves          $    13,540      $                 $                    $
                                           ===========      =============     ===============      ===============
Year Ended May 31, 2000
- -----------------------
   Allowance for doubtful accounts         $    14,248      $                 $         9,794      $
                                           ===========      =============     ===============      ===============
   Accrued loss reserves - Current         $    49,296      $                 $        28,241      $
                                           ===========      =============     ===============      ===============
   Accrued warranty reserves - Long-term   $    18,816      $                 $       (2,836)      $
                                           ===========      =============     ===============      ===============
   Accrued restructuring reserves          $     1,638      $       7,876     $                    $        51,970
                                           ===========      =============     ===============      ===============
Year Ended May 31, 1999
- -----------------------
   Allowance for doubtful accounts         $    12,718      $                 $         6,205      $
                                           ===========      =============     ===============      ===============
   Accrued loss reserves - Current         $    43,332      $                 $        10,248      $
                                           ===========      =============     ===============      ===============
   Accrued warranty reserves - Long-term   $    23,496      $                 $       (1,204)      $
                                           ===========      =============     ===============      ===============
   Accrued restructuring reserves          $     5,719      $                 $                    $
                                           ===========      =============     ===============      ===============

<CAPTION>

                                                                                       Balance at
                                                                                           End
                                           Acquisitions        Deductions               Of Period
                                           -------------      ------------           ---------------
<S>                                        <C>                <C>                    <C>
Year Ended May 31, 2001
- -----------------------
   Allowance for doubtful accounts         $          10      $      7,370  (1)      $        17,705
                                           =============      ============           ===============
   Accrued loss reserves - Current         $                  $     24,678  (2)      $        55,416
                                           =============      ============           ===============
   Accrued warranty reserves - Long-term   $                  $      1,572  (2)      $        11,959
                                           =============      ============           ===============
   Accrued restructuring reserves          $                  $     13,540  (3)      $
                                           =============      ============           ===============
Year Ended May 31, 2000
- -----------------------
   Allowance for doubtful accounts         $         644      $      8,438  (1)      $        16,248
                                           =============      ============           ===============
   Accrued loss reserves - Current         $       9,119      $     21,891  (2)      $        64,765
                                           =============      ============           ===============
   Accrued warranty reserves - Long-term   $                  $      2,240  (2)      $        13,740
                                           =============      ============           ===============
   Accrued restructuring reserves          $                  $     47,944  (3)      $        13,540
                                           =============      ============           ===============
Year Ended May 31, 1999
- -----------------------
   Allowance for doubtful accounts         $         584      $      5,259  (1)      $        14,248
                                           =============      ============           ===============
   Accrued loss reserves - Current         $         363      $      4,647  (2)      $        49,296
                                           =============      ============           ===============
   Accrued warranty reserves - Long-term   $                  $      3,476  (2)      $        18,816
                                           =============      ============           ===============
   Accrued restructuring reserves          $                  $      4,081  (3)      $         1,638
                                           =============      ============           ===============
</TABLE>

(1)  Uncollectible accounts written off, net of recoveries
(2)  Primarily claims paid during the year
(3)  Restructuring initiatives completed during the year


                                      S-2






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>l89965aex3-2.txt
<DESCRIPTION>EXHIBIT 3.2
<TEXT>
<PAGE>   1
                                                                   Exhibit 3.2
                                    RPM, INC.

                           AMENDED CODE OF REGULATIONS

                        (AS AMENDED ON OCTOBER 14, 1987)

                                    ARTICLE I

                                  SHAREHOLDERS


SECTION 1.                 ANNUAL MEETING.

                  The Annual Meeting of Shareholders of the Company for the
election of Directors, the consideration of financial statements and other
reports to be laid before such meeting, and the transaction of such other
business as may be brought before such meeting shall be held at such date and
time during the month of September or October of each year as shall be
designated by the Board of Directors. If no other date is designated by the
Board of Directors, the Annual Meeting shall be held at 2:00 o'clock P.M. on the
fourth Thursday in October of each year, if not a legal holiday, or, if a legal
holiday, then on the next succeeding business day. Upon due notice there may
also be considered and acted upon at an Annual Meeting any matter which could
properly be considered and acted upon at a Special Meeting.

SECTION 2.                 SPECIAL MEETINGS.

                  Special Meetings of Shareholders of the Company may be held on
any business day when called by the Chairman of the Board, or the President, or
by the Board of Directors acting at a meeting, or a majority of the Directors
acting without a meeting, or by shareholders holding at least forty-five percent
(45%) of all shares outstanding and entitled to vote thereat. Special Meetings
may convene only between the hours of 9:00 o'clock A.M. and 4:00 o'clock P.M.
Upon request in writing delivered either in person or by registered mail to the
President or the Secretary by any persons entitled to call a meeting of
shareholders, such officer shall in accordance with the provisions of Section 4
of this Article I, forthwith cause to be given to the shareholders entitled
thereto the requisite notice of a meeting to be held on a date not less than
seven (7) nor more than sixty (60) days after receipt of such request, as such
officer may fix. If such notice is not given within thirty (30) days after the
delivery or mailing of such request, the persons calling the meeting may fix the
date and time of the meeting and give notice thereof in the manner provided by
law and these Regulations, or cause such notice to be given by any designated
representative. Calls for Special Meetings shall specify the purpose or purposes
thereof, and no business shall be considered at any such meeting other than that
specified in the call therefor.



<PAGE>   2



SECTION 3.                 PLACE OF MEETINGS.

                  Meetings of shareholders shall be held at the principal office
of the Company in the State of Ohio unless the Board of Directors acting at a
meeting or a majority of the Directors acting without a meeting, designates some
other place either within or without the State of Ohio and causes the notice
thereof to so specify.

SECTION 4.                 NOTICE OF MEETINGS AND WAIVER.

                  (a) Not less than seven (7) nor more than sixty (60) days
before the date fixed for a meeting of shareholders, written notice stating the
time, place and purposes of such meeting shall be given by or at the direction
of the Chairman of the Board, the President, the Secretary, an Assistant
Secretary, or any other person required or permitted by these Regulations to
give such notice. The notice shall be given by personal delivery or by mail to
each shareholder entitled to notice of the meeting who is of record as of the
date next preceding the day on which notice is given, or, if another record date
therefor is duly fixed, of record as of said date. If mailed, such notice shall
be addressed to the shareholders at their respective addresses as they appear on
the records of the Company, and such notice shall be deemed to have been given
on the date on which it was deposited in the mail. If said record date shall
fall on a holiday, the record date shall be taken as of the close of business on
the next preceding day which is not a holiday.

                  (b) Notice of the time, place and purposes of any meeting of
shareholders may be waived by any shareholder in writing, either before or after
the holding of such meeting, which writing shall be filed with or entered upon
the records of the meeting. The attendance of a shareholder at any such meeting
without protesting, prior to or at the commencement of such meeting, the lack of
proper notice shall be deemed to be a waiver by him of notice of such meeting.

SECTION 5.                 QUORUM AND ADJOURNMENT.

                  (a) At any meeting of shareholders, the holders of shares
entitling them to exercise a majority of the voting power of the Company,
present in person or by proxy, shall constitute a quorum for such meeting;
provided, however, that no action required by law, the Amended Articles of
Incorporation or these Regulations to be authorized or taken by the holders of a
designated proportion of shares of any particular class or of each class of the
Company may be authorized or taken by a lesser proportion; and provided further,
that the holders of a majority of the voting shares represented at a meeting,
whether or not a quorum is present, may adjourn such meeting from time to time.


                                       -2-

<PAGE>   3



                  (b) If any meeting is adjourned, notice of adjournment need
not be given if the time and place to which it is adjourned are fixed and
announced at such meeting, except as otherwise provided in Article IV.

SECTION 6.                 ORGANIZATION OF MEETINGS.

                  (a) The President or in his absence such officer as shall be
designated by the Board of Directors, or lacking such designation any Vice
President, shall call to order all meetings of shareholders and act as chairman
thereof.

                  (b) The Secretary, or in his absence an Assistant Secretary,
shall act as secretary and keep the minutes of all meetings of shareholders, and
in the absence of both, the officer acting as chairman of the meeting shall
appoint any other officer to perform such duties.

                  (c) At each meeting an alphabetically arranged list or
classified list of shareholders of record who are entitled to vote as of the
applicable record date, showing their respective addresses and the number and
class of shares held by each, shall be produced by the Secretary, Assistant
Secretary or the particular agent having charge of the transfer of the shares.
This list, when certified by such officer or agent, shall be prima facie
evidence of the ownership or the facts shown therein.

SECTION 7.                 INSPECTORS OF ELECTION.

                  (a) The Directors, in advance of any meeting of shareholders,
may appoint inspectors of election to act at such meeting or any adjournments
thereof. If inspectors are not so appointed, the officer or person acting as
chairman of any such meeting may, and on the request of any shareholder or his
proxy shall, make such appointment.

                  (b) In case any person appointed as inspector fails to appear
or act, the vacancy may be filled by appointment made by the Directors in
advance of the meeting, or at the meeting by the officer or person acting as
chairman.

                  (c) If there are three (3) or more inspectors, the decision,
act or certificate of a majority of them shall be effective in all respects as
the decision, act or certificate of all.

                  (d) The inspectors shall determine the number of shares
outstanding, the voting rights with respect to each, the shares represented at
the meeting, the existence of a quorum, and the authenticity, validity and
factual effect of proxies; receive votes, ballots, consents, waivers or
releases; hear and determine all matters of challenges, ownership and questions
arising in connection with the voting; count and tabulate all votes, consents,

                                       -3-

<PAGE>   4



waivers and releases; determine and announce the result; and do such other acts
as are proper to conduct the election or vote with fairness to all shareholders.

                  (e) On request, the inspectors shall make a report in writing
of any challenge, question or matter determined by them and execute a
certificate of any fact found by them. The certificate of the inspectors shall
be prima facie evidence of the facts stated therein and of the results of the
voting as certified by them.

SECTION 8.                 VOTING.

                  Except as otherwise provided by statute, the Amended Articles
of Incorporation or these Regulations, every shareholder entitled to vote shall
be entitled to cast one vote, in person or by proxy, on each proposal submitted
to the meeting for each share held of record by him on the record date for the
determination of the shareholders entitled to vote at such meeting. At any
meeting at which a quorum is present all questions and business which shall come
before the meeting shall be determined by the vote of the holders of a majority
of such voting shares as are represented in person or by proxy at such meeting,
except when a greater proportion is required by law, the Amended Articles of
Incorporation or these Regulations.

SECTION 9.                 PROXIES.

                  A person who is entitled to attend a shareholders' meeting, to
vote thereat or to execute consents, waivers or releases, may be represented at
such meeting or vote thereat, and execute consents, waivers and releases, and
exercise any of his rights by proxy or proxies appointed by a writing signed by
such person or his duly authorized agent, as provided by the laws of the State
of Ohio.


                                   ARTICLE II

                               BOARD OF DIRECTORS

SECTION 1.                 GENERAL POWERS.

                  Except where the law, the Amended Articles of Incorporation or
these Regulations require action to be authorized or taken by shareholders, all
of the authority of the Company shall be exercised by the Board of Directors.

SECTION 2.                 NUMBER OF DIRECTORS.

                  The Board of Directors of the Company, none of whom need be
shareholders, shall consist of not less than nine (9) nor more than fifteen (15)
members. Without amendment of these Regulations, the number of Directors within
the above limitation

                                       -4-

<PAGE>   5



may be fixed or changed at any Annual or Special Meeting of Shareholders called
for that purpose at which a quorum is present, by the affirmative vote of the
holders of a majority of the shares which are represented at the meeting and
entitled to vote on such proposal; provided, however, that the number of
Directors fixed at any meeting may not be greater by more than one Director than
the number fixed or authorized at the next preceding Annual Meeting of
Shareholders, and provided further, that no reduction in the number of Directors
shall of itself have the effect of shortening the term of any incumbent
Director. Whenever the shareholders shall have so fixed the number of Directors,
such number shall thereafter continue to be the authorized number of Directors
until the same shall be changed by vote of the shareholders as above provided.

SECTION 3.                 CLASSIFICATION OF DIRECTORS.

                  The Board of Directors shall be divided into three classes,
with each class consisting of not less than three (3) Directors. Each Class
shall consist of an equal number of Directors, except that in the event the
total number of Directors is not divisible by three (3), an extra Director shall
be assigned to Class I if there is one (1) extra Director to be assigned among
the classes, and an extra Director shall be assigned to each of Classes I and II
if there are two (2) extra Directors to be assigned among the classes. Neither
the repeal nor any amendment of the provisions of this Section 3 shall have the
effect of shortening the term of any incumbent Director.

SECTION 4.                 ELECTION OF DIRECTORS.

                  The Directors shall be elected at the Annual Meeting of
Shareholders, or if the Annual Meeting is not held or Directors are not elected
thereat, at a Special Meeting of Shareholders called and held for that purpose.
A separate election shall be held for each class of Directors. At a meeting of
shareholders at which Directors are to be elected, only persons nominated as
candidates shall be eligible for election as Directors, and the candidates
receiving the greatest number of votes shall be elected.

SECTION 5.                 TERM OF OFFICE AND VACANCIES.

                  (a) The term of office of those Directors elected to Class III
at the meeting of shareholders at which this subparagraph (a) is adopted shall
expire at the Annual Meeting of Shareholders next ensuing; the term of office of
those Directors elected to Class II at the meeting of shareholders at which this
subparagraph (a) is adopted shall expire at the second Annual Meeting next
ensuing; and the term of office of those Directors elected to Class I at the
meeting of shareholders at which this Section 5 is adopted shall expire at the
third Annual Meeting next ensuing. The foregoing notwithstanding, each Director
shall serve until his successor shall have been duly elected, or until his
earlier resignation, removal from office, or death. At each Annual Meeting

                                       -5-

<PAGE>   6



of Shareholders held after the first election of Directors by class, Directors
chosen to succeed those whose terms expire shall be identified as belonging to
the same class as the Directors they succeed and shall be elected for a term
ending at the third Annual Meeting of Shareholders next following their election
or until their earlier resignation, removal from office, or death.

                  (b) Any Director may resign at any time by oral statement to
that effect made at a meeting of the Board or in a writing to that effect
delivered to the President or Secretary, such resignation to take effect
immediately or at such other time as the Directors may specify.

                  (c) In the event of the occurrence of any vacancy or vacancies
in the Board of Directors, irrespective of the reason therefor, the remaining
Directors, though less than a majority of the whole authorized number of
Directors, may by the vote of a majority of their number fill such vacancy or
vacancies for the remainder of the unexpired term.

SECTION 6.                 MEETINGS, NOTICE AND WAIVER.

                  (a) As soon after each Annual Meeting of Shareholders (or
Special Meeting held in lieu thereof) as practicable, the Directors shall hold
an organizational meeting for the purpose of electing officers and the
transaction of any other business. Other meetings of the Board may be held at
any time upon the call of the Chairman of the Board, the President, or any two
(2) Directors. Meetings of the Board may be held within or without the State of
Ohio. Written notice of the time and place of each meeting of the Board shall be
given to each Director either by personal delivery, mail, telegram or cablegram
at least two (2) days before the meeting, which notice need not specify the
purposes of the meeting. Unless otherwise specifically stated in the notice
thereof any business may be transacted at any meeting of the Board.

                  (b) Notice of any meeting of the Board may be waived by any
Director in writing, either before or after such meeting, or by his attendance
at any such meeting without protesting the lack of proper notice prior to or at
the commencement of such meeting. If any meeting is adjourned, notice of the
adjournment need not be given if the time and place to which it is adjourned are
fixed and announced at such meeting.

SECTION 7.                 QUORUM AND VOTING.

                  (a) At any meeting of the Board of Directors, not less than
one-half of the Directors then in office shall be necessary to constitute a
quorum for the transaction of business at such meeting, provided that a majority
of the Directors at a meeting duly held, whether or not a quorum exists, may
adjourn such meeting from time to time.


                                       -6-

<PAGE>   7



                  (b) At any meeting of the Board of Directors at which a quorum
is present, all acts, questions and business which may come before the meeting
shall be determined by a majority vote of those Directors present, unless the
vote or act of a greater number is required by the Amended Articles of
Incorporation or these Regulations.

SECTION 8.                 ACTION OF DIRECTORS WITHOUT A MEETING.

                  Any action which may be authorized or taken at a meeting of
the Board of Directors may be authorized or taken without a meeting if approved
and authorized by a writing or writings signed by all the Directors, which
writing or writings shall be filed with or entered upon the records of the
Company.

SECTION 9.                 COMMITTEES.

                  (a) The Board of Directors may from time to time appoint
certain of its members (but not less than three (3)) to act as a Committee or
Committees of Directors, and, subject to the provisions of this Section, may
delegate to any such Committee any of the authority of the Board, however
conferred, other than that of filling vacancies among the Directors or in any
Committees of Directors. The Board of Directors may likewise appoint one or more
Directors as alternate members of any such Committee, who may take the place of
any absent member or members at any meeting of such Committee. Each such member
and each such alternate shall serve in such capacity at the pleasure of the
Board of Directors.

                  (b) In particular, the Board of Directors may create an
Executive Committee in accordance with the provisions of this Section. If
created, the Executive Committee shall possess and may exercise all of the
powers of the Board in the management and control of the business of the Company
during the intervals between meetings of the Board subject to the provisions of
this Section. The chairman of the Executive Committee shall be determined by the
Board of Directors from time to time. All action taken by the Executive
Committee shall be reported in writing to the Board of Directors at its first
meeting thereafter.

                  (c) Each such Committee shall serve at the pleasure of the
Board of Directors, shall act only in the intervals between meetings of the
Board, and shall be subject to the control and direction of the Board. Each
Committee shall keep regular minutes of its proceedings and shall report the
same to the Board when required.

                  (d) An act or authorization of any act by any such Committee
within the authority delegated to it shall be effective for all purposes as the
act or authorization of the Board of Directors. In every case the affirmative
vote of a majority of its members at a meeting, or the written consent of all of
the members

                                       -7-

<PAGE>   8



of any such Committee without a meeting, shall be necessary for the taking or
approval of any action.

                  (e) Each such Committee may prescribe such rules as it shall
determine for calling and holding meetings and its method of procedure, subject
to the provisions of this Section and any rules prescribed by the Board of
Directors.

SECTION 10.                COMPENSATION.

                  For his attendance at each meeting of the Board of Directors
or of a Committee of Directors, or for other services rendered, each Director
shall receive such reasonable compensation, reimbursement for expenses, and
other benefits as the Board shall from time to time determine and irrespective
of any personal interest of any of them.


                                   ARTICLE III

                                    OFFICERS

SECTION 1.                 GENERAL PROVISIONS, POWERS AND DUTIES.

                  (a) The Board of Directors, at its organization meeting, shall
elect a President, a Secretary and a Treasurer, and, in its discretion, may
elect a Chairman of the Board, one or more Vice Presidents, Assistant
Secretaries, Assistant Treasurers, and such other officers as the Board may from
time to time deem necessary. The Chairman of the Board, if any, and the
President, shall be chosen from among the members of the Board; however, none of
the other officers need be a Director. Any two (2) or more of such offices may
be held by the same person, but no officer shall execute, acknowledge, attest or
verify any instrument in more than one capacity if such instrument is required
to be executed, acknowledged, attested or verified by two (2) or more officers.

                  (b) All officers, as between themselves and the Company, shall
respectively have such authority and perform such duties as are customarily
incident to their respective offices and as may be specified from time to time
by the Board of Directors regardless of whether such authority and duties are
customarily incident to such offices. In the absence of any officer of the
Company, or for any other reason the Board may deem sufficient, the Board may
delegate from time to time the powers or duties of such officer, or any of them,
to any other officer or to any Director. The Board may from time to time
delegate to any officer authority to appoint and remove subordinate officers and
to prescribe their authority and duties.


                                       -8-

<PAGE>   9



SECTION 2.                 TERM OF OFFICE, REMOVAL AND VACANCIES.

                  Each elected officer of the Company shall hold office until
the next organizational meeting of the Board of Directors and until his
successor is elected, or until his earlier resignation, death, removal from
office or retirement. The Board of Directors may remove any officer at any time,
with or without cause, by a majority vote of the members of the Board then in
office. Any vacancy in any office may be filled by the Board of Directors.

SECTION 3.                 CHIEF EXECUTIVE OFFICER.

                  If no Chairman of the Board is elected, the President shall be
the Chief Executive Officer of the Company. If a Chairman of the Board is
elected, the Board shall designate either the Chairman of the Board or the
President as Chief Executive Officer. Subject to the direction of the Board, the
Chief Executive Officer of the Company shall have general executive supervision
over and direction of the Company's business, affairs and property, and over its
several officers, in addition to his duties set forth in Section 4 and 5 of this
Article III, as the case may be, and shall see that all orders and resolutions
of the Board are carried into effect.

SECTION 4.                 CHAIRMAN OF THE BOARD.

                  The Chairman of the Board, if one is elected, shall preside at
all meetings of the Board of Directors, may execute any documents in the name of
the Company, and shall have such authority and perform such other duties as may
be prescribed by the Board.

SECTION 5.                 PRESIDENT.

                  The President shall preside at all meetings of shareholders,
and, unless there shall be a Chairman of the Board so presiding in accordance
with Section 4 of this Article, at all meetings of the Board of Directors. The
President shall have general and active supervision of the operations of the
Company, subject to the direction of the Board of Directors. In the absence or
incapacity of the Chairman of the Board, or if one shall not have been elected,
the President shall perform all duties and functions of the Chairman of the
Board. He may execute any documents in the name of the Company and shall have
such other authority and perform such other duties as may be prescribed by the
Board.

SECTION 6.                 VICE PRESIDENTS.

                  The Vice President or Vice Presidents, if any are elected,
shall have such authority and shall perform such duties as may be prescribed by
the Board of Directors or as may be delegated to them by the Chairman of the
Board or the President from time to time.

                                       -9-

<PAGE>   10




SECTION 7.                 SECRETARY.

                  The Secretary shall keep the minutes of the meetings of
Shareholders and of the Board of Directors. He shall keep such books and records
as may be required by the Board of Directors, give such notice of Shareholders'
meetings and Board meetings as may be required by law or these Regulations, or
otherwise, and perform such other duties as the Board may prescribe.

SECTION 8.                 TREASURER.

                  The Treasurer shall be the chief financial officer, and if
there is no Controller, the chief accounting officer of the Company. He shall
receive and have charge of all moneys, bills, notes, bonds, stocks in other
corporations, and similar property belonging to the Company, and shall do with
the same as shall be ordered by the Board of Directors. He shall keep accurate
financial accounts and hold the same open for inspection and examination by the
Directors, and shall have such authority and shall perform such other duties as
may be prescribed by the Board of Directors.

SECTION 9.                 CONTROLLER.

                  The Controller, if one is elected, shall be the chief
accounting officer of the Company. He shall prepare such accounting statistics,
records and reports as may be prescribed by the Board of Directors and generally
do and perform all such other duties as may be prescribed by the Board.

SECTION 10.                ASSISTANT OFFICERS.

                  Assistant Secretaries, Assistant Treasurers and/or Assistant
Controllers, if any, shall have such powers and perform such duties as shall be
delegated and directed by their respective principal officers or as the Board
may prescribe.

SECTION 11.                OTHER OFFICERS.

                  All other officers shall have such powers and perform such
duties as the Board of Directors may prescribe.

SECTION 12.                DELEGATION OF AUTHORITY AND DUTIES.

                  The Board of Directors is authorized to delegate the authority
and duties of any officer to any other officer and generally to control the
action of the officers and to require the performance of duties in addition to
those mentioned herein.

SECTION 13.                COMPENSATION.

                  The Board of Directors is authorized to establish officers'
compensation for services to the Company, or to provide

                                      -10-

<PAGE>   11



the method of determining such compensation, which may include pensions,
disability and death benefits or other benefits, and may be by way of fixed
salary, or on the basis of earnings of the Company, or any combination thereof,
or otherwise, or the Board may delegate such authority to a committee of the
Board or to any one or more officers or Directors.


                                   ARTICLE IV

                                  RECORD DATES

                  For any lawful purpose including without limitation the
determination of the Shareholders who are entitled to: (1) receive notice of or
to vote at a meeting of Shareholders; (2) receive payment of any dividend or
distribution; (3) receive or exercise rights of purchase of or subscription for,
or exchange or conversion of, shares or other securities, subject to contract
rights with respect thereto; or (4) participate in the execution of written
consents, waivers or releases; the Board of Directors may fix a record date
which shall not be a date earlier than the date on which the record date is
fixed and, in the cases provided for in clauses (1), (2), and (3) above, shall
not be more than sixty (60) days preceding the date of the meeting of
shareholders, or the date fixed for the payment of any dividend or distribution,
or the date fixed for the receipt or the exercise of rights, as the case may be.
The record date for the purpose of the determination of the shareholders who are
entitled to receive notice of or to vote at a meeting of shareholders shall
continue to be the record date for all adjournments of such meeting, unless the
Board of Directors or the persons who shall have fixed the original record date
shall, subject to the limitations set forth in this Article, fix another date.
In case a new record date is so fixed, notice thereof and of the date to which
the meeting shall have been adjourned shall be given to shareholders of record
as of such date in accordance with the same requirements as those applying to a
meeting newly called. The Board of Directors may close the share transfer books
against transfers of shares during the whole or any part of the period provided
for in this Article, including the date of the meeting of shareholders and the
period ending with the date, if any, to which adjourned.


                                    ARTICLE V

                             CERTIFICATES FOR SHARES

SECTION 1.                 FORM OF CERTIFICATES AND SIGNATURES.

                  Each holder of shares is entitled to one or more certificates,
signed by the Chairman of the Board or the President or a Vice President and by
the Secretary or Assistant Secretary or the Treasurer or Assistant Treasurer of
the Company, which shall

                                      -11-

<PAGE>   12



certify the number and class of shares held by such shareholder in the Company,
but no certificates for shares shall be executed or delivered until such shares
are fully paid. When such a certificate is countersigned by an incorporated
transfer agent or registrar, the signature of any of said officers of the
Company may be a facsimile, engraved, stamped or printed. Although any officer
of the Company whose manual or facsimile, engraved, stamped or printed signature
is affixed to such a certificate ceases to be such officer before the
certificate is delivered, such certificate shall be effective in all respects
when delivered.

SECTION 2.                 TRANSFER OF SHARES.

                  Shares of the Company shall be transferable upon the books of
the Company by the holder thereof in person or by his duly authorized attorney,
upon surrender and cancellation of certificates for a like number of shares of
the same class or series, with duly executed assignment and power of transfer
endorsed thereon or attached thereto, and with such proof of authenticity of the
signatures to such assignment and power of transfer as the Company or its agents
may reasonably require.

SECTION 3.                 LOST, STOLEN OR DESTROYED CERTIFICATES.

                  The Company may issue a new certificate for shares in place of
any certificate or certificates theretofore issued by the Company alleged to
have been lost, stolen or destroyed and upon the making of an affidavit of that
fact by the person claiming the certificate to have been lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion, and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representatives, to give the Company a
bond in such sum and containing such terms as the Board may direct as indemnity
against any claim that may be made against the Company with respect to the
certificate or certificates alleged to have been lost, stolen or destroyed.

SECTION 4.                 TRANSFER AGENTS AND REGISTRARS.

                  The Board of Directors may appoint, or revoke the appointment
of, transfer agents and registrars and may require all certificates for shares
to bear the signatures of such transfer agents and registrars or any of them.

SECTION 5.                 ADDITIONAL BOARD AUTHORITY.

                  The Board of Directors shall have authority to make all such
rules and regulations consistent with any applicable laws, the Amended Articles
of Incorporation and these Regulations, as it may deem necessary or desirable
concerning the issuance, execution and

                                      -12-

<PAGE>   13



delivery, transfer and registration, surrender and cancellation of certificates
for shares of the Company.


                                   ARTICLE VI

                     INDEMNIFICATION OF DIRECTORS, OFFICERS,
                         TRUSTEES, EMPLOYEES AND AGENTS

SECTION 1.                 IN GENERAL.

                  Upon the submission of a reasonably timely written request for
indemnification setting forth the facts of and reasons for such request, the
Company shall indemnify any person who was or is a party or is threatened to be
made a party, to any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative, other
than an action brought by or in the right of the Company, if his involvement in
such action, suit or proceeding arises by reason of the fact that he is or was a
Director, Officer, employee, or agent of the Company, or is or was serving at
the request of the Company as a Director, Trustee, Officer, employee, or agent
of any other corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, decrees,
penalties, amounts paid with the written consent of the Company upon a plea of
nolo contendere, and amounts paid in settlement, which are actually imposed upon
or reasonably incurred by him in connection with such action, suit, or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, if he had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, or conviction, or upon a plea of nolo contendere,
or its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
action or proceeding, that he had reasonable cause to believe that his conduct
was unlawful.

SECTION 2.                 ACTIONS BY THE COMPANY AND DERIVATIVE ACTIONS.

                  Upon the submission of a reasonably timely written request for
indemnification setting forth the facts of and reason for such request, the
Company shall indemnify any person who was or is a party, or is threatened to be
made a party to any threatened, pending or completed action or suit brought by
or in the right of the Company to procure a judgment in the Company's favor, if
his involvement in such action or suit arises by reason of the fact that he is
or was a Director, Officer, employee or agent of the Company, or is or was
serving at the request of the Company as a Director, Trustee, Officer, employee,
or agent of any other

                                      -13-

<PAGE>   14



corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company, except that no indemnification shall be made in
respect of (a) any claim, issue or matter as to which such person is adjudged to
be liable for negligence or misconduct in the performance of his duties to the
Company, unless and only to the extent that the Court of Common Pleas, or the
Court in which such action or suit was brought, determines upon application
that, despite the adjudication of liability for negligence or misconduct, but in
view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the Court of Common Pleas
or such other Court shall deem proper, or (b) any action or suit in which the
only liability asserted against a Director is pursuant to Section 1701.95 of the
Ohio Revised Code.

SECTION 3.                 MERITORIOUS OR OTHERWISE SUCCESSFUL DEFENSES.

                  Notwithstanding the standards of conduct established in
Sections 1 and 2 of this Article VI, to the extent that a Director, Trustee,
Officer, employee, or agent has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in Sections 1 and 2 of
this Article VI, or in defense of any claim, issue, or matter therein, he shall
be indemnified against expenses (including attorneys' fees), actually and
reasonably incurred by him in connection with the action, suit or proceeding.

SECTION 4.                 APPLICATION OF STANDARDS OF CONDUCT.

                  Any indemnification under Sections 1 or 2 of this Article VI,
unless ordered by a Court, shall be made by the Company only as authorized in
the specific case upon a determination that indemnification of the Director,
Trustee, Officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 or 2 of this
Article VI. Such determination shall be made as follows: (a) by a majority vote
of a quorum consisting of Directors of the Company who were not and are not
parties to or threatened with any such action, suit or proceeding, or (b) if
such a quorum is not obtainable or if a majority vote of a quorum of
disinterested Directors so directs, in a written opinion by independent legal
counsel other than an attorney or a firm having associated with it an attorney
who has been retained by or who has performed services for the Company or any
person to be indemnified within the past five years, or (c) by the shareholders,
or (d) by the Court of Common Pleas or the Court in which such action, suit, or
proceeding was brought. Any determination made by the disinterested Directors or
by independent legal counsel under this Section 4 shall be promptly communicated
to any person who threatened or brought an

                                      -14-

<PAGE>   15



action or suit by or in the right of the Company under Section 2 of this Article
VI.

SECTION 5.                 ADVANCE OF EXPENSES.

                           In the case of an action, suit or proceeding
involving a Director, unless the only liability asserted against such Director
in a proceeding referred to in Sections 1 or 2 of this Article VI is pursuant to
Section 1701.95 of the Ohio Revised Code, the Company shall pay expenses
(including attorneys' fees) incurred by a Director in defending such action,
suit or proceeding as they are incurred in advance of the final disposition of
such action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the Director in which such Director agrees to both (a) repay such amount if
it is proven by clear and convincing evidence in a Court of competent
jurisdiction that his action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the Company or undertaken
with reckless disregard to the best interests of the Company, and (b) reasonably
cooperate with the Company concerning the action, suit or proceeding.

                  Expenses (including attorneys' fees) incurred by a Director,
Trustee, Officer, employee, or agent in defending any action, suit or proceeding
referred to in Sections 1 or 2 of this Article VI shall be paid by the Company
as they are incurred, in advance of the final disposition of the action, suit or
proceeding as authorized by the Directors in the specific case upon receipt of
an undertaking by or on behalf of the Director, Trustee, Officer, employee or
agent to repay such amount, if it is determined that such person is not entitled
to be indemnified by the Company.

SECTION 6.                 OTHER REMEDIES.

                  The indemnification authorized by this Article VI shall not be
exclusive of, and shall be in addition to, any other rights granted to those
seeking indemnification under the Company's Amended Articles of Incorporation,
other provisions of these Regulations, any agreement, any insurance purchased by
the Company, any vote of the Company's shareholders or disinterested Directors,
or otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, Trustee, Officer, employee or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person. The Company, through appropriate action by its Officers, Directors
and/or shareholders, is hereby specifically authorized to take any and all
further action to effectuate any indemnification of any person which any Ohio
corporation may have power to take.


                                      -15-

<PAGE>   16



SECTION 7.                 INSURANCE.

                  In the discretion of the Board of Directors, the Company may
purchase and maintain insurance or furnish similar protection, including but not
limited to trust funds, letters of credit, or self-insurance, on behalf of or
for any person who is or was a Director, Officer, employee, or agent of the
Company, or is or was serving at the request of the Company as a Director,
Trustee, Officer, employee, or agent of another corporation, domestic or
foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the Company
otherwise would have the power to indemnify him against such liability.
Insurance may be purchased from or maintained with a person in which the Company
has a financial interest.

SECTION 8.                 SCOPE OF AUTHORITY.

                  The Company's authority to indemnify persons pursuant to
Sections 1 or 2 of this Article VI does not limit the payment of expenses as
they are incurred, indemnification, insurance or other protection that may be
provided pursuant to Sections 5, 6 or 7 of this Article; Sections 1 and 2 of
this Article VI do not create any obligation to repay or return payments made by
the Company pursuant to Sections 5, 6 or 7 of this Article VI.

SECTION 9.                 LIMITATION OF LIABILITY.

                  (a) No person shall be found to have violated his duties to
the Company as a Director of the Company in any action brought against such
Director (including actions involving or affecting any of the following: (i) a
change or potential change in control of the Company; (ii) a termination or
potential termination of his service to the Company as a Director; (iii) his
service in any other position or relationship with the Company), unless it is
proved by clear and convincing evidence that the Director has not acted in good
faith, in a manner he reasonably believes to be in or not opposed to the best
interests of the Company, or with the care that an ordinarily prudent person in
a like position would use under similar circumstances. Notwithstanding the
foregoing, nothing contained in this subsection (a) limits relief available
under Section 1701.60 of the Ohio Revised Code.

                  (b) In performing his duties, a Director shall be entitled to
rely on information, opinions, reports or statements, including financial
statements and other financial data, that are prepared or presented by: (i) one
or more Directors, officers or employees of the Company whom the Director
reasonably believes are reliable and competent in the matters prepared or
presented; (ii) counsel, public accountants, or other persons as to matters that
the Director reasonably believes are within the person's professional or expert
competence; or (iii) a committee of the

                                      -16-

<PAGE>   17



Directors upon which he does not serve, duly established in accordance with the
provisions of these Amended Code of Regulations, as to matters within its
designated authority, which committee the Director reasonably believes to merit
confidence.

                  (c) A Director in determining what he reasonably believes to
be in the best interests of the Company shall consider the interests of the
Company's shareholders and, in his discretion, may consider (i) the interests of
the Company's employees, suppliers, creditors and customers; (ii) the economy of
the state and nation; (iii) community and societal considerations; and (iv) the
long-term as well as short-term interests of the Company and its shareholders,
including the possibility that these interests may be best served by the
continued independence of the Company.

                  (d) A Director shall be liable in damages for any action he
takes or fails to take as a Director only if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his action or
failure to act involved an act or omission undertaken with deliberate intent to
cause injury to the Company or undertaken with reckless disregard for the best
interests of the Company. Notwithstanding the foregoing, nothing contained in
this subsection (d) affects the liability of Directors under Section 1701.95 of
the Ohio Revised Code or limits relief available under Section 1701.60 of the
Ohio Revised Code.

SECTION 10.                DEFINITIONS.

                  As used in this Article VI, references to "Company" shall
include the new or surviving corporation in a consolidation or merger and any
constituent corporation absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its Directors, Trustees, Officers, employees or agents, so that any
person who is or was a Director, Officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a Director, Trustee, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article VI with respect to the new or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued; provided, however, that the
Board of Directors of the new or surviving corporation may, in its sole
discretion, authorize the new or surviving corporation to indemnify any
Director, Trustee, Officer, employee or agent of such constituent corporation to
the same extent otherwise permitted by Sections 1 through 9 of this Article VI.



                                      -17-

<PAGE>   18



                                   ARTICLE VII

                                   FISCAL YEAR

                  The fiscal year of the Company shall end on May 31 of each
year and shall remain as herein fixed until changed by resolution of the Board
of Directors from time to time.


                                  ARTICLE VIII

                                      SEAL

                  The corporate seal of this Company shall be in circular form
and shall contain the name of the Company. Failure to affix the corporate seal
to any instrument executed on behalf of the Company shall not affect the
validity of such instrument.


                                   ARTICLE IX

               CONSISTENCY WITH AMENDED ARTICLES OF INCORPORATION

                  If any provision of these Regulations shall be inconsistent
with the Company's Amended Articles of Incorporation (and as they may be amended
from time to time), such Amended Articles (as so amended at the time) shall
govern.


                                    ARTICLE X

                              EMERGENCY REGULATIONS

                  The Directors may adopt, either before or during an emergency,
as that term is defined by the General Corporation Law of Ohio, any emergency
regulations permitted by the General Corporation Law of Ohio which shall be
operative only during such an emergency. In the event the Board of Directors
does not adopt any such emergency regulations, the special rules provided in the
General Corporation Law of Ohio shall be applicable during an emergency as
therein defined.


                                   ARTICLE XI

                                   AMENDMENTS

                  Except as set forth in the immediately succeeding sentence,
this Amended Code of Regulations of the Company may be amended or new
regulations may be adopted by the shareholders at a meeting held for such
purpose by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the Company on such proposal, or
without a meeting

                                      -18-

<PAGE>   19


by the written consent of holders of shares entitling them to exercise
two-thirds of the voting power on such proposal; provided, however, that if an
amendment is or new regulations are adopted by written consent, the Secretary
shall enter the amendment or new regulations, as the case may be, in the records
of the Company, and mail a copy thereof to each shareholder of record who would
have been entitled to vote thereon and did not participate in the adoption
thereof. Any amendment or any new regulation which repeals, alters or in any way
modifies or affects the provisions of Article II relating to the number,
classification and election of Directors, their respective terms of office, or
the provisions of this sentence, shall require for adoption at a meeting held
for such purpose the affirmative vote of the holders of shares entitling them to
exercise 80% of the voting power of the Company on such proposal.

                  This Amended Code of Regulations is effective as of the date
of adoption by the Company and supersedes all Regulations and amendments thereto
heretofore adopted.



                                      -19-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4.1
<SEQUENCE>4
<FILENAME>l89965aex4-4_1.txt
<DESCRIPTION>EXHIBIT 4.4.1
<TEXT>
<PAGE>   1
                                                                  Exhibit 4.4.1

                                  AMENDMENT TO
                                RIGHTS AGREEMENT

         This Amendment to Rights Agreement (this "Amendment"), is made as of
this 18th day of December, 2000, among RPM, Inc., an Ohio corporation ("RPM"),
Computershare Investor Services ("CIS") and National City Bank, a national
banking association ("NCB").

                                   WITNESSETH:
                                   ----------

         WHEREAS, RPM and Harris Trust and Savings Bank ("Harris Trust") entered
into that certain Rights Agreement, dated as of April 28, 1999, (the "Rights
Agreement"), pursuant to which Harris Trust was to serve as Rights Agent; and

         WHEREAS, CIS, as the successor to Harris Trust's corporate trust
business, serves as the Rights Agent under the Rights Agreement; and

         WHEREAS, as of December 18, 2000, RPM has appointed NCB to serve as
Rights Agent under the Rights Agreement in place of CIS;

         NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, RPM, CIS and NCB do hereby agree as
follows:

1.       DEFINED TERMS.

         Each capitalized term used herein and not otherwise defined herein
shall have the meaning ascribed to such term in the Rights Agreement.

2.       AMENDMENTS TO THE RIGHTS AGREEMENT.

         (a) The Rights Agreement shall be amended, effective as of the date
hereof, by changing all references to Harris Trust contained therein to NCB.

         (b) Section 25 of the Rights Agreement shall be amended by changing the
address to which any notice to the Rights Agent should be directed to the
following:

                          National City Bank
                          Corporate Trust Administration
                          P.O. Box 94915
                          Cleveland, Ohio  44101-4915
                          Attention:  David B. Davis

3.       CIS WAIVER OF NOTICE PERIOD

         By executing this Amendment, CIS hereby waives the requirement that RPM
provide it with 30 days' written notice upon removal as Rights Agent pursuant to
Section 21 of the Rights Agreement.



<PAGE>   2

4.       NO OTHER AMENDMENTS.

         The other terms and provisions of the Rights Agreement shall remain in
full force and effect without change.

5.       COUNTERPARTS.

         This Amendment may be executed in one or more counterparts, each of
which, when taken together, shall constitute but one and the same agreement.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to Rights Agreement to be duly executed and delivered by their
respective duly authorized officers as of the date first above written.

                                       RPM, INC.



                                       /s/ P. Kelly Tompkins
                                       -----------------------------------------
                                       Name:  P. Kelly Tompkins
                                       Title: Vice President, General Counsel
                                              and Secretary


                                       COMPUTERSHARE INVESTOR SERVICES



                                       /s/ Michael J. Lang
                                       -----------------------------------------
                                       Name:  Michael J. Lang
                                       Title: Vice President


                                       NATIONAL CITY BANK



                                       /s/ David B. Davis
                                       -----------------------------------------
                                       Name: David B. Davis
                                       Title: Vice President



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>l89965aex10-4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<PAGE>   1
                                                                 EXHIBIT 10.4

                                  RPM, INC.

                            1989 STOCK OPTION PLAN


         1.       Purpose of the Plan

         The Plan is intended to provide a method of providing key employees of
RPM, Inc. (the "Company") and its subsidiaries with greater incentive to serve
and promote the interests of the Company and its shareholders. The premise of
the Plan is that, if such key employees acquire a proprietary interest in the
business of the Company or increase such proprietary interest as they may
already hold, then the incentive of such key employees to work toward the
Company's continued success will be commensurately increased. Accordingly, the
Company will, from time to time during the effective period of the Plan, grant
to such employees as may be selected to participate in the Plan options to
purchase Common Shares, without par value ("Shares"), of the Company on the
terms and subject to the conditions set forth in the Plan.

         2.       Administration of the Plan

         The Plan shall be administered by the Compensation Committee of the
Board of Directors or by such other Committee composed of no fewer than three
(3) disinterested members of the Board of Directors of the Company as may be
designated by the Board of Directors (the "Committee"), provided that the
Committee shall not include any person who has been eligible to receive options
under the Plan or under any other plan of the Company entitling the participants
therein to acquire Shares, options to purchase Shares, or stock appreciation
rights of the Company at any time within the twelve (12) month period
immediately preceding the date on which such person becomes a member of the
Committee. A majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all of the members, shall be the acts of
the Committee.

         Subject to the provisions of the Plan, the Committee shall have full
and final authority, in its absolute discretion, (a) to determine the employees
to be granted options under the Plan, (b) to determine the number of Shares
subject to each option, (c) to determine the time or times at which options will
be granted, (d) to determine the option price of the Shares subject to each
option, which price shall not be less than the minimum specified in Section 6 of
the Plan, (e) to determine the time or times when each option becomes
exercisable and the duration of the exercise period, (f) to determine the terms
and conditions under which the Committee shall accept the surrender of an option
or any portion thereof pursuant to Section 9 of the Plan and to determine the
form in which payment for such surrendered option or portion thereof shall be
made, (g) to prescribe the form or forms of the agreements evidencing any
options granted under the Plan (which forms shall be consistent with the Plan),
(h) to adopt, amend and rescind such rules and


<PAGE>   2



regulations as, in the Committee's opinion, may be advisable in the
administration of the Plan, and (i) to construe and interpret the Plan, the
rules and regulations and the agreements evidencing options granted under the
Plan and to make all other determinations deemed necessary or advisable for the
administration of the Plan. Any decision made or action taken in good faith by
the Committee in connection with the administration, interpretation, and
implementation of the Plan and of its rules and regulations, shall, to the
extent permitted by law, be conclusive and binding upon all optionees under the
Plan and upon any person claiming under or through such an optionee, and no
member of the Board of Directors shall be liable for any such decision made or
action taken by the Committee.

         3.       Shares Available for Options

         Subject to the provisions of Section 10 of the Plan, the aggregate
number of Shares for which options may be granted under the Plan shall not
exceed one million five hundred thousand (1,500,000).

         The Shares to be delivered under exercise of options under the Plan
shall be made available, at the discretion of the Board of Directors, either
from the authorized but unissued Shares of the Company or from Shares held by
the Company as treasury shares, including Shares purchased in the open market.

         If an option granted under the Plan shall expire or terminate
unexercised as to any Shares covered thereby, such Shares shall thereafter be
available for the granting of other options under the Plan. If, however, an
option granted under the Plan shall be accepted for surrender pursuant to terms
and conditions determined by the Committee under Section 9, any Shares covered
thereby shall not thereafter be available for the granting of other options
under the Plan.

         Options granted under the Plan shall constitute either incentive stock
options, as defined in Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), hereinafter referred to as "incentive stock options", or
non-qualified stock options as the Committee shall determine with respect to
each option granted on or after such date.

         4.       Eligibility

         Option will be granted only to persons who are employees of the Company
or of a subsidiary of the Company. The term "subsidiary" as used herein shall
mean any corporation, a majority of the stock of which having normal voting
rights is owned directly or indirectly by the Company. The term "employees"
shall include officers as well as all other employees of the Company and its
subsidiaries and shall include Directors who are also employees of the Company
or of a subsidiary of the Company. Neither the members

                                        2

<PAGE>   3



of the Committee nor any other member of the Board of Directors who is not an
employee of the Company (or of a subsidiary of the Company) shall be eligible to
receive an option under the Plan. Each grant of an option shall be evidenced by
an agreement executed on behalf of the Company by the Chairman of the Board or
another executive officer and delivered to and accepted by the optionee.

         In selecting the persons to whom options shall be granted under the
Plan, as well as in determining the number of Shares subject to and the type and
terms and provisions of each option, the Committee shall weigh such factors as
it shall deem relevant to accomplish the purpose of the Plan, namely, to enhance
the incentive of those key employees of the Company and its subsidiaries who
exert authority over and are responsible for the management and conduct of the
Company's business. A person who has been granted an option under the Plan may
be granted an additional option or options if the Committee shall so determine.

         5.       Term of Options

         The full term of each option granted under the Plan shall be such
period as the Committee shall determine, but shall not be more than ten (10)
years from the date of granting thereof; provided, however, that if an employee
to whom an incentive stock option is granted is at the time of grant of the
incentive stock option an owner as defined in Section 425(d) of the Code of more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any subsidiary corporation, hereinafter referred to as a
"Substantial Shareholder," no incentive stock option granted to such an employee
shall be exercisable after the expiration of five (5) years from the date of
grant of such option.

         Each option shall be subject to earlier termination as provided in
Paragraphs (c) and (d) of Section 8 and in Section 9 of the Plan.

         The Committee may, with the concurrence of the affected optionee,
cancel any option granted under the Plan and authorize the grant of a new option
or options to buy Shares in such number and at such price as the Committee shall
determine, subject to the provisions of the Plan.

         6.       Option Price

         The option price shall be determined by the Committee at the time any
option is granted but shall not be less than 100 per cent of the fair market
value of the Shares covered thereby at the time the option is granted, such fair
market value to be determined in accordance with procedures to be established by
the Committee; provided, however, that if an employee to whom an incentive stock
option is granted is at the time of the grant of the incentive stock option a
Substantial Shareholder, the option price shall be determined by the Committee
from time to time but shall never be

                                        3

<PAGE>   4



less than 110 percent of the fair market value of the Company's Shares on the
date such option is granted.

         7.       Non-transferability of Option

         No option granted under the Plan shall be transferable by the optionee
otherwise than by will or the laws of descent and distribution, and such option
may be exercised during the optionee's lifetime only by the optionee or by his
guardian or legal representative.

         8.       Exercise of Options

         (a) Each option granted under the Plan shall be exercisable on such
date or dates and during such period and for such number of Shares as shall be
set forth in the agreement evidencing such option.

         (b) A person electing to exercise an option shall give written notice
to the Company of such election and the number of Shares such person has elected
to purchase and shall, at the time of exercise, tender the full purchase price
of the Shares such person has elected to purchase. The purchase price may be
paid either in cash or in the Company's Shares (excluding fractional shares), or
a combination thereof; provided, however, that the practice known as
"Pyramiding", which involves successive option exercises using Shares received
from a preceding exercise to immediately exercise another option and so on,
shall not be permitted. Shares delivered in payment of the purchase price shall
be valued at the fair market value of such Shares on the date of exercise of the
option. Until such person has been issued a certificate or certificates for the
Shares so purchased, such person shall possess no rights of a record holder with
respect to any such Shares.

         (c) No option shall be affected by any change of duties or position of
the optionee (including transfer to or from a subsidiary), so long as such
optionee continues to be an employee of the Company or one of its subsidiaries.
If an optionee shall cease to be an employee for any reason other than death,
the options held by such optionee shall thereafter be exercisable only to the
extent of the purchase rights, if any, which had accrued as of the date of such
cessation, provided that the Committee may provide in the agreement evidencing
any option that the Committee may in its absolute discretion, upon any such
cessation of employment, determine (but shall be under no obligation to
determine) that such accrued purchase rights shall be deemed to include
additional Shares covered by such option. Upon any such cessation of employment,
such accrued rights to purchase shall in any event terminate upon the earlier of
(A) the expiration of the full term of the option or (B) the expiration of
thirty (30) days from the date of such cessation of employment if by reason of
discharge or immediately if by reason of voluntary quit. The

                                        4

<PAGE>   5



agreements evidencing options granted under the Plan may contain such provisions
as the Committee shall approve with reference to the effect of approved leaves
of absence. Nothing in the Plan or in any option granted hereunder shall confer
upon any optionee any right to continue in the employ of the Company or any of
its subsidiaries, or to limit or interfere in any way with the right of the
Company or its subsidiaries to terminate such optionee's employment at any time,
with or without cause.

         (d) Should an optionee die while in the employ of the Company or one of
its subsidiaries or within thirty (30) days after cessation of such employment
by reason of discharge, such person as shall have acquired, by will or by the
laws of descent and distribution (the "personal representative"), the right to
exercise any option theretofore granted such optionee may, in either case,
exercise such option at any time prior to expiration of its full term or one (1)
year from the date of death of the optionee, whichever is earlier, provided that
any such exercise shall be limited to the purchase rights which had accrued as
of the date when the optionee ceased to be an employee, whether by death or
otherwise, and provided further, however, that the Committee may provide in the
agreement evidencing any option that all Shares covered by such option shall
become subject to purchase immediately upon the death of the optionee.

         (e) In the case of incentive stock options, the aggregate fair market
value (determined as of the date the option is granted) of the Shares with
respect to which options are exercisable for the first time by any individual
during any calendar year (under this Plan and all such plans of the Company and
any parent or subsidiary corporation) shall not exceed $100,000.

         9.       Surrender of Options - Stock Appreciation Rights

         The Committee may, in its absolute discretion and under such terms and
conditions as it deems appropriate, accept the surrender by an optionee, or the
personal representative of an optionee, of an option, or any portion thereof, to
purchase Shares granted under the Plan and authorize the payment in
consideration for such surrender of an amount equal to the excess of the fair
market value at the date of surrender of the Shares covered by the option, or
portion thereof, surrendered over the aggregate option price of such Shares,
such payment to be in Shares (valued at fair market value on the date of such
surrender) or in cash, or partly in Shares and partly in cash as determined by
the Committee, provided that the Committee determines that such surrender is
consistent with the purpose set forth in Section 1 hereof.

         10.      Adjustment Upon Changes in Capitalization

         In the event of any change in the number of outstanding Shares through
the declaration of share dividends, share splits, or consolidations, through
recapitalizations, or by reason of any

                                        5

<PAGE>   6


other increase or decrease in the number of outstanding Shares effected without
receipt of consideration by the Company, the number of Shares available and
reserved for options which may thereafter be granted, the number of Shares
reserved for and subject to any options outstanding but unexercised, and the
price per share payable on the exercise of any options outstanding but
unexercised, shall be adjusted as the Committee considers appropriate, and all
such adjustments by the Committee shall be conclusive and binding upon all
optionees under the Plan and upon any person claiming under or through such an
optionee.

         11.      Issuance of Substitute Options

         The Committee may also make a determination, subject to approval and
authorization by the Board of Directors, to issue options having terms and
provisions which vary from those specified herein, provided that any options
issued pursuant to this Section are issued in substitution for, or in connection
with the assumption of, existing options issued by another corporation and
assumed or otherwise agreed to be provided for by the Company pursuant to or by
reason of a transaction involving a corporate merger, consolidation, acquisition
of property or stock, separation, reorganization or liquidation in which the
Company or a subsidiary is a party.

         12.      Amendment, Suspension or Termination of Plan

         The Board of Directors may at any time terminate or from time to time
amend or suspend the Plan; provided, however, that no such amendment shall,
without approval of the shareholders of the Company, except as provided in
Section 10 hereof, (a) increase the aggregate number of Shares as to which
options may be granted under the Plan; (b) change the minimum option exercise
price; (c) increase the maximum period during which options may be exercised;
(d) extend the effective period of this Plan; or (e) permit the granting of
options to members of the Committee. No option may be granted during any
suspension of the Plan or after the Plan has been terminated and no amendment,
suspension or termination shall, without the optionee's consent, alter or impair
any of the rights or obligations under any option theretofore granted to such
person under the Plan.

         13.      Effective Date and Duration of Plan

         This Plan shall become effective upon its approval by the affirmative
vote of the holders of a majority of the outstanding Shares present in person or
by proxy and entitled to vote on this Plan at the Annual Meeting of the
Shareholders of the Company on October 20, 1989, or any adjournment thereof. No
options may be granted under this Plan subsequent to October 19, 1999.



                                        6
<PAGE>   7


                                 AMENDMENT NO. 1
                                       TO
                                    RPM, INC.
                             1989 STOCK OPTION PLAN


                  This Amendment No. 1 is made this 19th day of July, 1991
by the Board of Directors of RPM, Inc. (hereinafter referred to as
the "Company");

                                   WITNESSETH:
                                   -----------

                  WHEREAS, the RPM, Inc. 1989 Stock Option Plan (hereinafter
referred to as the "Plan") was established effective October 20, 1989 to provide
officers and other key employees of the Company with greater incentive to serve
and promote the interests of the Company and its shareholders; and

                  WHEREAS, the Board of Directors is empowered under
Section 12 of the Plan to amend and modify the Plan; and

                  WHEREAS, it is the desire of the Board of Directors of the
Company to amend certain provisions of the Plan to conform with the amended
provisions of Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended, by the Securities and Exchange Commission (the "Commission") and
effective May 1, 1991;

                  WHEREAS, the Commission has indicated that such conforming
amendments are not required to be submitted to the shareholders of a company for
authorization and approval;

                  NOW, THEREFORE, pursuant to Section 12 of the Plan, the Board
of Directors of the Company hereby amends the Plan, effective July 19, 1991, as
follows:


<PAGE>   8



                  (1) Section 2 of the Plan is hereby amended by the deletion of
the first paragraph of said Section and the substitution in lieu thereof of a
new first paragraph to read as follows:

                  "The Plan shall be administered by the Compensation Committee
                  of the Board of Directors or by such other Committee composed
                  of no fewer than two (2) disinterested members of the Board of
                  Directors of the Company as may be designated by the Board of
                  Directors (the "Committee"), provided that the Committee shall
                  not include any person who has been granted or awarded equity
                  securities under the Plan or under any other plan of the
                  Company entitling the participants therein to acquire Shares,
                  options to purchase Shares, or stock appreciation rights of
                  the Company at any time within the twelve (12) month period
                  immediately preceding the date on which such person becomes a
                  member of the Committee. A majority of the Committee shall
                  constitute a quorum, and the acts of a majority of the members
                  present at any meeting at which a quorum is present, or acts
                  approved in writing by all of the members, shall be the acts
                  of the Committee."

                  (2) Section 7 of the Plan is hereby amended by the deletion of
said Section and the substitution in lieu thereof of a new Section to read as
follows:

                  "No option granted under the Plan shall be transferrable by
                  the optionee otherwise than by will or the laws of descent and
                  distribution or pursuant to a qualified domestic relations
                  order as defined by the Code; and such option may be exercised
                  during the optionee's lifetime only by the optionee or by his
                  guardian or legal representative."

                  (3) Section 12 of the Plan is hereby amended by the deletion
of said Section and the substitution in lieu thereof a new Section to read as
follows:

                                       -2-

<PAGE>   9


                  "The Board of Directors may at any time terminate or from time
                  to time amend or suspend the Plan; provided, however, that no
                  such amendment shall, without approval of the shareholders of
                  the Company, except as provided in Section 10 hereof, (a)
                  increase the aggregate number of Shares as to which options
                  may be granted under the Plan; (b) change the minimum option
                  exercise price; (c) increase the maximum period during which
                  options may be exercised; (d) extend the effective period of
                  this Plan; (e) modify the requirements for participation in
                  the Plan; (f) increase the benefits to participants who are
                  officers of the Company; or (g) permit the granting of options
                  to members of the Committee. No option may be granted during
                  any suspension of the Plan or after the Plan has been
                  terminated and no amendment, suspension or termination shall,
                  without the optionee's consent, alter or impair any of the
                  rights or obligations under any option theretofore granted to
                  such person under the Plan."



                                           RPM, INC.
                                           BOARD OF DIRECTORS



                                         By /s/ Thomas C. Sullivan
                                            _______________________________
                                                Thomas C. Sullivan
                                                         Chairman






                                       -3-

<PAGE>   10



                                                                         ISO NO.


                        INCENTIVE STOCK OPTION AGREEMENT
                        --------------------------------


                THIS AGREEMENT, entered into this ______ day of _______, 19__ by
and between RPM, Inc., an Ohio corporation (the "Company"), and ((1)) (the
"Optionee").

                              W I T N E S S E T H:
                              --------------------

                WHEREAS, the Board bf Directors of the Company has designated
the Compensation Committee of the Board of Directors (the "Committee") to serve
as the Committee to administer the RPM, Inc. 1989 Stock Option Plan (the
"Plan"), and

                WHEREAS, the Committee has determined that the Optionee, as an
employee of the Company or of one of its subsidiaries (an "Employee"), should be
granted an incentive stock option under the Plan upon the terms and subject to
the conditions and covering the number of Common Shares, without par value
("Shares"), of the Company, set forth hereinafter:

                NOW, THEREFORE, the Company and the Optionee hereby agree as
follows:

         1. Effective as of the date of this Agreement, the Company grants to
the Optionee, upon the terms and subject to the conditions set forth
hereinafter, the right and option to purchase all or any part of an aggregate of
((2)) __________ (__) Shares (such right and option being hereinafter referred
to as the "Option"), at a price of $____ per share (the "Option Price").

         2. The term of the option shall be for a period of ten (10) years from
the date hereof, and the Option shall expire at the close of regular business
hours at the Company's principal office, Medina, Ohio, on the last day of the
term of the Option, or, if earlier, on the applicable expiration date provided
for in paragraphs 4 and 5 hereof.

         3. Except as provided in paragraph 7 hereof, the Option shall not be
exercisable to any extent until one (1) year from the date hereof. The Optionee
shall become entitled to exercise the Option with respect to the number of
Shares indicated below as of the date indicated opposite such number below:

          Number of Shares        Date as of Which
          as to Which Option        Option May be
          May be Exercised            Exercised
          ----------------            ---------



<PAGE>   11

To the extent that the Option has become exercisable with respect to a number of
Shares, as provided above, the Option may thereafter be exercised by the
Optionee either as to all or any part of such Shares at any time or from time to
time prior to expiration of the Option pursuant to paragraph 2 hereof. Except as
provided in paragraphs 4 and 5 hereof, the Option may not be exercised at any
time unless the Optionee shall be an Employee at such time.

        4. So long as the Optionee shall continue to be an Employee, the Option
shall not be affected by (a) any temporary leave of absence approved in writing
by the Company or one of its subsidiaries, or (b) any change of duties or
position (including transfer to or from a subsidiary). If the Optionee ceases to
be an Employee for any reason other than death, the Option may be exercised only
to the extent of the purchase rights, if any, which had accrued as of the date
of such cessation pursuant to paragraph 3 hereof and which have not theretofore
been exercised; provided, however, that upon written request to the Committee it
may in its absolute discretion determine (but shall be under no obligation to
determine) that such accrued purchase rights shall be deemed to include
additional Shares covered by the Option. Upon any such cessation of employment
by reason of discharge, such accrued purchase rights shall in any event
terminate upon the earlier of the date thirty (30) days from the date of such
cessation of employment or the last day of the term of the Option. Upon any such
cessation of employment by reason of a voluntary quit, such accrued purchase
rights shall terminate on the date of such cessation of employment. Nothing
contained in this Agreement shall confer upon the Optionee any right to continue
in the employ of the Company or any of its subsidiaries, or to limit or
interfere in any way with the right of the Company or any such subsidiary to
terminate his or her employment at any time, with or without cause.

        5. If the Optionee dies while an Employee or within thirty (30) days of
the Optionee's having ceased to be an Employee by reason of discharge, such
person or persons as shall have acquired, by will or by the laws of descent and
distribution, the right to exercise the Option (the "Personal Representative")
may exercise the Option to the extent of the purchase rights, if any, which had
accrued as of the date of the Optionee's death pursuant to paragraph 3 hereof
and which have not theretofore been exercised; provided, however, that upon
written request to the Committee it may in its absolute discretion determine
(but shall be under no obligation to determine) that such accrued purchase
rights shall be deemed to include additional Shares covered by the Option. Such
accrued purchase rights shall in any event terminate upon the earlier of the
date one (1) year from the date of the Optionee's death or the last day of the
term of the Option.

        6. Notwithstanding the foregoing, this Option is exercisable only to the
extent that the aggregate fair market value (determined at the time such Option
is granted) of the shares with respect to which such Options first become
exercisable during any calendar year does not exceed $100,000.

        7. Upon the commencement of a "tender offer" for the Company's Common
Shares as provided under Rule 14d-2 promulgated under the Federal Securities
Exchange

                                       2
<PAGE>   12

Act of 1934, as amended, or any subsequent comparable Federal rule or
regulation governing tender offers, or upon the occurrence of a "Control Share
Acquisition" of the Company's Common Shares as defined under Section 1701.01(Z),
Ohio Revised Code, or any subsequent comparable statutes under the laws of the
State of Ohio, whichever first occurs, or within the thirty (30) day period
ending on the date designated by the Board for dissolution or liquidation of the
Company or a merger or consolidation in which the Company is not to be the
surviving corporation, the Optionee shall have the immediate right and option
(notwithstanding the provisions of Section 3 hereof) to exercise the Option with
respect to all Shares covered by the Option, and any such exercise shall be
irrevocable. The Optionee shall be entitled to exercise the Option as provided
in the immediately preceding sentence regardless of whether the "tender offer"
or "control share acquisition" is successful and regardless of whether the other
corporation which is the surviving corporation in a merger or consolidation
shall adopt and maintain the RPM, Inc. 1989 Stock Option Plan.

                8. The Option may be exercised by delivery to the Secretary of
the Company at its principal office, 2628 Pearl Road, P.O. Box 777, Medina, Ohio
44258, of a completed Notice of Exercise of Option (obtainable from the
Secretary of the Company) setting forth the number of Shares with respect to
which the Option is being exercised, together with either a certified or
cashier's check payable to the Company or certificates for RPM, Inc. Common
Shares, properly endorsed for transfer, or a combination thereof, in the amount
of the total purchase price of such Shares.

                9. Upon receipt by the Company prior to expiration of the Option
of a duly completed Notice of Exercise of Option accompanied by a certified or
cashier's check, or properly endorsed certificates for RPM Common Shares, as
provided in paragraph 8 hereof, in full payment for the Shares being purchased
pursuant to such Notice (and, with respect to any Option exercised pursuant to
paragraph 5 hereof by the Personal Representative, accompanied in addition by
proof satisfactory to the Committee of the right of the Personal Representative
to exercise the Option), the Company shall cause to be mailed or otherwise
delivered to the Optionee or the Personal Representative, as the case may be,
within thirty (30) days of such receipt, a certificate or certificates for the
number of Shares so purchased. The Optionee or the Personal Representative shall
not have any of the rights of a shareholder with respect to the Shares covered
by the Option unless and until one or more certificates representing such Shares
shall be issued to the Optionee or the Personal Representative.

                10. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and the heirs, estate and
personal representatives of the Optionee. The Option shall not be transferable
other than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code, and the Option may be
exercised during the lifetime of the Optionee only by the Optionee or by his
guardian or legal representative.

                11. This Agreement is subject to all of the terms, conditions,
and provisions of the RPM, Inc. 1989 Stock Option Plan, as amended from time to
time, and to such rules,

                                       3
<PAGE>   13

regulations, and interpretations of the Plan as may be adopted by the Committee
and in effect from time to time. A copy of the Plan is attached hereto as
Exhibit "A" and is incorporated herein by reference. In the event and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions, and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly.

                                       4
<PAGE>   14



                WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behlaf by its undersigned executive officer thereunto duly
authorized, and the Optionee has hereunto set his hand, ass as of the day and
year first above written.


                                   RPM, INC

                                   By_______________________________
                                     Thomas C. Sullivan, Chairman

                                             ("Company")
                                     _______________________________

                                       5
<PAGE>   15

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                      ------------------------------------


                THIS AGREEMENT, entered into this ___ day of __________, 19 , by
and between RPM, Inc., an Ohio corporation (the "Company"), and
___________________________________ (the "Optionee").

                              W I T N E S S E T H:
                              --------------------

                WHEREAS, the Board of Directors of the Company has designated
the Compensation Committee of the Board of Directors (the "Committee") to serve
as the Committee to administer the RPM, Inc. 1989 Stock Option Plan (the
"Plan"), and

                WHEREAS, the Committee has determined that the Optionee, as an
employee of the Company or of one of its subsidiaries (an "Employee"), should be
granted a non-qualified stock option under the Plan upon the terms and subject
to the conditions and covering the number of Common Shares, without par value
("Shares"), of the Company, set forth hereinafter:

                NOW, THEREFORE, the Company and the Optionee hereby agree as
follows:

                1. Effective as of the date of this Agreement, the Company
grants to the Optionee, upon the terms and subject to the conditions set forth
hereinafter, the right and option to purchase all or any part of an aggregate of
_________________________ ( ) Shares (such right and option being hereinafter
referred to as the "Option"), at a price of $___________ per share (the "Option
Price").

                2. The term of the option shall be for a period of ten (10)
years from the date hereof, and the Option shall expire at the close of regular
business hours at the Company's principal office, Medina, Ohio, on the last day
of the term of the Option, or, if earlier, on the applicable expiration date
provided for in paragraphs 4 and 5 hereof.

                3. Except as provided in paragraph 6 hereof, the Option shall
not be exercisable to any extent until one (1) year from the date hereof. The
Optionee shall become entitled to exercise the Option with respect to the number
of Shares indicated below as of the date indicated opposite such number below:

          Number of Shares        Date as of Which
          as to Which Option       Option May be
          May be Exercised         Exercised
          ----------------         ---------


<PAGE>   16

To the extent that the Option has become exercisable with respect to a number of
Shares, as provided above, the Option may thereafter be exercised by the
Optionee either as to all or any part of such Shares at any time or from time to
time prior to expiration of the Option pursuant to paragraph 2 hereof. Except as
provided in paragraphs 4 and 5 hereof, the Option may not be exercised at any
time unless the Optionee shall be an Employee at such time.

                4. So long as the Optionee shall continue to be an Employee, the
Option shall not be affected by (a) any temporary leave of absence approved in
writing by the Company or one of its subsidiaries, or (b) any change of duties
or position (including transfer to or from a subsidiary). If the Optionee ceases
to be an Employee for any reason other than death, the Option may be exercised
only to the extent of the purchase rights, if any, which had accrued as of the
date of such cessation pursuant to paragraph 3 hereof and which have not
theretofore been exercised; provided, however, that upon written request to the
Committee it may in its absolute discretion determine (but shall be under no
obligation to determine) that such accrued purchase rights shall be deemed to
include additional Shares covered by the Option. Upon any such cessation of
employment by reason of discharge, such accrued purchase rights shall in any
event terminate upon the earlier of the date thirty (30) days from the date of
such cessation of employment or the last day of the term of the Option. Upon any
such cessation of employment by reason of a voluntary quit, such accrued
purchase rights shall terminate on the date of such cessation of employment.
Nothing contained in this Agreement shall confer upon the Optionee any right to
continue in the employ of the Company or any of its subsidiaries, or to limit or
interfere in any way with the right of the Company or any such subsidiary to
terminate his or her employment at any time, with or without cause.

                5. If the Optionee dies while an Employee or within thirty (30)
days of the Optionee's having ceased to be an Employee by reason of discharge,
such person or persons as shall have acquired, by will or by the laws of descent
and distribution, the right to exercise the Option (the "Personal
Representative") may exercise the Option to the extent of the purchase rights,
if any, which had accrued as of the date of the Optionee's death pursuant to
paragraph 3 hereof and which have not theretofore been exercised; provided,
however, that upon written request to the Committee it may in its absolute
discretion determine (but shall be under no obligation to determine) that such
accrued purchase rights shall be deemed to include additional Shares covered by
the Option. Such accrued purchase rights shall in any event terminate upon the
earlier of the date one (1) year from the date of the Optionee's death or the
last day of the term of the Option.

               6. Upon the commencement of a "tender offer" for the Company's
Common Shares as provided under Rule 14d-2 promulgated under the Federal
Securities Exchange Act of 1934, as amended, or any subsequent comparable
Federal rule or regulation governing tender offers, or upon the occurrence of a
"Control Share Acquisition" of the Company's Common Shares as defined under
Section 7101.01(Z), Ohio Revised Code, or any subsequent comparable statutes
under the

                                       2
<PAGE>   17

laws of the State of Ohio, whichever first occurs, or within the thirty (30) day
period ending on the date designated by the Board for dissolution or liquidation
of the Company or a merger or consolidation in which the Company is not to be
the





















                                       3
<PAGE>   18

surviving corporation, the Optionee shall have the immediate right and option
(notwithstanding the provisions of Section 3 hereof) to exercise the Option with
respect to all Shares covered by the Option, and any such exercise shall be
irrevocable. The Optionee shall be entitled to exercise the Option as provided
in the immediately preceding sentence regardless of whether the "tender offer"
or "control share acquisition" is successful and regardless of whether the other
corporation which is the surviving corporation in a merger or consolidation
shall adopt and maintain the RPM, Inc. 1989 Stock Option Plan.

                7. The Option may be exercised by delivery to the Secretary of
the Company at its principal office, 2628 Pearl Road, P.O. Box 777, Medina, Ohio
44258, of a completed Notice of Exercise of Option (obtainable from the
Secretary of the Company) setting forth the number of Shares with respect to
which the Option is being exercised, together with either a certified or
cashier's check payable to the Company or certificates for RPM, Inc. Common
Shares, properly endorsed for transfer, or a combination thereof, in the amount
of the total purchase price of such Shares.

                8. Upon receipt by the Company prior to expiration of the Option
of a duly completed Notice of Exercise of Option accompanied by a certified or
cashier's check or properly endorsed certificates for RPM Common Shares, as
provided in paragraph 7 hereof, in full payment for the Shares being purchased
pursuant to such Notice (and, with respect to any Option exercised pursuant to
paragraph 5 hereof by the Personal Representative, accompanied in addition by
proof satisfactory to the Committee of the right of the Personal Representative
to exercise the Option), the Company shall cause to be mailed or otherwise
delivered to the Optionee or the Personal Representative, as the case may be,
within thirty (30) days of such receipt, a certificate or certificates for the
number of Shares so purchased. The Optionee or the Personal Representative shall
not have any of the rights of a shareholder with respect to the Shares covered
by the Option unless and until one or more certificates representing such Shares
shall be issued to the Optionee or the Personal Representative.

                9. This Agreement shall be binding upon and inure to the benefit
of any successor or successors of the Company and the heirs, estate and personal
representatives of the Optionee. The Option shall not be transferable other than
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code, and the Option may be exercised
during the lifetime of the Optionee only by the Optionee or by his guardian or
legal representative.

                                       4
<PAGE>   19


                10. This Agreement is subject to all of the terms, conditions,
and provisions of the RPM, Inc. 1989 Stock Option Plan, as amended from time to
time, and to such rules, regulations, and interpretations of the Plan as may be
adopted by the Committee and in effect from time to time. A copy of the Plan is
attached hereto as Exhibit "A" and is incorporated herein by reference. In the
event and to the extent that this Agreement conflicts or is inconsistent with
the terms, conditions, and provisions of the Plan, the Plan shall control, and
this Agreement shall be deemed to be modified accordingly.

                IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its undersigned officer thereunto duly authorized, and
the Optionee has hereunto set his hand, all as of the day and year first above
written.

                                             RPM, INC.

                                             By ____________________________
                                                Thomas C. Sullivan, Chairman

                                                        ("Company")

                                                ____________________________


                                                        ("Optionee")


                                       5

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>6
<FILENAME>l89965aex10-6.txt
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
<PAGE>   1
                                                                    Exhibit 10.6

                   NOTICE/CONFIDENTIAL - COPYRIGHTED MATERIAL
                   ------------------------------------------

                  This document is protected under the copyright laws of the
United States and international copyright treaties, and contains proprietary,
confidential information of Calfee, Halter & Griswold. Any use, duplication,
publication, display, modification, adaptation or dissemination of this document
or its contents requires the express written permission of Calfee, Halter &
Griswold.

                   Copyright, 1991, Calfee, Halter & Griswold
                              All Rights Reserved.

                                    RPM, INC.

                        RETIREMENT SAVINGS TRUST AND PLAN

                               ADOPTION AGREEMENT
                               ------------------

                              (Profit Sharing #001)

                                       For

                            A REGIONAL PROTOTYPE PLAN
                                  SPONSORED BY

                            CALFEE, HALTER & GRISWOLD
                              1800 Society Building
                              Cleveland, Ohio 44114
                                 (216) 622-8200

                  (1) ESTABLISHMENT OF PLAN. RPM, Inc. (the "Company")
hereby adopts the RPM, Inc. Retirement Savings Trust and Plan (the "Trust
and Plan") this 1st day of June, 1992 ("Adoption Date"), by completing this
Adoption Agreement, establishing the retirement savings plan and trust
agreement in the form of the attached prototype plan.*

- --------
     *This Adoption Agreement shall be of no force and effect and Calfee, Halter
& Griswold shall have none of the responsibilities imposed upon a Regional
Prototype Plan Sponsor with respect to the Company, a Participating Company or
any Trust and Plan participants unless and until such time as Calfee, Halter &
Griswold acknowledges receipt of and accepts this Adoption Agreement, in
writing, as set forth on page 28 hereof.


<PAGE>   2



                  (2)      PLAN INFORMATION.
                           ----------------
                           [x]  New Plan

                           [ ]  Amendment and Restatement of:

                                [ ]  Same Plan

                                [ ]  Prototype Plan

                                [ ]  Master Plan

                                [ ]  Other (merger, consolidation, etc.)

                                     If Restatement or Merger, enter names
                                     of predecessor plans:

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

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

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

                  (3)      Plan No.    011

                  (4)      COMPANY INFORMATION.  Company name, address,
telephone number and employer identification number:

                              RPM, Inc.
                              P.O. Box 777
                              Medina, OH  44258
                              (216) 225-3192
                              E.I.N. 34-6550857

                  (5)      CONTROLLED GROUP.  Corporations or other business
organizations related to the Company under Sections 414(b), (c),
(m) and (o) of the Internal Revenue Code (the "Code") are:

                              See Attachment A
                              --------------------------------

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

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


                  (6)      PARTICIPATING COMPANIES.  Participating Companies
under the Trust and Plan are:

                                        2


<PAGE>   3



                           [ ]  All of the members of the Controlled Group
                                under Section (5) above

                           [x]  Other (specify):
<TABLE>
<CAPTION>
                                                         Adoption     Cessation
                                Name                       Date          Date
                                ----                     --------     ---------
                                <S>                       <C>         <C>
                                See Attachment B          _________   _________
                                ______________________    _________   _________
                                ______________________    _________   _________
</TABLE>

Each Participating Company must agree to be bound by the terms of the Trust and
Plan.

                  (7)      EFFECTIVE DATE.  The effective date of the Trust and
Plan is June 1, 1992.

                  (8)      RESTATEMENT DATE.  The restatement date of this
Trust and Plan, if applicable, is N/A.

                  (9)      TAXABLE YEAR.  The Company's taxable year is the 12
consecutive month period ending on May 31.

                  (10)     PLAN YEAR.  The plan year is:

                           [ ] the Company's taxable year

                           [ ] the 12 consecutive calendar month period
                               ending on May 31.

                  (11)     LIMITATION YEAR.  The limitation year is:

                           [ ] the plan year

                           [ ] the 12 consecutive calendar month period
                               ending on May 31.

                  (12)     COVERED EMPLOYEES.  Covered Employees under the
Trust and Plan are all employees of Participating Companies,
excluding the following:

                           [x] aliens whose expected employment within the
                               United States will be less than 2 years.

                                        3


<PAGE>   4

                           [x] employees covered by a collective bargaining
                               agreement to which a Participating Company is a
                               party, unless such collective bargaining
                               agreement provides for participation in the Trust
                               and Plan

                           [ ] salaried employees

                           [ ] hourly-paid employees

                           [x] leased employees

                           [ ] commissioned salesmen

                           [ ] ______________________ job categories at the
                               ______________________ location

                           [x] other (specify):  hourly-paid employees at
                               certain Participating Companies except those
                               listed on Attachment C.

                           [ ] none

The foregoing exclusions may only be elected to the extent that any such
election will not cause the Trust and Plan to fail to satisfy the requirements
set forth in Sections 401(a)(26) and 410(b) of the Code.

                  (13)     SERVICE.  An employee's service, as defined in
Article III of the Trust and Plan, will be determined as follows:

                  (a)      ELIGIBILITY.  An employee's eligibility to par-
                           ticipate in the Trust and Plan is calculated pursu-
                           ant to the following method:

                           [ ]  elapsed time method

                           [x]  hours method

N/A               (b)      VESTING. An employee's vesting service under the
                           Trust and Plan is calculated pursuant to the
                           following method:

                                        4


<PAGE>   5



                  Years Ending Before ____________ (Adoption Date or
                  other date)

                  [ ]  elapsed time method

                  [ ]  hours method

                  Years Ending After ______________ (Adoption Date or
                  other date)

                  [ ]  elapsed time method

                  [ ]  hours method

N/A      (c)      CREDITING OF SERVICE BASED ON HOURS WORKED.  The
                  following equivalency will be used to determine
                  service to be credited to participants based on
                  working time method:

                  [ ]  1 hour for each hour of service as described
                       in Section 3.2(a) of the Trust and Plan

                  [ ]  1.15 hours for each hour of service as defined
                       in Section 3.2(a) of the Trust and Plan
                       actually worked by employee

                  [ ]  1.33 hours for each hour of service as
                       defined in Section 3.2(a) of the Trust and
                       Plan which was a regular time hour actually
                       worked by the employee

                  [ ]  10 hours for each day employee has at least
                       1 hour of service as defined in Section 3.2(a)
                       of the Trust and Plan

                  [ ]  45 hours for each week employee has at least
                       1 hour of service as defined in Section 3.2(a)
                       of the Trust and Plan

                  [ ]  95 hours for each semi-monthly payroll
                       period during which employee has at least 1
                       hour of service as defined in Section 3.2(a)
                       of the Trust and Plan

                  [ ]  190 hours for each month employee has at least
                       1 hour of service as defined in Section 3.2(a)
                       of the Trust and Plan

                                        5


<PAGE>   6




                  (14)     PARTICIPATION REQUIREMENTS.  To become a partici-
pant, a Covered Employee must satisfy the following requirements:

N/A               (a)      SERVICE REQUIREMENT.  To become eligible to partic-
                           ipate in the Trust and Plan, a Covered Employee:

                           [ ]  need not complete any waiting period

                           [ ]  must complete _______ years(s) of service (may
                                not exceed 2*)

                           [ ]  must complete _______ consecutive month(s)
                                of service without regard to the number of
                                hours of service completed (may not exceed
                                24*)

                  (b)      SPECIAL 401(k) SERVICE REQUIREMENT.  To become
                           eligible to make 401(k) contributions under the
                           Trust and Plan, a Covered Employee:

                           [ ] need not complete any waiting period

                           [x] must complete 1 year of service

                           [ ] must complete _______ consecutive month(s) of
                               service (without regard to the number of hours
                               of service completed)

                  (c)      AGE REQUIREMENT.  To become eligible to participate
                           in the Trust and Plan a Covered Employee:

                           [ ] need not attain any minimum age

                           [x] must be at least 21 years of age (not more
                               than 21)

                  (15)     ENTRY DATE.  An eligible Covered Employee commences
participation in the Trust and Plan on:

                           [ ] 1st day of the month

                           [ ] 1st day of the plan year

- --------

*A 2-year or 24-month service requirement may be elected only in the event that
the Trust and Plan provides for full and immediate vesting.

                                        6


<PAGE>   7




                           [x]  earlier of the June 1 or December 1
                               (first day of the first month or first day of
                               the seventh month)

                           [ ] 1st day of each calendar quarter

coinciding with or next following the date such Covered Employee meets the
eligibility requirements.

                  (16)     COMPENSATION.

                  (a)      BASIC DEFINITION.  A participant's compensation
                           shall be determined on the basis of the following:

                           [ ]  Section 415 compensation as described in
                                Section 2.11(a)(i) of the Trust and Plan

                           [ ]  Modified Section 415 compensation as described
                                in Section 2.11(a)(ii) of the Trust and Plan

                           [ ]  Modified Section 3121 compensation as de-
                                scribed in Section 2.11(a)(iii) of the Trust
                                and Plan

                           [ ]  Modified Section 3401 compensation as de-
                                scribed in Section 2.11(a)(iv) of the Trust
                                and Plan

                           [x]  W-2 earnings as described in Section
                                2.11(a)(v) of the Trust and Plan for all plan
                                years

                           [ ]  W-2 earnings as described in Section
                                2.11(a)(v) of the Trust and Plan for plan
                                years commencing prior to May 10, 1990 and
                                the definition selected above for all
                                subsequent plan years

                  (b)      Safe Harbor Adjustments To Compensation

                           [x]  Compensation shall be increased for salary
                                reduction amounts under 401(k), 125, 403(b)
                                and similar plans as described in Section
                                2.11(b)(i) of the Trust and Plan

                                        7


<PAGE>   8



                           [ ]  Compensation shall be reduced by any extra
                                benefits as described in Section 2.11(b)(ii)
                                of the Trust and Plan

                  (c)      Other Exclusions From Compensation*

                           [ ]  pre-entry date compensation

                           [ ]  commissions

                           [ ]  bonuses (whether discretionary or
                                non-discretionary)

                           [ ]  commissions, overtime and bonuses (whether
                                discretionary or non-discretionary)

                           [x]  other   AUTO ALLOWANCES AND GENERAL BUSINESS
                                EXPENSE ALLOWANCES AND TAXABLE LIFE INSURANCE
                                AMOUNTS.

                           [ ]  none of the above

                  (17)     CONTRIBUTIONS.

                  (a)      PARTICIPATING COMPANY CONTRIBUTIONS.  For each plan
year, the Participating Companies may make any or all of the
following contributions to the Trust and Plan, as they so elect:

N/A          [ ]  (i)      PROFIT SHARING CONTRIBUTIONS.  A profit sharing
                           contribution in an amount equal to:

                           [ ] _______% of each eligible participant's
                               compensation**

                           [ ] ______% of each eligible participant's
                               compensation under the integration level
                               specified in Section (18) of this Adoption
                               Agreement plus ______% of such participant's

- --------

     *No exclusions from compensation (other than pre-entry date compensation)
may be elected if Participating Company contributions are allocated in
accordance with the integration method described in Section (18)(a).

    **May not exceed 15%.

                                        8


<PAGE>   9



                               compensation over the integration level
                               specified in Section (18) of this Adoption
                               Agreement*

                           [ ] an amount determined by the Company for the
                               year

                           [ ] an amount determined by each Participating
                               Company for the year

N/A          [ ]   (ii)    MATCHING CONTRIBUTIONS.  A matching contribution in
                           an amount equal to:

                           [ ] _______% of each eligible participant's
                               pre-tax contributions up to a maximum
                               matching contribution of _________
                               (percentage of participant's compensation or
                               dollar amount)

                           [ ] a percentage of each eligible participant's
                               pre-tax contributions as determined by the
                               Participating Company for a match period up
                               to a maximum matching contribution of
                               _________ (percentage of participant's
                               compensation or dollar amount)

                           The match period for which matching contributions are
                           made is:

                           [ ]  week

                           [ ]  calendar month

                           [ ]  calendar quarter

                           [ ]  semi-annual

                           [ ]  plan year

                           [ ]  Company's pay period

- --------

     *The lower limit must be greater than zero (0), and the upper limit may not
exceed the lower limit by more than the lesser of the lower limit, or the
greater of 5.7% or the rate of tax under Code Section 3111(a) which is
attributable to old-age insurance, as adjusted pursuant to Section 6.2(b).

                                        9


<PAGE>   10



                           [ ]  each Participating Company's pay period

N/A          [ ]     (iii) A special ADP contribution in an amount as
                           shall be determined by the Company from time to time.

                  (b)      PRE-TAX CONTRIBUTIONS.  For each plan year,
participants:

                           [x]  may make pre-tax contributions as follows:

                                [ ]  whole percentage of compensation not less
                                     than 1% nor more than 15%

                                [ ]  any amount up to _______% of compensation

                                [ ]  any amount not less than $_______ nor
                                     more than $_______

                           [ ]  may not make pre-tax contributions pursuant to
Section 5.1 of the Trust and Plan.

                  (c)      AFTER TAX CONTRIBUTIONS.*  For each plan year,
participants:

                           [ ]  may make after tax contributions of between
                                ____% and ____% compensation

                           [ ]  any amount up to _______% of compensation

                           [ ]  any amount not less than $_______ nor more
                                than $_______

                           [x]  may not make after tax contributions

- --------

     *After tax contributions can be made to the Trust and Plan only if the
Company has elected to allow pre-tax contributions thereunder.

                                       10


<PAGE>   11



                  (18)     ALLOCATION OF PROFIT SHARING CONTRIBUTIONS.

N/A                        (a)      Profit sharing contributions will be
allocated in accordance with one of the following methods as described in
Section 6.2 of the Trust and Plan:

                           [ ]  relative compensation

                           [ ]  integration method with an integration level
                                of:

                                [ ]  _____% of the Social Security taxable
                                     wage base

                                [ ]  $____

                           [ ]  per capita among eligible participants

N/A               (b)      Contributions made by each Participating Company
shall be allocated among:

                           [ ]  all eligible participants

                           [ ]  eligible participants employed by such
                                Participating Company

N/A               (19)     EXCLUSIONS FROM ELIGIBILITY FOR PROFIT SHARING
ALLOCATIONS AND REALLOCATION OF FORFEITURES. The following participants shall be
excluded from receiving an allocation of profit sharing contributions pursuant
to Section 6.2 of the Trust and Plan and a reallocation of forfeitures, if
applicable, pursuant to Section 15.4 of the Trust and Plan:

                           [ ]  participants who complete fewer than ______
                                hours of service (not more than 1,000)
                                during the plan year

                           [ ]  participants whose employment terminates prior
                                to the last day of the plan year

                                       11


<PAGE>   12



                           [ ]  participants whose employment terminates
                                prior to the last day of the plan year for
                                reasons other than:

                                [ ]  retirement

                                [ ]  disability

                                [ ]  death

                  (20)     VESTING OF PARTICIPATING COMPANY CONTRIBUTIONS.

N/A               (a)      VESTING OF PROFIT SHARING CONTRIBUTIONS.  Profit
sharing contributions made by a Participating Company pursuant to Section
17(a)(i) of this Adoption Agreement will become vested pursuant to the
following schedule:

                           [ ]  Vested Percentage is 100% at all times

                           [ ]  Vested Percentage is 100% upon completion of
                                ___ years of vesting service (may not exceed
                                5)

                           [ ]  graded vesting, as follows:

<TABLE>
<CAPTION>
                           Years of                                       Vested
                           Vesting Service                                Percentage
                           ---------------                                ----------
                           <S>                                            <C>
                           Less than 1                                    ___%
                           1 but less than 2                              ___%
                           2 but less than 3                              ___%
                           3 but less than 4                              ___% (must be at least 20%)
                           4 but less than 5                              ___% (must be at least 40%)
                           5 but less than 6                              ___% (must be at least 60%)
                           6 but less than 7                              ___% (must be at least 80%)
                           7 or more                                      100%
</TABLE>

N/A               (b)      VESTING OF MATCHING CONTRIBUTIONS. Matching
contributions made by a Participating Company pursuant to Section 17(a)(ii) of
this Adoption Agreement become vested as follows:

                           [ ]  Vested Percentage is 100% at all times

                                       12


<PAGE>   13



                           [ ]  Vested Percentage is determined in accordance
                                with the vesting schedule in Section (20)(a)
                                above

N/A               (21)      VESTING IN TOP-HEAVY YEARS. The Vested Percentage
of a participant who is credited with a year of vesting service during a plan
year in which the Trust and Plan is top-heavy, will be determined as follows:

                           [ ]  Vested Percentage is determined in accordance
                                with the vesting schedule in Section (20)
                                above

                           [ ]  Vested Percentage is 100% at all times

                           [ ]  Vested Percentage is 100% upon completion of
                                __ years of vesting service (may not exceed
                                3)

                           [ ]  graded vesting, as follows:
<TABLE>
<CAPTION>
                           Years of                                       Vested
                           Vesting Service                                Percentage
                           ---------------                                ----------
                           <S>                                            <C>
                           Less than 1                                      0%
                           1 but less than 2                              ___%
                           2 but less than 3                              ___% (must be at least 20%)
                           3 but less than 4                              ___% (must be at least 40%)
                           4 but less than 5                              ___% (must be at least 60%)
                           5 but less than 6                              ___% (must be at least 80%)
                           6 or more                                      100%
</TABLE>

N/A               (22)     VESTING SERVICE EXCLUSIONS.  Vesting service
excludes any years of service or periods of service which occurred:

                           [ ]   prior to __________ (cannot be later than the
                                 effective date of the Trust and Plan)

                           [ ]   prior to the time the participant attained ___
                                 years of age (not more than 18)

                           [ ]   prior to the effective date of the Trust and
                                 Plan

                                       13


<PAGE>   14



                           [ ]   prior to the acquisition by the Controlled
                                 Group of a predecessor employer (cannot be
                                 excluded if predecessor maintained a qualified
                                 plan)

                           [ ]   for employees of __________ (division,
                                 department or location), prior to _________
                                 (cannot be later than the date employer
                                 became a Participating Company)

N/A               (23)     USE OF FORFEITURES.  Amounts forfeited under the
Trust and Plan will be:

                           [ ]   reallocated among the accounts of eligible
                                 participants

                           [ ]   used to reduce future Participating Company
                                 contributions

N/A               (24)     RECREDITING OF ACCOUNTS ON REHIRE. Amounts forfeited
following a termination of employment by a participant who is rehired by a
Participating Company prior to his incurring five (5) consecutive One Year
Breaks In Service will be:

                           [ ]   recredited to his employer contribution
                                 and/or match account as of his date of rehire

                           [ ]   recredited to his employer contribution
                                 and/or match account upon repayment to the
                                 Trust and Plan of any amounts which were
                                 previously distributed to such participant
                                 from the Trust and Plan following his
                                 previous termination of employment

                  (25)     NORMAL RETIREMENT DATE.  A participant's normal
retirement date is the day on which he meets each of the following
requirements:

                           [x]   attains age 65 (not less than 55 nor more
                                 than 65)

                           [x]   completes 5 years of participation (not to
                                 exceed 5 years)

                                       14


<PAGE>   15

N/A               (26)     EARLY RETIREMENT DATE. A participant's early
retirement date is the day on which he retires from the employ of the
Controlled Group subsequent to the date he meets all of the following
requirements:

                           [ ]  attains age ______

                           [ ]  completes ______ years of participation

N/A               (27)     PERMANENT AND TOTAL DISABILITY.  Permanent and total
disability will be determined on the basis of:

                           [ ]  Social Security definition contained in
                                Section 2.30(a) of the Trust and Plan

                           [ ]  alternative definition contained in Section
                                2.30(b) of the Trust and Plan

                  (28)     FORMS OF BENEFIT.  Distributions upon termination of
employment, retirement, disability and death will be made in accordance with:

                           [x]  Article XVIII of the Trust and Plan
                                (Non-Annuity Forms)

                           [ ]  Article XVIII-A of the Trust and Plan (Normal
                                Form - Annuity)

                           [ ]  Article XVIII-A of the Trust and Plan (Normal
                                Form - Lump Sum unless Annuity Form elected)

                  (a)      NON-ANNUITY FORMS OF BENEFIT.  Distributions made in
accordance with Article XVIII or XVIII-A of the Trust and Plan in
a non-annuity form will be permitted in the following form(s):

                           [x]  lump sum form

                           [ ]  installment payments over a period of years
                                    (not to exceed _____ years)

                                       15


<PAGE>   16



                           [ ]  installment payments over the maximum
                                permissible years under Section 401(a)(9) of
                                the Code

N/A               (b)      ANNUITY FORMS OF BENEFIT. Distributions made in
accordance with Article XVIII-A of the Trust and Plan in an annuity form will
be permitted in the following form(s):

                           [ ]  life annuity form

                           [ ]  spouse's annuity form

                           [ ]  joint and survivor form

                           [ ]  life-period certain form over ___ year period

                           [ ]  full cash refund life annuity form

                           [ ]  lump sum form

                           [ ]  installment payments over a period of years
                                (not to exceed ____ years)

N/A               (c)      TIMING OF INSTALLMENT PAYMENTS.  Installment
payments, if permitted pursuant to (a) or (b) above, will be made on the
following basis:

                           [ ]   monthly

                           [ ]   quarterly

                           [ ]   semi-annually

                           [ ]   annually

                  (29)     BENEFIT COMMENCEMENT DATE.  In the event of the
termination of employment of a participant for any reason other than his
death, disability or retirement, distribution shall be

                                       16


<PAGE>   17

made or shall commence to be made pursuant to Section 15.2 of the Trust and Plan
as of the date specified below:

                  (a)      if the value of his vested interest is $3,500 or
                           less (not more than $3500):

                           [x]  as soon as reasonably possible following his
                                termination of employment

                           [ ]  as soon as reasonably possible following the
                                close of the plan year in which occurs his
                                termination of employment

                           [ ]  as soon as reasonably possible following the
                                close of the calendar quarter in which occurs
                                his termination of employment

                           [ ]  as soon as reasonably possible following the
                                close of the half-year in which occurs his
                                termination of employment

                           [ ]  as soon as reasonably possible following the
                                valuation date which next follows the date
                                on which occurs his termination of
                                employment

                           [ ]  at the same time as indicated in (b) below if
                                his vested interest were a larger amount

                  (b)      if the value of his vested interest is in excess of
                           $3,500 (not more than $3500):

                           [x]  as soon as reasonably possible following the
                                close of the plan year in which his normal
                                retirement date occurs, or as of such earlier
                                date as the participant shall select provided
                                such earlier date is not earlier than an
                                administratively reasonable period beyond the
                                date of his termination of employment

                           [ ]  as soon as reasonably possible following the
                                close of the plan year in which his normal
                                retirement date occurs, or as of such
                                earlier date as the participant shall select
                                provided such earlier date is not earlier
                                than

                                _______________________________________________

                                _______________________________________________



                                       17


<PAGE>   18



                    / / as of the date specified below determined on
                        the basis of the amount of his vested
                        interest:

                        (i)     if the value of his vested interest is
                                greater than $_________ (not more than
                                $3,500), but not in excess of
                                $_____________________, the distribution
                                shall be made or shall commence as soon
                                as reasonably possible following the
                                close of the plan year in which his
                                normal retirement date occurs, or as of
                                such earlier date as the participant
                                shall select provided such earlier date
                                is not earlier than an administratively
                                reasonable period beyond the date of his
                                termination of employment; or

                        (ii)    if the value of his vested interest is in
                                excess of $______________________, the
                                distribution shall be made or shall
                                commence as soon as reasonably possible
                                following the close of the plan year in
                                which his normal retirement date occurs,
                                or as of such earlier date as the
                                participant shall select provided such
                                earlier date is not earlier than an
                                administratively reasonable period beyond
                                _________________________________________

                                _________________________________________

Except as otherwise permitted by the Adoption Agreement pursuant to Section 18.1
or 18.1A of the Trust and Plan, and pursuant to the election of the participant,
distributions must be made or commence to be made not later than sixty (60) days
after the close of the plan year in which the participant's normal retirement
date occurs.

                  (30)     DELAYED DISTRIBUTION.  Following termination of
employment, distributions:



                    /x/ will commence as of the dates specified in
                        Articles XV, XVI and XVII of the Trust and
                        Plan

                                       18


<PAGE>   19



                       / / may be deferred by election of the participant
                           or his beneficiary subject to Sections 18.5
                           and 18.9A of the Trust and Plan

                       / / may be deferred by election of the participant
                           or his beneficiary subject to Sections 18.5
                           and 18.9A of the Trust and Plan and the
                           following additional restrictions: __________
                           _____________________________________________
                           _____________________________________________

                  (31)     INSURANCE.  The purchase of insurance at the
direction of the participant:

                                / / is permitted

                                /x/ is not permitted

If the purchase of insurance is permitted above, it will be purchased as
follows:

                                / / at the direction of the participant

                                / / on behalf of all participants meeting the
                                    following requirements (specify): __________
                                    ____________________________________________
                                    ____________________________________________

                  (32)     LOANS.  Loans:

                                /x/ are permitted in any circumstances upon
                                    approval of loan application

                                / / are permitted only in the following limited
                                    circumstance(s) and upon approval of the
                                    loan application

                                        / / in the event the participant would
                                            otherwise qualify for a hardship
                                            distribution, but for the
                                            availability of a plan loan or
                                            other assets

                                        / / Other (specify): ___________________
                                            ____________________________________

                                       19


<PAGE>   20



                                / / are not permitted

                  If permitted, loans may be made from the following accounts:

                                /x/ all accounts

                                / / pre-tax account

                                / / match account

                                / / employer contribution account

                                / / special ADP account

                                / / personal account

                  (33)     MINIMUM AMOUNT OF LOANS.  If loans are permitted
under Section (32) above, the minimum amount of any loan is:


                                /x/ $  1,000.00

                                / / no minimum

                  (34)     WITHDRAWALS AND HARDSHIP.

                  (a)      WITHDRAWALS FROM PRE-TAX ACCOUNT.  Withdrawals from
pre-tax accounts:


                                / / are permitted after age 59-1/2 (must be at
                                    least age 59-1/2)

                                / / are not permitted

                                / / not applicable

N/A               (b)      WITHDRAWALS OF QUALIFIED NONELECTIVE CONTRIBUTIONS.
Withdrawals from accounts that contain qualified nonelective contributions:

                                / / are permitted after age ____________ (must
                                    be at least age 59-1/2)

                                       20


<PAGE>   21




                                / / are not permitted

                                / / not applicable

N/A               (c)      WITHDRAWALS FROM EMPLOYER CONTRIBUTION ACCOUNT.
Withdrawals from employer contribution accounts:

                                / / are permitted after:

                                    CHOOSE ONE:

                                     / / the amounts have been credited to such
                                         account for at least 2 years

                                     / / the participant has completed a minimum
                                         of 5 years of service

                                / / are permitted after age __________

                                / / are not permitted

N/A               (d)      WITHDRAWALS FROM MATCH ACCOUNTS.  Withdrawals from
match accounts:

                                / / are permitted after:

                                    Choose one:

                                    / / the amounts have been credited to such
                                        account for at least 2 years

                                    / / the participant has completed a minimum
                                        of 5 years of service

                                / / are permitted after age __________

                                / / are not permitted

                                / / not applicable

                                       21


<PAGE>   22



                  (e)      WITHDRAWALS FROM ROLLOVER ACCOUNTS.  Withdrawals
from rollover accounts:


                                /x/ are permitted

                                / / are not permitted

N/A               (f)      WITHDRAWALS FROM AFTER TAX ACCOUNTS.  Withdrawals
from after tax accounts:

                                / / are permitted

                                / / are not permitted

N/A               (g)      WITHDRAWALS FROM PRE-87 IRA ACCOUNTS.  Withdrawals
from Pre-87 IRA accounts:

                                / / are permitted

                                / / are permitted after age ______

                                / / are permitted for hardship

                                / / are not permitted

                  (h)      HARDSHIP DISTRIBUTIONS.  Hardship distributions:


                                /x/ are permitted

                                / / are not permitted

                  (35)     MINIMUM AMOUNT OF WITHDRAWALS.  If withdrawals are
permitted under Section (34) above, the minimum amount of any withdrawal shall
be:

                                       22


<PAGE>   23



                                / / the lesser of $________ or the total vested
                                    amount credited to the participants accounts
                                    from which a withdrawal may be made


                                /x/ no minimum

                  (36)     ROLLOVER CONTRIBUTIONS.  Rollover contributions from
another qualified retirement plan:


                                /x/ are permitted

                                / / are not permitted

                  (37)     APPOINTMENT OF TRUSTEE.  The Company hereby
designates the following institution or person(s) as Trustee(s) under the
Trust and Plan:

                              Ameritrust Company N.A.
                              _______________________________
                              _______________________________
                              _______________________________

                  (38)     APPOINTMENT OF ADMINISTRATOR.  The Company hereby
designates RPM, Inc. as the Administrator of the Trust and Plan.

                  (39)     411(d)(6) Protection.  Benefits protected under
Section 411(d)(6) of the Code, if any, are:

                              None
                              ______________________________
                              ______________________________
                              ______________________________

                                       23


<PAGE>   24



                  These benefits are protected with respect to:

                                / / pre-Adoption Date account only

                                / / total account

                  (40)     TOP HEAVY PROVISIONS.

                  (a) TOP-HEAVY MINIMUM BENEFIT. If this Trust and Plan is
top-heavy for a plan year and if a participant who is a non-key employee is also
a participant in any defined benefit or defined contribution plan maintained by
a Participating Company, the top-heavy minimum benefit shall be provided as
follows:


               /x/  the minimum benefit required under Code Section 416(c)(l) or
                    Code Section 416(h)(2)(A)(ii) shall be provided under one of
                    the defined benefit plans in a manner such that the benefit
                    provided under such defined benefit plan shall be offset by
                    the actuarial equivalent of the amounts, if any, credited to
                    the participant's accounts under this Trust and Plan and any
                    other defined contribution plan maintained by a
                    Participating Company for such top-heavy year or years

              / /   the minimum benefit required under Code Section 416(c)(l) or
                    Code Section 416(h)(2)(A)(ii) shall be provided under one of
                    the defined benefit plans maintained by the Participating
                    Company

              / /   the minimum contribution required under Regulation Section
                    1.416-1(m)(12) or Regulation Section 1.416-1(m)(14) shall be
                    provided under one of the defined contribution plans
                    maintained by the Participating Company

                  (b)      PRESENT VALUE.  For purposes of establishing present
value to compute the top-heavy ratio, any benefit shall be discounted only for
mortality and interest based on the following:

                                       24


<PAGE>   25



                  INTEREST RATE:  8% FOR ALL FORMS OF BENEFIT EXCEPT LUMP
                  SUM AND, WITH RESPECT TO LUMP SUM DISTRIBUTIONS, A RATE
                  EQUAL TO THE K-1 INTEREST RATE IN EFFECT 3 MONTHS PRIOR
                  TO THE LUMP SUM DISTRIBUTION ESTABLISHED BY THE PENSION
                  BENEFIT GUARANTY CORPORATION FOR DEFERRED ANNUITIES UNDER
                  REG. SEC. 2619.45 BUT IN NO EVENT GREATER THAN A RATE OF
                  10%

                  MORTALITY TABLE:  UNISEX PENSION 1984 MORTALITY TABLE
                  RATES WITH AN AGE SET BACK OF 1 YEAR FOR EMPLOYEES AND 2
                  YEARS FOR BENEFICIARIES

                  (c)      VALUATION DATE.  For purposes of computing the
top-heavy ratio, the valuation date shall be:


                                /X/ the last day of the plan year

                                / / other (specify):  ___________________

                                    _____________________________________

                  (41) EXCESS ANNUAL ADDITIONS. If a Participating Company
maintains more than one qualified plan and the limitations set forth in Sections
24.1 and 24.2 of the Trust and Plan are exceeded, the benefits of a participant
who participates in more than one such plan will be reduced in the following
order:

                  (a)      FIRST, ALLOCATIONS MADE UNDER THIS TRUST AND
                           PLAN SHALL BE REDUCED;

                  (b)      SECOND, PROJECTED BENEFITS UNDER THE RPM, INC.
                           RETIREMENT PLAN SHALL BE REDUCED; AND

                  (c)      ACCRUED BENEFITS UNDER THE RPM, INC.
                           RETIREMENT PLAN SHALL BE REDUCED.

                                       25


<PAGE>   26



                  (42) RELIANCE. The Company may not rely on a notification
letter issued by the National or District Office of the Internal Revenue Service
as evidence that the Trust and Plan is qualified under Section 401 of the Code.
In order to obtain reliance with respect to plan qualification, the Company must
apply to the appropriate key district office for a determination letter.

                  (43) SPONSOR INFORMATION.  The name, address and
telephone number of the Sponsor of this regional prototype plan are:

                           Calfee, Halter & Griswold
                           1800 Society Building
                           Cleveland, Ohio  44114
                           (216) 622-8200

Inquiries regarding adoption of the Trust and Plan, the meaning of any
provisions of the Trust and Plan, or the effect of the notification letter
should be directed to the sponsor at the address set forth above.

                  (44) AMENDMENT OR DISCONTINUANCE OF PLAN. The Sponsor of this
regional prototype plan will inform the Company of any amendments made to the
plan or the discontinuance thereof.

                  (45) IMPROPER COMPLETION OF ADOPTION AGREEMENT.  Failure
to properly complete this Adoption Agreement may result in disqualification of
the Trust and Plan.

                  (46) BASIC PLAN DOCUMENT.  This Adoption Agreement may be
used only in conjunction with basic plan document 01.

                                       26


<PAGE>   27



                  IN WITNESS WHEREOF, the Company and the Participating
Companies, by their duly authorized officers, have caused this Adoption
Agreement to be executed this 20th day of August, 1992.

  RPM, INC.
_____________________________            ______________________________
("Company")                              ("Participating Companies")

By  /s/ Thomas C. Sullivan
   ___________________________

And /s/ Paul A. Granzier
   __________________________
                                         AGR Company
                                         Alox Corporation
                                         American Emulsions Co., Inc.
                                         Bondex International, Inc.
                                         Bradshaw - Praeger & Co., Inc.
                                         Briner Paint Mfg. Co., Inc.
                                         Carboline Company
                                         Chemical Specialties Manufacturing
                                               Corporation
                                         Chemical Coatings, Inc.
                                         Consolidated Coatings Corporation
                                         Craft House Corporation
                                         Day-Glo Color Corp.
                                         Design/Craft Fabric Corporation
                                         Floquil-Polly S Color Corp.
                                         Haartz-Mason, Inc.
                                         Kop-Coat, Inc.
                                         Mameco International Inc.
                                         Mohawk Finishing Products, Inc.
                                         Paramount Technical Products, Inc.
                                         PCI Industries, Inc.
                                         Republic Powdered Metals, Inc.
                                         Richard S. Thibaut, Inc.
                                         RPM World Travel, Inc.
                                         Talsol Corporation
                                         The Testor Corporation
                                         Westfield Coatings Corporation
                                         Wm. Zinnser & Co., Inc.
                                         Wisconsin Protective Coatings Corp.
                                         Society National Bank as Successor By
                                          Merger to Ameritrust Company National
                                          Association

<PAGE>   28



                  The undersigned Trustee hereby executes and agrees to act as
Trustee under the Trust and Plan.

                                        SOCIETY NATIONAL BANK AS
                                        SUCCESSOR BY MERGER TO
                                        AMERITRUST COMPANY NATIONAL
                                        ASSOCIATION

                                      By____________________________

                                      And___________________________

                  Calfee, Halter & Griswold, by its duly authorized
representative, hereby acknowledges receipt of and accepts the foregoing
Adoption Agreement this 11th day of June, 1993.

                                        CALFEE, HALTER & GRISWOLD
                                        ("Regional Prototype Sponsor")

                                       By: ________________________

                                       28


<PAGE>   29



                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

                       ATTACHMENT A TO ADOPTION AGREEMENT
                       ----------------------------------
                                CONTROLLED GROUP
                                ----------------

                           AGR Company
                           Alox Corporation
                           Alox International Sales Corporation
                           American Emulsions Co., Inc.
                           Beta Chem, Inc.
                           Bondex International, Inc.
                           Bondex International (Canada) Ltee. Ltd.
                           Bradshaw-Praeger & Co., Inc.
                           Briner Paint Mfg. Co.
                           BSP Systems, Inc.
                           Cal-O-Cam, Inc.
                           Carboline Company
                           Carboline Dubai Corporation
                           Carboline International Corporation
                           Carboline World Wide Corporation
                           Carboline/Ferro Powder Coatings Company
                           Chemical Specialties Manufacturing Corporation
                           Chemical Coatings, Inc.
                           Consolidated Coatings Corporation
                           Craft House Corporation
                           Day-Glo Color Corp.
                           Design/Craft Fabric Corporation
                           Euchem
                           Euchem, Inc.

                                       29


<PAGE>   30




                           First Colonial Insurance Company, Inc.
                           Floquil-Polly S Color Corp.
                           Fopeco, Inc.
                           H. Behlen & Bro., Inc.
                           Haartz-Mason, Inc.
                           Kop-Coat, Inc.
                           L.D. Wracm, Inc.
                           Label Systems Corporation
                           Lubraspin Corporation
                           Mameco International, Inc.
                           Map II, Inc.
                           Martin Mathys N.V.
                           Mohawk Finishing Products, Inc.
                           Paramount Technical Products, Inc.
                           PCI Industries, Inc.
                           Radiant Color N.V.
                           Redwood Transport, Inc.
                           Republic D & B, Inc.
                           Republic Powdered Metals, Inc.
                           Richard E. Thibaut, Inc.
                           RPM/Belgium N.V.
                           RPM/Europe B. V.
                           RPM/France S.A.
                           RPM, Inc.
                           RPM/Luxembourg S.A.
                           RPM/Netherlands B.V.
                           RPM of Mass., Inc.

                                       30


<PAGE>   31



                           RPM of North Carolina, Inc.
                           RPM World Trade
                           RPM World Travel, Inc.
                           RPOW (France) S.A.
                           Select Dye & Chemical, Inc.
                           Talsol Corporation
                           The Euclid Chemical Corporation
                           (General Partnership)
                           The Euclid Chemical International Sales Corp.
                           The Testor Corporation
                           U.S. Polymerics, Inc.
                           Westfield Coating Corporation
                           Westgate Advertising, Inc.
                           William Zinnser & Co., Inc.
                           Wisconsin Protective Coatings Corp.



                                       31


<PAGE>   32



                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

                       ATTACHMENT B TO ADOPTION AGREEMENT
                       ----------------------------------
                             PARTICIPATING COMPANIES
                             -----------------------

                                                Adoption          Cessation
Name                                              Date               Date
- ----                                              ----               ----

AGR Company                                 June 1, 1992

Alox Corporation                            June 1, 1992

American Emulsions Co., Inc.                June 1, 1992

Bondex International, Inc.                  June 1, 1992

Bradshaw-Praeger & Co., Inc.                June 1, 1992

Briner Paint Mfg. Co., Inc.                 June 1, 1992

Carboline Company                           June 1, 1992

Chemical Specialties Manufacturing
Corporation                                 June 1, 1992

Chemical Coatings, Inc.                     June 1, 1992

Consolidated Coatings Corporation           June 1, 1992

Craft House Corporation                     June 1, 1992

Day-Glo Color Corp.                         June 1, 1992

Design/Craft Fabric Corporation             June 1, 1992

Floquil-Polly S Color Corp.                 June 1, 1992

Haartz-Mason, Inc.                          June 1, 1992

Kop-Coat, Inc.                              Dec. 1, 1992

Mameco International, Inc.                  June 1, 1992

Mohawk Finishing Products, Inc.             June 1, 1992

Paramount Technical Products, Inc.          June 1, 1992

PCI Industries, Inc.                        June 1, 1992

Republic Powdered Metals, Inc.              June 1, 1992

Richard E. Thibaut, Inc.                    June 1, 1992

                                       32


<PAGE>   33


                                                Adoption          Cessation
Name                                              Date               Date
- ----                                              ----               ----

RPM, Inc.                                   June 1, 1992

RPM World Travel, Inc.                      June 1, 1992

Talsol Corporation                          June 1, 1992

The Testor Corporation                      June 1, 1992

Westfield Coatings Corporation              June 1, 1992

William Zinnser & Co., Inc.                 June 1, 1992

Wisconsin Protective Coatings Corp.         June 1, 1992







                                       33


<PAGE>   34




                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

                       ATTACHMENT C TO ADOPTION AGREEMENT
                       ----------------------------------
                PARTICIPATING COMPANIES COVERING HOURLY EMPLOYEES
                -------------------------------------------------

                       AGR Company
                       Carboline Company
                       Consolidated Coatings Corporation
                       Craft House Corporation
                       Day-Glo Color Corp.
                       Floquil-Polly S Color Corp.
                       Kop-Coat, Inc.
                       Mohawk Finishing Products, Inc.
                       Paramount Technical Products, Inc.
                       Republic Powdered Metals, Inc.
                       The Testor Corporation
                       Wisconsin Protective Coatings Corp.


                                       34


<PAGE>   35
                        RETIREMENT SAVINGS TRUST AND PLAN
                        ---------------------------------

                            A REGIONAL PROTOTYPE PLAN
                                  SPONSORED BY

                            CALFEE, HALTER & GRISWOLD
                               800 Superior Avenue
                                   Suite 1800
                              Cleveland, Ohio 44114
                                 (216) 622-8200





                   NOTICE/CONFIDENTIAL - COPYRIGHTED MATERIAL
                   ------------------------------------------

                  This document is protected under the copyright laws of the
United States and international copyright treaties, and contains proprietary,
confidential information of Calfee, Halter & Griswold. Any use, duplication,
publication, display, modification, adaptation or dissemination of this document
or its contents requires the express written permission of Calfee, Halter &
Griswold.

                   Copyright, 1991, Calfee, Halter & Griswold
                              All Rights Reserved.


<PAGE>   36



                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>

                                                                   ARTICLE NO.
                                                                   -----------

<S>                                                                     <C>
INTRODUCTION                                                              I

    Purpose                                                              1.1
    Qualification                                                        1.2

DEFINITIONS                                                               II

    Accounts                                                             2.1
    Active Participant                                                   2.2
    Administrator                                                        2.3
    Allocation Date                                                      2.4
    Annuity Starting Date                                                2.5
    Beneficiary                                                          2.6
    Board                                                                2.7
    Code                                                                 2.8
    Committee                                                            2.9
    Company                                                             2.10
    Compensation                                                        2.11
    Controlled Group                                                    2.12
    Covered Employee                                                    2.13
    Date of Hire                                                        2.14
    Distribution Account                                                2.15
    Earned Income                                                       2.16
    Effective Date                                                      2.17
    Employee                                                            2.18
    ERISA                                                               2.19
    Excess Compensation                                                 2.20
    Highly Compensated Employee                                         2.21
    Integration Level                                                   2.22
    Leased Employee                                                     2.23
    Military Service                                                    2.24
    Net Profits                                                         2.25
    Normal Retirement Date                                              2.26
    Owner-Employee                                                      2.27
    Participant                                                         2.28
    Partner-Employee                                                    2.29
    Permanent and Total Disability                                      2.30
    Personal Accounts                                                   2.31
    Plan Year                                                           2.32
    Qualified Nonelective Contribution                                  2.33
    Related Employer                                                    2.34
    Restatement Date                                                    2.35
    Self-Employed Individual                                            2.36
    Taxable Wage Base                                                   2.37
    Taxable Year                                                        2.38
    Total Remuneration                                                  2.39
    Trust and Plan                                                      2.40

</TABLE>


                                      (ii)


<PAGE>   37

<TABLE>
<CAPTION>
                                                           ARTICLE NO.
                                                           -----------
<S>                                                          <C>
    Trustee                                                     2.41
    Vested Interest                                             2.42
    Vested Percentage                                           2.43
    Other Terms Defined                                         2.44

SERVICE                                                          III

    Service Based on the Elapsed Time Method                     3.1
    Service Based on the Hours Method                            3.2
    Service With Predecessor Employer                            3.3

ELIGIBILITY AND PARTICIPATION                                     IV

    Eligibility Requirements                                     4.1
    Entry Date                                                   4.2
    Reemployment                                                 4.3
    Active and Inactive Participants                             4.4

PRE-TAX CONTRIBUTIONS                                              V

    Election of Pre-Tax Contributions                            5.1
    Limitations on Pre-Tax Contributions                         5.2
    Changes in Elections                                         5.3
    Payment to Trustee                                           5.4
    Pre-Tax Accounts                                             5.5
    Suspension of Pre-Tax Contributions                          5.6

PARTICIPATING COMPANY CONTRIBUTIONS                               VI

    Types of Contributions                                       6.1
    Employer Contributions                                       6.2
    Matching Contributions                                       6.3
    Special ADP Contribution                                     6.4
    Payment to Trustee                                           6.5
    Accounts                                                     6.6

AFTER TAX CONTRIBUTIONS                                          VII

    Amount of After Tax Contributions                            7.1
    Changes in Payroll Deductions                                7.2
    Payment to Trustee                                           7.3
    After Tax Accounts                                           7.4
    Deductible Voluntary Contributions                           7.5

LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS                     VIII

    Contributions are Subject to Limitations                     8.1
    The Dollar Limit                                             8.2
    Deferral Percentage Limit                                    8.3

</TABLE>


                                      (iii)


<PAGE>   38

<TABLE>
<CAPTION>

                                                               ARTICLE NO.
                                                               -----------

<S>                                                                <C>
    Contribution Percentage Limit                                      8.4
    Multiple Use                                                       8.5
    Deductibility Limit                                                8.6
    Correcting Excess Contributions                                    8.7

INVESTMENT FUNDS AND DIRECTION OF INVESTMENT                            IX

    Participant Direction of Investments                               9.1
    Investment Funds                                                   9.2
    Procedures for Direction of Investment                             9.3
    Change of Direction of Investment                                  9.4
    Valuation of Investment Funds                                      9.5
    Direction of Investments Not Permitted                             9.6

INSURANCE CONTRACTS                                                      X

    Purchase of Insurance Contracts                                   10.1
    Premium Payments                                                  10.2
    Accumulation of Dividends, Etc.                                   10.3
    Insufficient Funds for Paying Premiums                            10.4
    Contract Provisions                                               10.5
    No Insurance Beyond Retirement                                    10.6
    Cash Surrender Values                                             10.7
    Purchase of Contract on Cessation of
        Active Participation                                          10.8

ACCOUNTS                                                                XI

    Establishment of Accounts                                         11.1
    Crediting of Accounts                                             11.2
    Valuation of Assets                                               11.3
    Valuation of Investment Funds                                     11.4
    Interim Valuation of Assets                                       11.5

LOANS                                                                  XII

    Loan Administration and Applications                              12.1
    Terms and Conditions of Loans                                     12.2
    Payment of Prior Loans                                            12.3
    Shareholder-Employee Defined                                      12.4

WITHDRAWALS FROM ACCOUNTS                                             XIII

    Restrictions on Withdrawals                                       13.1
    Withdrawals from Accounts                                         13.2
</TABLE>

                                      (iv)


<PAGE>   39

<TABLE>
<CAPTION>

                                                                  ARTICLE NO.
                                                                  -----------

<S>                                                                 <C>
    Termination of Withdrawal Rights                                   13.3
    Spouse's Consent                                                   13.4

HARDSHIP DISTRIBUTIONS                                                  XIV

    Hardship Distributions                                             14.1
    Immediate and Heavy Financial Need                                 14.2
    Determination of Amount Necessary to
        Satisfy an Immediate and Heavy
        Financial Need                                                 14.3
    Permitted Distributions                                            14.4
    Method of Distribution                                             14.5
    Administration of Hardship Provisions                              14.6
    Spouse's Consent                                                   14.7

TERMINATION OF EMPLOYMENT                                                XV

    Eligibility for Distribution                                       15.1
    Commencement of Distributions                                      15.2
    Vesting and Forfeitures                                            15.3
    Reallocation of Forfeitures                                        15.4
    Forfeitures Used to Reduce Contributions                           15.5
    Rehired Participants                                               15.6

RETIREMENT BENEFITS                                                     XVI

    Normal Retirement                                                  16.1
    Early Retirement                                                   16.2
    Late Retirement                                                    16.3
    Disability Retirement                                              16.4
    Application for Benefits                                           16.5

DEATH                                                                  XVII

    Death of a Participant                                             17.1
    Death of a Retired or Terminated
        Participant Prior to Commencement
        of Benefits                                                    17.2
    Death of a Retired or Terminated
        Participant after Commencement
        of Benefits                                                    17.3
    Beneficiary of a Participant                                       17.4
    Designation of Alternate Beneficiary                               17.5
    Qualified Preretirement Survivor Annuity                           17.6
    Administrator to Notify Trustee                                    17.7

</TABLE>


                                       (v)


<PAGE>   40

<TABLE>
<CAPTION>

                                                                  ARTICLE NO.
                                                                  -----------

<S>                                                                <C>
    Incomplete Disposition                                              17.8
    Ambiguity of Beneficiary Designation                                17.9

DISTRIBUTIONS                                                          XVIII

    Date of Distributions                                               18.1
    Method of Distribution                                              18.2
    Administering Distribution of Accounts                              18.3
    Lump Sum Payment of Small Amounts                                   18.4
    Restrictions                                                        18.5
    Lump Sum Value of Installment Method
        of Distributions                                                18.6
    Revaluation of Undistributed Amounts                                18.7
    Responsibility of Trustee Regarding
        Distributions                                                   18.8

DISTRIBUTIONS - ANNUITY OPTION                                        XVIII-A

    Date of Distribution                                                18.1A
    Normal Method                                                       18.2A
    Annuity Methods of Distribution                                     18.3A
    Optional Methods of Distribution                                    18.4A
    Notice of Methods of Distribution                                   18.5A
    Election of Annuity Contract or
      Optional Method of Payment                                        18.6A
    Lump Sum Payment of Small Amounts                                   18.7A
    Lump sum Value of Optional Methods
        of Distribution                                                 18.8A
    Revaluation of Undistributed Amounts                                18.9A
    Restrictions on Distributions                                      18.10A
    Responsibility of Trustee Regarding
        Distributions                                                  18.11A

THE TRUSTEE, ITS POWERS AND DUTIES                                       XIX

    Obligations and Duties                                              19.1
    Resignation by Trustee                                              19.2
    Administration Expenses                                             19.3
    Ownership of Insurance Contracts                                    19.4
    Receipts and Releases                                               19.5
    Segregation of Assets                                               19.6
    Co-Trustees                                                         19.7
    Liability of Trustee                                                19.8

</TABLE>



                                      (vi)


<PAGE>   41

<TABLE>
<CAPTION>

                                                                  ARTICLE NO.
                                                                  -----------
<S>                                                            <C>
INVESTMENTS                                                              XX

    Investment Powers and Duties of Trustee                             20.1
    Investment Manager                                                  20.2
    Income from Investments                                             20.3
    Prohibited Transactions                                             20.4

ADMINISTRATION                                                           XXI

    The Administrator                                                   21.1
    Denial of Application for Benefits                                  21.2
    Retirement Savings Committee                                        21.3
    Committee Procedures                                                21.4
    Operation of Committee                                              21.5
    Appeal Process                                                      21.6
    Liability of Committee Members                                      21.7

PROHIBITION AGAINST ALIENATION                                          XXII

    Definitions                                                         22.1
    General Prohibition on Alienation                                   22.2
    Distribution of Assets on Death                                     22.3
    No Right to Benefits by Alternate Payee                             22.4
    Notification of Parties and Determination
        Whether Qualified                                               22.5
    Interim Procedures                                                  22.6
    Investment of Separate Account                                      22.7
    Review Procedures                                                   22.8
    Status of Alternate Payee                                           22.9

TOP-HEAVY PROVISIONS                                                   XXIII

    Restrictions                                                        23.1
    Determination of Top-Heavy Status                                   23.2
    Top-Heavy Minimum Contributions                                     23.3
    Top-Heavy Vesting                                                   23.4
    Vesting upon Cessation of Top-Heavy Status                          23.5
    Determination of Super Top-Heavy Plan                               23.6
    Limitations on Annual Additions Under
        Top-Heavy Plan                                                  23.7

LIMITATIONS ON ANNUAL ADDITIONS                                         XXIV

    Definitions                                                         24.1
    Limitation on Benefits                                              24.2
</TABLE>

                                      (vii)


<PAGE>   42

<TABLE>
<CAPTION>

                                                                  ARTICLE NO.
                                                                  -----------

<S>                                                                <C>
    Reduction of Excess Benefits                                        24.3
    Suspense Account                                                    24.4

ROLLOVERS AND TRANSFERS INVOLVING OTHER
QUALIFIED RETIREMENT PLANS                                               XXV

    Rollovers and Transfers from Other Tax
        Qualified Plans                                                 25.1
    Transfer to Another Qualified Retirement
        Plan                                                            25.2

PARTICIPATING COMPANIES                                                 XXVI

    Identity of Participating Companies                                 26.1
    Authority of Company                                                26.2

AMENDMENT AND TERMINATION                                              XXVII

    Power to Amend and Terminate Plan                                   27.1
    Changes in Vesting Provisions                                       27.2
    Termination of Plan                                                 27.3
    Partial Termination of Plan or Complete
        Discontinuance of Contributions                                 27.4

MISCELLANEOUS                                                         XXVIII

    Special Rule Relating to Owner-Employees                            28.1
    Insurance Company Not a Party                                       28.2
    Bankruptcy or Insolvency                                            28.3
    Mergers, Consolidations and Transfers
        of Assets                                                       28.4
    No Employment, Legal or Equitable
        Right Created                                                   28.5
    Prohibition on Reversions                                           28.6
    Spousal Consent                                                     28.7
    Procedures for Spousal Consent                                      28.8
    Gender                                                              28.9
    Headings                                                            28.10
    Indemnification                                                     28.11
    Applicable Law                                                      28.12
    Compliance with Internal Revenue Code                               28.13

</TABLE>




                                     (viii)


<PAGE>   43



                                    ARTICLE I
                                    ---------

                                  INTRODUCTION
                                  ------------

                  1.1 PURPOSE. This Trust and Plan is created for the purpose of
providing benefits to the participants in this Trust and Plan upon their
retirement and for the purpose of providing such other benefits to such
participants and their beneficiaries as are hereinafter described.

                  1.2 QUALIFICATION.  The Trust and Plan is intended to
qualify under Sections 401(a), 401(k) and 501(a) of the Code.

                                  INTRODUCTION
                                       1-1


<PAGE>   44



                                   ARTICLE II
                                   ----------

                                   DEFINITIONS
                                   -----------

         Unless the context otherwise indicates, the following terms used herein
shall have the following meanings whenever used in this instrument, regardless
of capitalization:

                  2.1 ACCOUNTS. The word "accounts" shall mean "pre-tax
accounts" established pursuant to Article V hereof, "employer contribution
accounts," "special ADP accounts" and "match accounts" established pursuant to
Article VI hereof, "after tax accounts" established pursuant to Article VII
hereof which shall be further denominated as either "pre-87 after tax accounts"
or "post-86 after tax accounts", "pre-87 IRA accounts" established pursuant to
Section 7.5 hereof, "distribution accounts" established pursuant to Article XV
hereof and "rollover accounts" established pursuant to Article XXV hereof.

                  2.2 ACTIVE PARTICIPANT.  The words "active participant"
shall mean a participant during any period he is a Covered Employee
at a Participating Company.

                  2.3 ADMINISTRATOR. The word "Administrator" shall mean the
person or persons, corporation or partnership designated as Administrator under
Section (38) of the Adoption Agreement and Article XXI hereof.

                  2.4 ALLOCATION DATE.  The words "allocation date" shall
mean the last day of each plan year.

                                   DEFINITIONS
                                       2-1


<PAGE>   45



                  2.5 ANNUITY STARTING DATE. The words "annuity starting date"
shall mean for any participant the first day of the first period for which he
receives an amount paid as an annuity or in any other form by reason of his
termination of employment, retirement or disability under the terms of this
Trust and Plan.

                  2.6 BENEFICIARY. The word "beneficiary" shall mean any person,
other than an alternate payee as defined in Section 22.1, who receives or is
designated to receive payment of any benefit under the terms of this Trust and
Plan because of the death of a participant.

                  2.7 BOARD. The word "Board" shall mean the Board of a
corporation or the corresponding Board or Committee of a partnership or other
entity or the proprietor in the case of a proprietorship or the Board of
Trustees in the case of a non-profit corporation.

                  2.8 CODE.  The word "Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.

                  2.9 COMMITTEE.  The word "Committee" shall mean the
Retirement Savings Committee constituted under the provisions of
Article XXI of this Trust and Plan.

                2.10 COMPANY. The word "Company" shall mean the entity
designated in Section (1) of the Adoption Agreement or any other business
organization which shall assume the obligations of such entity under this Trust
and Plan.

                2.11 COMPENSATION.  The word "compensation" shall mean
certain remuneration paid to an employee by a Participating Company

                                   DEFINITIONS
                                       2-2


<PAGE>   46



determined in accordance with one of the definitions contained in subsection (a)
hereof as selected in Section (16)(a) of the Adoption Agreement. Compensation,
as so defined, will then be adjusted as described in subsection (b) hereof to
the extent specified in Section (16)(b) of the Adoption Agreement and will
exclude any amounts designated by the Company in Section (16)(c) of the Adoption
Agreement.

                (a) BASIC DEFINITION.  The basic definition of "compensation"
used under the Trust and Plan shall be one of the following:

                             (i) SECTION 415 COMPENSATION.  Compensation as
defined in Treasury Regulation Section 1.415-2(d)(1) and (2) which generally
includes all taxable remuneration paid to the employee in cash or in kind for
the performance of services as a Covered Employee for a Participating Company
including taxable expense reimbursements, fringe benefits, and welfare benefits
and generally excludes all nontaxable fringe benefits, welfare benefits and
employee benefits, except that the following amounts which are otherwise taxable
are excluded:

                            (A)     Distributions from a funded deferred
                                    compensation plan, whether or not
                                    qualified;

                            (B)     Restricted property, unless an election
                                    is made under Code Section 83(b);

                            (C)     Amounts treated as taxable upon the
                                    exercise of a nonqualified stock option;

                            (D)     Amounts realized upon the sale, exchange
                                    or other disposition of stock acquired
                                    under a qualified stock option; and

                                   DEFINITIONS
                                       2-3


<PAGE>   47



                              (E)     Amounts contributed by the Participating
                                      Company to a simplified employee pension
                                      plan.

                            (ii)    MODIFIED SECTION 415 COMPENSATION.   Compen-
sation as defined in Treasury Regulation Section 1.415-2(d)(10) which is the
same as set forth in subsection (i) above except that the following otherwise
taxable amounts will also be excluded:

                              (A)     Amounts paid to the employee as accident
                                      or sickness benefits or medical
                                      reimbursements;

                              (B)     Moving expenses; and

                              (C)     All amounts related to restricted
                                      property or nonqualified options.

                           (iii)    MODIFIED SECTION 3121 COMPENSATION. "Wages"
as defined in Code Section 3121 for Federal Insurance Contributions Act
purposes, without regard to the limit set forth in Code Section 3121(a)(1) and
without regard to any rules that relate to the nature or location of the
employment or the services performed, which generally is all taxable
remuneration paid to the employee in cash or in kind for the performance of
services as a Covered Employee for a Participating Company including taxable
expense reimbursements, moving expenses, fringe benefits, and welfare benefits
and generally excludes all nontaxable fringe benefits, welfare benefits and
employee benefits, except that:

                              (A)       Amounts contributed under a salary
                                        reduction agreement to a 401(k)
                                        arrangement, to a 403(b) annuity or a
                                        simplified employee pension plan are
                                        excluded from "compensation" even though
                                        included in wages under Code Section
                                        3121(v);

                                   DEFINITIONS
                                       2-4


<PAGE>   48



                              (B)       Amounts attributable to nonqualified
                                        deferred compensation are excluded from
                                        "compensation" even though included in
                                        wages under Code Section 3121(v);

                              (C)       Amounts paid to an employee for medical
                                        or hospital expenses in connection with
                                        sickness or accident disability are
                                        excluded from "compensation" even though
                                        taxable;

                              (D)       Amounts paid to, or on behalf of, an
                                        employee on account of sickness or
                                        accident disability more than six months
                                        after the calendar month when the
                                        employee last worked for a member of the
                                        Controlled Group are excluded from
                                        "compensation" even though taxable; and

                              (E)       Tips paid in any medium other than cash
                                        are excluded from "compensation" even
                                        though taxable.

                         (iv) MODIFIED SECTION 3401 COMPENSATION. "Wages"
as defined in Code Section 3401(a) for income tax withholding purposes, without
regard to any rules that relate to the nature or location of the employment or
the services performed, which generally is all taxable remuneration paid to the
employee in cash or in kind for the performance of services as a Covered
Employee for a Participating Company including taxable expense reimbursements,
moving expenses, fringe benefits, and welfare benefits and generally excludes
all nontaxable fringe benefits, welfare benefits and employee benefits, except
that:

                              (A)       Amounts paid for group term life
                                        insurance are excluded from
                                        "compensation" even though taxable; and

                              (B)       Tips paid in any medium other than cash
                                        are excluded from "compensation" even
                                        though taxable.

                                   DEFINITIONS
                                       2-5


<PAGE>   49



                              (v) W-2 EARNINGS. Remuneration which is received
by an employee in cash or in kind for the performance of services as a Covered
Employee for a Participating Company and which must be reported as wages on the
employee's Form W-2 for income tax purposes.

                         (b) SAFE HARBOR ADJUSTMENTS TO COMPENSATION. To the
extent elected in Section (16) of the Adoption Agreement, the following
adjustments will be made to the "compensation" of an employee:

                              (i) Compensation shall be increased for salary
reduction amounts which are excluded from the taxable income of the employee
under Code Sections 125, 402(a)(8) and 402(h).

                             (ii) Compensation shall be reduced by all of the
following amounts even if they are taxable to the employee:

                                 (A)       expense reimbursements, expense
                                           allowances or moving expenses;

                                 (B)       cash and noncash fringe benefits and
                                           welfare benefits; and

                                 (C)       deferred compensation.

                         (c) COMPENSATION LIMIT. In addition to other applicable
limitations set forth in the Trust and Plan, and notwithstanding any other
provision of the Trust and Plan to the contrary, for plan years beginning on
or after January 1, 1994, the annual compensation of each employee taken into
account under the Trust and Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance

                                   DEFINITIONS
                                       2-6


<PAGE>   50



with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding twelve (12) months,
over which compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than twelve (12)
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is twelve (12).

                For plan years beginning on or after January 1, 1994, any
reference in this Trust and Plan to the limitation under Section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.

                If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.

                Notwithstanding the foregoing, the maximum compensation of any
highly compensated employee that can be considered for any purpose under this
Trust and Plan for any plan year commencing prior to January 1, 1994 shall be
Two Hundred Thousand Dollars ($200,000.00) plus such adjustments for increases
in the cost of

                                   DEFINITIONS
                                       2-7


<PAGE>   51



living as shall be prescribed by the Secretary of the Treasury pursuant to
Section 401(a)(17) of the Code.

                In determining the limit on compensation set forth in this
paragraph (c), the family aggregation rules contained in Section 414(q)(6) of
the Code and any lawful regulations thereunder shall apply, except that in
applying such rules, the term "family" shall include only the spouse of the
employee and any lineal descendants of the employee who have not attained age
nineteen (19) before the close of the plan year. If, as a result of the
application of such family aggregation rules, the limit on compensation set
forth above is exceeded, the limit shall apply to the affected family members'
compensation as follows:

                (i) If this Trust and Plan is not integrated pursuant to
Sections (17)(a) and (18)(a) of the Adoption Agreement, the amount of each
family member's compensation which shall count toward the limit shall equal that
portion of the limit which bears the same relationship to the limit as such
family member's compensation, determined under this Section 2.11 prior to the
application of such compensation limit ("unlimited compensation"), bears to the
total unlimited compensation of all the family members.

                (ii) If this Trust and Plan is integrated pursuant to Sections
(17)(a) and (18)(a) of the Adoption Agreement:

                    (A)       the entire amount of each family member's
                              compensation up to the taxable wage base shall
                              count toward the limit; and

                    (B)       the amount of each family member's compensation in
                              excess of the taxable

                                   DEFINITIONS
                                       2-8


<PAGE>   52



                              wage base which shall count toward the limit shall
                              equal that portion of the limit remaining, after
                              taking into account the compensation in (A) above,
                              which bears the same relationship to the limit
                              remaining as such family member's compensation, as
                              determined under this Section 2.11 prior to the
                              application of such compensation limit ("unlimited
                              compensation"), bears to the total unlimited
                              compensation of all the family members.

The amount of compensation for any plan year shall be determined as of the last
day of such year.

                (d) COMPENSATION WITH RESPECT TO SELF-EMPLOYED INDIVIDUALS. For
any self-employed individual covered under the Trust and Plan, compensation
means earned income.

                2.12 CONTROLLED GROUP. The words "Controlled Group" shall mean
the Company and all corporations or business organizations which are members of
a controlled group of corporations, as defined in Section 414(b) of the Code, a
controlled group of trades or businesses, as defined in Section 414(c) of the
Code, an affiliated service group, as defined in Section 414(m) of the Code, or
any other arrangements as defined in regulations under Section 414(o) of the
Code of which the Company is a part but, in each case, only during the periods
any such corporation or business organization is so defined.

                2.13 COVERED EMPLOYEE. The words "Covered Employee" shall mean
any employee of a Participating Company designated as a Covered Employee
pursuant to Section (12) of the Adoption Agreement.

                                   DEFINITIONS
                                       2-9


<PAGE>   53



                2.14 DATE OF HIRE. The words "date of hire" shall mean the date
on which an employee commences employment and works at least one (1) hour of
service for a member of the Controlled Group and shall mean, in the case of a
rehired employee, the first date following his previous termination of
employment on which he works at least one (1) of service hour for a member of
the Controlled Group.

                2.15 DISTRIBUTION ACCOUNT. The words "distribution account"
shall mean, with respect to a participant whose employment has terminated for a
reason other than his death, disability or retirement, an account which had been
an employer contribution or match account during his previous period of
participation, after said accounts shall have been debited by the amounts, if
any, forfeited pursuant to Section 15.3 hereof, and which, pursuant to Article
XV hereof, shall have been converted into a "distribution account."

                2.16 EARNED INCOME. The words "earned income" shall mean net
earnings from self-employment in the trade or business with respect to which the
Trust and Plan is established, provided the personal services of the individual
are a material income producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions allocable to
such items. Net earnings are reduced by contributions made by a member of the
Controlled Group to a qualified plan to the extent deductible under Section 404
of the Code. Net earnings are also determined taking into account the deduction
allowed to a member of

                                   DEFINITIONS
                                      2-10


<PAGE>   54



the Controlled Group by Section 164(f) of the Code for taxable years beginning
after December 31, 1989.

                2.17 EFFECTIVE DATE. The words "effective date" of this Trust
and Plan shall mean the date specified in Section (7) of the Adoption Agreement.

                2.18 EMPLOYEE. The word "employee" shall mean any person
employed in the trade, business or profession of a member of the Controlled
Group, including any common-law employee, owner-employee or partner-employee.
The word "employee" shall not include any person who renders service to a member
of the Controlled Group solely as a director or independent contractor. The word
"employee" shall also include any Leased Employee deemed to be an employee of
the Controlled Group as provided in Section 414(n) or (o) of the Code.

                2.19 ERISA. The acronym "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.

                2.20 EXCESS COMPENSATION. The words "excess compensation"
shall mean for any participant compensation in excess of the integration level
specified in Section (18)(a) of the Adoption Agreement.

                2.21 HIGHLY COMPENSATED EMPLOYEE. The words "highly compensated
employee" shall mean an employee or a former employee who is highly compensated
for a plan year as described in Section 414(q) of the Code, which is hereby
incorporated by reference. A highly compensated employee is described for
informational purposes herein as an employee during a plan year if either:

                                   DEFINITIONS
                                      2-11


<PAGE>   55



          (a)       during the preceding plan year, he:

                    (i)       was at any time a five percent (5%) or more actual
                              or constructive owner of a member of the
                              Controlled Group;

                    (ii)      received Total Remuneration from the Controlled
                              Group greater than Seventy-Five Thousand Dollars
                              ($75,000.00) (plus any increase for cost of living
                              after 1987 as determined by the Secretary of the
                              Treasury or his delegate);

                    (iii)     received Total Remuneration from the Controlled
                              Group greater than Fifty Thousand Dollars
                              ($50,000.00) (plus any increase for cost of living
                              after 1987 as determined by the Secretary of the
                              Treasury or his delegate) and was in the "top paid
                              group" of employees of the Controlled Group for
                              such plan year; or

                    (iv)      was at any time an officer of a member of the
                              Controlled Group and received Total Remuneration
                              greater than Forty-Five Thousand Dollars
                              ($45,000.00) or, if greater, fifty percent (50%)
                              of the amount specified in Section 415(b)(1)(A) of
                              the Code for such plan year (plus any increase for
                              cost of living after 1987 as determined by the
                              Secretary of the Treasury or his delegate); or

          (b)       during the current plan year, he either:

                    (i)       was at any time a five percent (5%) or more actual
                              or constructive owner of a member of the
                              Controlled Group; or

                    (ii)      was one of the one hundred (100) highest paid
                              employees of the Controlled Group for the current
                              plan year and meets the requirements of (a)(ii),
                              (a)(iii) or (a)(iv) above for the current plan
                              year.

                For purposes of determining the members of the "top paid group"
under subsection (a)(iii) above, an employee is a member of the top paid group
for any plan year if for such plan year the employee is a member of a group
consisting of the top paid twenty percent (20%) of employees of the Controlled
Group ranked on the

                                   DEFINITIONS
                                      2-12


<PAGE>   56



basis of Total Remuneration from the Controlled Group paid during the plan year.
In determining the members of the top paid group, the following employees shall
be excluded:

                (A)        employees who have not completed six (6) months of
                           service;

                (B)        employees who normally work less than seventeen and
                           one-half (17-1/2) hours per week;

                (C)        employees who normally work during not more than
                           six (6) months during any year;

                (D)        employees who have not attained age twenty-one
                           (21);

                (E)        except to the extent provided in regulations,
                           employees who are included in a unit of employees
                           covered by an agreement which the Secretary of Labor
                           finds to be a collective bargaining agreement between
                           employee representatives and a member of the
                           Controlled Group; and

                (F)        employees who are nonresident aliens and who receive
                           no earned income (within the meaning of Section
                           911(d)(2) of the Code) from the Controlled Group
                           which constitutes income from sources within the
                           United States (within the meaning of Section
                           861(a)(3) of the Code).

The Company may elect (in such manner as may be provided by the Secretary of the
Treasury or his delegate) to apply subsections (A), (B), (C), or (D) above by
substituting a shorter period of service, smaller number of hours or months, or
lower age for the period of service, number of hours or months, or age (as the
case may be) than that specified in such subsection.

                For purposes of determining the number and identity of
"officers" in subsection (a)(iv) above:

                (1)        The total number of employees treated as officers
                           shall be limited to the lesser of:

                           (I)    fifty (50); or

                                   DEFINITIONS
                                      2-13


<PAGE>   57




                    (II)      the greater of three (3) employees or ten percent
                              (10%) of all employees of the Controlled Group;
                              but

          (2)       If no employee would be described as an officer pursuant to
                    subsection (a)(iv), the highest paid officer shall be
                    treated as described in such subsection.

          A highly compensated former employee is described for informational
purposes herein as a former employee if either:

          (a)       such former employee was a highly compensated employee when
                    such former employee terminated his employment; or

          (b)       such former employee was a highly compensated employee at
                    any time after attaining age fifty-five (55).

          If any individual is a member of the family of a five percent (5%)
owner or of a highly compensated employee in the group consisting of the ten
(10) highly compensated employees paid the greatest Total Remuneration by the
Controlled Group during the plan year, then for purposes of any Section of this
Trust and Plan which uses the term highly compensated employee, (A) such
individual shall not be considered a separate employee, and (B) any such Total
Remuneration paid to such individual by the Controlled Group (and any applicable
contribution or benefit on behalf of such individual) shall be treated as if it
were paid to (or on behalf of) the highly compensated employee. For purposes of
the foregoing, the word "family" shall mean, with respect to any employee, such
employee's spouse and lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants. Notwithstanding the foregoing, for purposes of
Section 2.11(c) of this Trust and Plan, the word "family" shall

                                   DEFINITIONS
                                      2-14


<PAGE>   58



only include the employee's spouse and lineal descendants under age
nineteen (19).

          2.22 INTEGRATION LEVEL. The words "integration level" shall mean a
percentage of the taxable wage base or other dollar amount, specified in Section
(18)(a) of the Adoption Agreement.

          2.23 LEASED EMPLOYEE. The words "Leased Employee" shall mean any
individual (other than an employee of a Participating Company) who, pursuant to
an agreement between the Participating Company and any leasing organization, has
performed services for the Company or for the Participating Company and related
persons, as determined in accordance with Section 414(n)(6) of the Code, on a
substantially full-time basis for a period of at least one (1) year; provided,
however, that such services are of a type historically performed by employees in
the business field of the Participating Company. Contributions or benefits
provided on behalf of a Leased Employee by the leasing organization which are
attributable to services performed for the Participating Company shall be
treated as provided by the Participating Company.

          A Leased employee shall not be considered an employee of a
Participating Company if:

          (a)       such employee is covered by a money purchase pension plan
                    which provides the following:

                    (i)       a nonintegrated employer contribution formula of
                              at least ten percent (10%) of a participant's
                              Total Remuneration, as defined in Section 2.39
                              hereof, together with amounts contributed on his
                              behalf pursuant to a salary reduction agreement
                              which are excludable from the employee's gross
                              income pursuant to Sections 125, 402(a)(8), 402(h)
                              or 403(b) of the Code;

                                   DEFINITIONS
                                      2-15


<PAGE>   59




                    (ii)      immediate participation in said money purchase
                              pension plan; and

                    (iii)     full and immediate vesting under said money
                              purchase pension plan; and

          (b)       Leased Employees do not constitute more than twenty percent
                    (20%) of the Participating Company's nonhighly compensated
                    employees.

          2.24 MILITARY SERVICE. The words "military service" shall mean duty in
the Armed Forces of the United States, whether voluntary or involuntary,
provided that the employee serves not more than one voluntary enlistment or tour
of duty, and further provided that such voluntary enlistment or tour of duty
does not follow involuntary duty.

          2.25 NET PROFITS. The words "net profits" shall mean the amount of net
profit earned by a Participating Company during a particular taxable year or
years of such Participating Company, as shown on the financial statements of
such Participating Company and as calculated in accordance with generally
accepted accounting principles, before provision for contributions hereunder for
the current taxable year and before provision for any taxes based upon income.

          2.26 NORMAL RETIREMENT DATE. The words "normal retirement date"
shall mean the date specified in Section (25) of the Adoption Agreement.

          2.27 OWNER-EMPLOYEE. The word "owner-employee" shall mean a sole
proprietor or a partner who owns more than ten percent (10%) of either the
capital or profits interest of a partnership.

                                   DEFINITIONS
                                      2-16


<PAGE>   60



          2.28 PARTICIPANT. The word "participant" shall mean any person who
becomes a participant in this Trust and Plan in accordance with Article IV
hereof. A person shall cease to be a participant upon his termination of
employment.

          2.29 PARTNER-EMPLOYEE. The word "partner-employee" shall mean a
partner who owns ten percent (10%) or less of either the capital or profits
interest of a partnership.

          2.30 PERMANENT AND TOTAL DISABILITY. The words "permanent and total
disability" and "disability" shall have the meaning set forth in the definition
below which has been specified in Section (27) of the Adoption Agreement.

          (a) SOCIAL SECURITY DEFINITION. Under this definition, "permanent and
total disability" and "disability" shall mean any disability which entitles the
participant to disability retirement benefits under the United States Social
Security Act.

          (b) ALTERNATIVE DEFINITION. Under this definition, "permanent and
total disability" and "disability" shall mean any disability which continuously
disables and wholly prevents a participant from performing the duties of his
occupation and which is expected to be of permanent duration, except that no
participant shall be deemed to be permanently and totally disabled if such
disability was (i) contracted, suffered or incurred while the participant was
engaged in, or resulted from his having engaged in, a criminal act or enterprise
or (ii) resulted from his habitual drunkenness or addiction to narcotics or
(iii) resulted from any intentionally self-inflicted injury.

                                   DEFINITIONS
                                      2-17


<PAGE>   61



          2.31 PERSONAL ACCOUNTS. The words "personal accounts" shall mean
pre-87 after tax accounts, post-86 after tax accounts, pre-87 IRA accounts and
rollover accounts.

          2.32 PLAN YEAR. The words "plan year" shall mean the twelve (12)
consecutive month period specified in Section (10) of the Adoption Agreement.
Where the context so requires, "plan year" shall also mean the twelve (12) month
period specified in Section (10) of the Adoption Agreement relating to a prior
period or periods.

          2.33 QUALIFIED NONELECTIVE CONTRIBUTION. The words "qualified
nonelective contribution" shall mean any special ADP contribution, together with
any employer contribution and matching contribution which satisfies the
requirements of Section 401(m)(4)(C) of the Code and regulations issued
thereunder.

          2.34 RELATED EMPLOYER. The words "Related Employer" shall mean a
corporation or other business organization which, when aggregated with any
Participating Company, would be a single employer within the meaning of Sections
414(b), (c), (m) and (o) of the Code, if the phrase "more than fifty percent
(50%)" is substituted for the phrase "at least eighty percent (80%)" where the
latter phrase is applicable under such Sections, but in each case, only during
the periods any such corporation or business organization would be so defined.

          2.35 RESTATEMENT DATE. The words "restatement date" shall mean the
date, if any, specified in Section (8) of the Adoption Agreement.

                                   DEFINITIONS
                                      2-18


<PAGE>   62



          2.36 SELF-EMPLOYED INDIVIDUAL. The words "self-employed individual"
shall mean an individual who has earned income for the taxable year with respect
to which the Trust and Plan is established, as well as an individual who would
have had earned income but for the fact that the trade or business had no net
profits for the taxable year.

          2.37 TAXABLE WAGE BASE. The words "taxable wage base" shall mean, with
respect to any plan year, the maximum amount of compensation which may be
considered wages for said plan year under Section 3121(a) of the Code in effect
as of the beginning of the plan year.

          2.38 TAXABLE YEAR. The words "taxable year" shall mean the annual
accounting period of the Company, as specified in Section (9) of the Adoption
Agreement.

          2.39 TOTAL REMUNERATION. The words "Total Remuneration" shall mean,
for any participant, his Section 415 Compensation as defined in Section
2.11(a)(1) of this Trust and Plan which is paid to him by a Participating
Company or any Related Employer.

          2.40 TRUST AND PLAN. The words "Trust and Plan" shall mean for each
Participating Company this instrument, together with the Adoption Agreement, as
originally executed, and as it or they may be amended from time to time.

          2.41 TRUSTEE. The word "Trustee" shall mean the Trustee designated
pursuant to Section (37) of the Adoption Agreement and any successor Trustee or
Trustees.

                                   DEFINITIONS
                                      2-19


<PAGE>   63



          2.42 VESTED INTEREST. The words "vested interest" shall mean, with
respect to any participant, (a) plus (b) minus (c) where:

          (a)       equals the amount, if any, then credited to all pre-tax,
                    special ADP, and distribution accounts maintained on his
                    behalf;

          (b)       equals the sum of:

                    (i)       the amount credited to his employer contribution
                              and match accounts multiplied by his applicable
                              Vested Percentage; plus

                    (ii)      any distributions to the participant or
                              withdrawals by the participant made from his
                              employer contribution and match accounts since his
                              earliest date of hire which has not been followed
                              by five (5) consecutive One Year Breaks In
                              Service, multiplied by his applicable Vested
                              Percentage; and

          (c)       equals the amount of any distributions to the participant or
                    withdrawals by the participant made from his employer
                    contribution and match accounts since his earliest date of
                    hire which has not been followed by five (5) consecutive One
                    Year Breaks In Service.

          2.43 VESTED PERCENTAGE. The words "Vested Percentage" shall mean for
any participant the percentage determined on the basis of his number of years of
vesting service in accordance with the vesting alternative specified in Sections
(20) and (21) of the Adoption Agreement. Notwithstanding any other provision of
this Trust and Plan to the contrary, upon attainment of his normal retirement
date and during all periods thereafter, a participant shall have a Vested
Percentage of one hundred percent (100%).

          2.44 OTHER TERMS DEFINED. Other terms are defined elsewhere in this
Trust and Plan and in the Adoption Agreement

                                   DEFINITIONS
                                      2-20

<PAGE>   64



hereto.  Such terms and the locations of their definitions are:
<TABLE>
<CAPTION>
<S>                                                                   <C>
          (a)    active participant                                    sec. 4.4, Plan
          (b)    Administrator                                         sec. 38, Ad.Ag.
          (c)    Adoption Date                                         sec. 1, Ad.Ag.
          (d)    aggregate limit                                       sec. 8.5, Plan
          (e)    alternate payee                                       sec. 22.1, Plan
          (f)    annual additions                                      sec. 24.1, Plan
          (g)    compensation                                          sec. 16, Ad.Ag.
          (h)    contribution percentage                               sec. 8.4, Plan
          (i)    Covered Employee                                      sec. 12, Ad.Ag.
          (j)    death beneficiary                                     sec. 17.4, Plan
          (k)    deferral percentage                                   sec. 8.3, Plan
          (l)    defined benefit plan fraction                         sec. 24.1, Plan
          (m)    defined contribution
                    plan fraction                                      sec. 24.1, Plan
          (n)    determination date                                    sec. 23.2, Plan
          (o)    domestic relations order                              sec. 22.1 Plan
          (p)    early retirement date                                 sec. 26, Ad.Ag.
          (q)    effective date                                        sec. 7, Ad.Ag.
          (r)    entry date                                            sec. 15, Ad.Ag.
          (s)    family member                                         sec. 2.21, Plan
          (t)    hour(s) of service                                    secs. 3.1, 3.2, Plan
          (u)    inactive participant                                  sec. 4.4, Plan
          (v)    key employee                                          sec. 23.2, Plan
          (w)    limitation year                                       sec. 11, Ad.Ag.
          (x)    match period                                          sec. 17(a)(ii), Ad.Ag.
          (y)    Maximum Permitted Disparity                           sec. 6.2(c), Plan
          (z)    non-key employee                                      sec. 23.2, Plan
         (aa)    normal retirement date                                sec. 25, Ad.Ag.
         (bb)    One Year Break In Service                             secs. 3.1, 3.2, Plan
         (cc)    Participating Company                                 sec. 6, Ad.Ag.
         (dd)    period of service                                     sec. 3.1, Plan
         (ee)    period of severance                                   sec. 3.1, Plan
         (ff)    permanent and total disability                        sec. 27, Ad.Ag.
         (gg)    permissive aggregation group                          sec. 23.2, Plan
         (hh)    Plan No.                                              sec. 3, Ad.Ag.
         (ii)    plan year                                             sec. 10, Ad.Ag.
         (jj)    Predecessor Plan                                      sec. 2, Ad.Ag.
         (kk)    present value                                         sec. 23.2, Plan;
                                                                       sec. 40(b), Ad.Ag.
         (ll)    Projected Annual Benefit                              sec. 24.1, Plan
         (mm)    qualified domestic relations
                    order                                              sec. 22.1, Plan
         (nn)    required aggregation group                            sec. 23.2, Plan
         (oo)    Related Companies                                     sec. 5, Ad.Ag.
         (pp)    restatement date                                      sec. 8, Ad.Ag.
         (qq)    Service                                               sec. 13, Ad.Ag.
         (rr)    Shareholder-Employee                                  sec. 12.4, Plan
         (ss)    Sponsor                                               sec. 43, Ad.Ag.
         (tt)    taxable year                                          sec. 9, Ad.Ag.
         (uu)    termination of employment                             secs. 3.1, 3.2, Plan
</TABLE>

                                   DEFINITIONS
                                      2-21


<PAGE>   65


<TABLE>
<CAPTION>
<S>                                                                    <C>
          (vv)    top-heavy group                                         sec. 23.2, Plan
          (ww)    Trustee                                                 sec. 37, Ad.Ag.
          (xx)    valuation date                                          sec. 23.2, Plan;
                                                                          sec. 40(c), Ad.Ag.
          (yy)    Vested Percentage                                       secs. 20, 21, Ad.Ag.
          (zz)    vesting service                                         secs. 3.1, sec. 3.2, Plan,
                                                                          sec. 13(b), (22),
                                                                          Ad.Ag.
         (aaa)    year of service                                         secs. 3.1, 3.2, Plan
</TABLE>

                                   DEFINITIONS
                                      2-22


<PAGE>   66



                                   ARTICLE III
                                   -----------

                                     SERVICE
                                     -------

          3.1 SERVICE BASED ON THE ELAPSED TIME METHOD. If the Company shall
elect, pursuant to Section (13) of the Adoption Agreement, to calculate service
for purposes of this Trust and Plan based on the elapsed time method, the
following definitions shall apply:

          (a) HOUR OF SERVICE. The words "hour of service" or "hour" shall mean
for any employee an hour for which he is directly or indirectly paid or entitled
to payment by a member of the Controlled Group for the performance of duties
either as regular wages, salary or commissions or pursuant to an award or
agreement requiring a member of the Controlled Group to pay back wages,
irrespective of mitigation of damages.

          (b) ONE YEAR BREAK IN SERVICE. The words "One Year Break In Service"
shall mean for any employee or former employee a twelve (12) month period of
severance commencing on his termination of employment or any anniversary
thereof.

          (c) PERIOD OF SERVICE. The words "period of service" shall mean for
any employee any period during which he is or was employed by a member of the
Controlled Group. Each such period shall be measured from his date of hire to
the date of termination of employment which follows such date of hire.

          In addition, if any employee is rehired within twelve (12) months of:

                               ELAPSED TIME METHOD
                                       3-1


<PAGE>   67



          (A)       the date of his termination of employment; or

          (B)       if earlier, the first day of any period of leave of absence,
                    layoff, or military service after the end of which the
                    employee did not return to work for a member of the
                    Controlled Group prior to his termination of employment,

such employee's "period of service" shall include the period of severance
measured from his date of termination of employment until his subsequent date of
rehire.

          Two or more periods of service or periods of severance that are
included in an employee's service and that contain fractions of a year (computed
in months and days) shall be aggregated on the basis of twelve (12) months
constituting a year and thirty (30) days constituting a month.

         (d) PERIOD OF SEVERANCE. The words "period of severance" shall
mean, with respect to an employee or former employee, a period commencing on his
termination of employment and ending on the date such employee is rehired by a
member of the Controlled Group. In the event of the termination of employment of
an employee, on or after the first day of the plan year which commenced or would
have commenced during 1985, by reason of either:

          (i)       the pregnancy of such employee; or

         (ii)       the birth of a child of such employee; or

        (iii)       the placement of a child with such employee in connection
                    with the adoption of such child by such employee; or

         (iv)       caring for such child for a period beginning immediately
                    following such birth or placement;

                               ELAPSED TIME METHOD
                                       3-2


<PAGE>   68



such employee's period of severance shall be deemed to have commenced on the
first anniversary of the last day he actually performed services for a member of
the Controlled Group. The Administrator may require any employee who is absent
from work by reason of any such pregnancy, birth or placement to furnish to the
Administrator such timely information as the Administrator may reasonably
require to establish that the employee's absence from work was by reason of such
pregnancy, birth or placement.

          (e) TERMINATION OF EMPLOYMENT. The words "termination of employment"
shall mean for any employee the occurrence of any one of the following events:

          (i)       he is discharged by a member of the Controlled Group unless
                    he is subsequently reemployed and given pay back to his date
                    of discharge;

         (ii)       he voluntarily terminates employment with a member of the
                    Controlled Group;

        (iii)       he retires from employment with a member of the Controlled
                    Group;

         (iv)       he fails to return to work at the end of any leave of
                    absence authorized by a member of the Controlled Group, or
                    within ninety (90) days following such employee's release
                    from military service or within any other period following
                    military service in which his right to reemployment with a
                    member of the Controlled Group is guaranteed by law, or
                    within three (3) days after he has been recalled to work
                    following a period of layoff;

          (v)       he has been continuously laid-off for six (6) months; or

         (vi)       he fails to return to work after the cessation of disability
                    income payments under any sick leave, short term disability
                    program or long term disability program of a member of the
                    Controlled Group.

                               ELAPSED TIME METHOD
                                       3-3


<PAGE>   69



In the case of the occurrence of any event described in (iv) or (v) of this
Section 3.1(e), the date of such employee's termination of employment shall be
deemed to be the earlier of (A) the first anniversary of the first day of any
such period of leave of absence, layoff, or military service, or (B) the last
day of any such period of leave of absence, layoff or military service.

          (f) VESTING SERVICE. The words "vesting service" shall mean, for any
employee, the aggregate of all his periods of service, excluding any periods of
service as the Company shall designate pursuant to Section (22) of the Adoption
Agreement and excluding any period of service that a rehired employee had prior
to his most recent termination of employment, determined as of such date of
termination of employment pursuant to this Section 3.1(f), provided that:

          (i)       such rehired employee did not have a vested interest under
                    this Trust and Plan on such date of termination of
                    employment;

         (ii)       such rehired employee has had a period of severance which
                    equals or exceeds five (5) years; and

        (iii)       the period of such rehired employee's vesting service is
                    less than or equal to his period of severance.

          (g) YEAR OF SERVICE. The words "year of service" shall mean for any
employee a twelve (12) month period of service.

          3.2 SERVICE BASED ON THE HOURS METHOD. If the Company shall elect,
pursuant to Section (13) of the Adoption Agreement,

                                  HOURS METHOD
                                       3-4


<PAGE>   70



to calculate service for purposes of this Trust and Plan based on the hours
method, the following definitions shall apply:

          (a) HOURS OF SERVICE. The words "hours of service" or "hours" shall
mean for any employee the actual number of hours for which he is directly or
indirectly paid or entitled to payment by a member of the Controlled Group for
the performance of duties either as regular wages, salary or commissions, or for
reasons other than the performance of duties such as vacation or holiday pay,
and in either case, including payments pursuant to an award or agreement
requiring a member of the Controlled Group to pay back wages, irrespective of
mitigation of damages. Hours of service under this paragraph shall be calculated
and credited pursuant to Section 2530.200b-2(b) and (c) of the Department of
Labor Regulations which are incorporated herein by reference. Notwithstanding
the foregoing,

          (i)       no employee shall be credited with more than 501 hours of
                    service with respect to payments he receives or is entitled
                    to receive during any single continuous period during which
                    he performs no services for a member of the Controlled Group
                    (irrespective of whether he has terminated employment) due
                    to vacation, holiday, illness, incapacity (including
                    disability), layoff, jury duty, military duty, or leave of
                    absence;

         (ii)       no employee shall be credited with hours of service with
                    respect to payments he receives or is entitled to receive
                    during a period when he performs no services for a member of
                    the Controlled Group under a plan maintained solely for the
                    purpose of complying with applicable workers' compensation,
                    unemployment compensation, disability insurance or Federal
                    Social Security laws; and

        (iii)       no employee or former employee shall be credited with hours
                    of service with respect to payments he

                                  HOURS METHOD
                                       3-5


<PAGE>   71



                    receives or is entitled to receive under a pension benefit
                    plan to which a member of the Controlled Group has
                    contributed during a period when he performs no services for
                    a member of the Controlled Group.

               (b) ONE YEAR BREAK IN SERVICE. The words "One Year Break In
Service" shall mean for any employee or former employee a plan year, ending
after his termination of employment, during which the employee or former
employee did not complete more than five hundred (500) hours of service for a
member of the Controlled Group. Notwithstanding the foregoing provisions of this
Section 3.2(b), in the event any employee is absent from work, on or after the
first day of the plan year which commenced in 1985, by reason of either:

               (i)       the pregnancy of such employee; or

              (ii)       the birth of a child of such employee; or

             (iii)       the placement of a child with such employee in
                         connection with the adoption of such child by such
                         employee; or

              (iv)       caring for such child for a period beginning
                         immediately following such birth or placement;

such employee shall, solely for the purposes of determining whether such
employee has incurred a One Year Break In Service pursuant to this Section
3.2(b), be credited either with the hours of service which otherwise would
normally have been credited to such employee but for such absence or, in any
case in which the Administrator is unable to determine the hours described in
the preceding clause, eight (8) hours per day of such absence; provided,
however, that the total number of hours of service which an employee may be
credited with by reason of

                                  HOURS METHOD
                                       3-6


<PAGE>   72



any such pregnancy, birth or placement shall not exceed five hundred one (501)
hours. An employee shall be credited with the hours of service described in the
preceding sentence only in the plan year in which the absence from work begins
if the employee would be prevented from incurring a One Year Break In Service in
such plan year solely because the employee is credited with hours of service
pursuant to the preceding sentence or, in any other case, in the immediately
following plan year. The Administrator may require any employee who is absent
from work because of any such pregnancy, birth or placement to furnish to the
Administrator such timely information as the Administrator may reasonably
require to establish both that the employee's absence from work is because of
such pregnancy, birth or placement and the number of days during which the
employee was absent because of such pregnancy, birth or placement.

          (c) TERMINATION OF EMPLOYMENT. The words "termination of employment"
shall mean for any employee the occurrence of any one of the following events:

          (i)       he is discharged by a member of the Controlled Group unless
                    he is subsequently reemployed and given pay back to his date
                    of discharge;

          (ii)      he voluntarily terminates employment with a member of the
                    Controlled Group;

          (iii)     he retires from employment with a member of the Controlled
                    Group;

          (iv)      he fails to return to work at the end of any leave of
                    absence authorized by a member of the Controlled Group, or
                    within ninety (90) days following such employee's release
                    from military service or within any other period following
                    military service in which his right to

                                  HOURS METHOD
                                       3-7


<PAGE>   73



                    reemployment with a member of the Controlled Group is
                    guaranteed by law, or within three (3) days after he has
                    been recalled to work following a period of layoff;

          (v)       he has been continuously laid-off for six (6) months; or

          (vi)      he fails to return to work after the cessation of disability
                    income payments under any sick leave, short term disability
                    program or long term disability program of a member of the
                    Controlled Group.

In the case of the occurrence of any event described in (iv) or (v) of this
Section 3.2(c), the date of such employee's termination of employment shall be
deemed to be the first day of any such period of leave of absence, layoff, or
military service.

          (d) VESTING SERVICE. The words "vesting service" shall mean for any
employee the number of plan years during which the employee has been or was
previously employed by a member of the Controlled Group, excluding any plan
years during which the employee does not complete at least one thousand (1,000)
hours of service for a member of the Controlled Group, excluding such plan years
are specified in Section (22) of the Adoption Agreement and excluding any years
of vesting service which a rehired employee had prior to the date of his most
recent termination of employment, determined as of such date of termination of
employment pursuant to this Section 3.2(d), provided that:

          (i)       such rehired employee did not have a vested interest under
                    this Trust and Plan on such date of termination of
                    employment;

          (ii)      such rehired employee has had at least five (5) consecutive
                    One Year Breaks In Service since the last day of such
                    vesting service; and

                                  HOURS METHOD
                                       3-8


<PAGE>   74



          (iii)     the number of years of such rehired employee's vesting
                    service is less than or equal to the number of consecutive
                    One Year Breaks In Service which he had after the last day
                    of such vesting service.

                (e) YEAR OF SERVICE. The words "year of service" shall mean for
any employee a twelve (12) month period commencing on such employee's date of
hire or on the first day of any plan year commencing thereafter during which the
employee has been or was previously employed by a member of the Controlled
Group, excluding any such years of service during which the employee completed
less than one thousand (1,000) hours of service for a member of the Controlled
Group.

                For purposes of determining a "year of service," pursuant to
this Section 3.2(e), the initial twelve (12) month period measured from an
employee's date of hire shall overlap the first plan year following his date of
hire. Thus, if an employee completes at least one thousand (1,000) hours of
service during both the initial twelve (12) month period and the overlapping
plan year, he shall be deemed to have two (2) years of service as of the last
day of such plan year.

                3.3 SERVICE WITH PREDECESSOR EMPLOYER. Unless otherwise excluded
pursuant to the Company's election in Section (22) of the Adoption Agreement,
service with a predecessor employer prior to the acquisition by the Controlled
Group of such predecessor employer shall be treated as service for the
Controlled Group. Notwithstanding a contrary election in Section (22) of the
Adoption Agreement, however, if the pre-

                                  HOURS METHOD
                                       3-9


<PAGE>   75



decessor employer maintained a qualified plan at any time within five (5) years
prior to the adoption of this Trust and Plan, service with a predecessor
employer must be treated as service for the Controlled Group.

                                  HOURS METHOD
                                      3-10


<PAGE>   76



                                   ARTICLE IV
                                   ----------

                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

                4.1 ELIGIBILITY REQUIREMENTS. Each Covered Employee shall be
eligible to become a participant under this Trust and Plan when he has met the
eligibility requirements set forth in Section (14) of the Adoption Agreement.

                4.2 ENTRY DATE. Every Covered Employee who may become eligible
to participate in this Trust and Plan shall automatically become a participant
as of the entry date, as set forth in Section (15) of the Adoption Agreement,
coinciding with or next following his eligibility, provided he remains a Covered
Employee on such entry date.

                4.3 REEMPLOYMENT. In the event that a member of the Controlled
Group shall reemploy a former participant, such former participant shall
automatically become a participant in this Trust and Plan on his date of rehire.
In the event that a member of the Controlled Group shall reemploy a former
employee who was not a participant during his previous period of employment,
such employee must satisfy the requirements set forth in Section 4.1 hereof and
Section (14) of the Adoption Agreement before he shall become eligible to
participate in this Trust and Plan.

                4.4 ACTIVE AND INACTIVE PARTICIPANTS. A participant will be
considered to be an active participant during any period he is a Covered
Employee. If a participant ceases to be a Covered Employee but continues to be
an employee of a member of

                                   ELIGIBILITY
                                       4-1


<PAGE>   77



the Controlled Group, he will be an inactive participant during such period of
employment. An inactive participant who again becomes a Covered Employee shall
participate in the Trust and Plan immediately upon this change in status.

                                   ELIGIBILITY
                                       4-2


<PAGE>   78



                                    ARTICLE V
                                    ---------

                              PRE-TAX CONTRIBUTIONS
                              ---------------------

                5.1 ELECTION OF PRE-TAX CONTRIBUTIONS. If Section (17)(b) of the
Adoption Agreement permits pre-tax contributions, then, pursuant to a salary
reduction agreement, an active participant may elect that a stated portion of
his unpaid compensation for a plan year be paid by a Participating Company to
the Trustee hereunder and be treated as a contribution by the Participating
Company. A participant's election hereunder shall be in writing and shall be
conditioned upon:

          (a)       his right to defer the imposition of federal income tax on
                    such deferred compensation until a subsequent distribution
                    of such amount under this Trust and Plan; and

          (b)       the Participating Company's right to deduct such amount for
                    federal income tax purposes before taking into account any
                    contributions made by the Participating Company under
                    Article VI hereof and after taking into account any
                    contributions made by the Participating Company under any
                    other pension, profit sharing or stock bonus plans
                    maintained by the Participating Company which meet the
                    requirements of Section 401(a) of the Code.

                5.2 LIMITATIONS ON PRE-TAX CONTRIBUTIONS. The Administrator may,
from time to time, establish minimum and maximum limits for the amount of
pre-tax contributions that participants can make under this Trust and Plan. The
Administrator may establish maximum limitations which apply solely to highly
compensated employees. Any limitation, whether a maximum or a minimum, can be
either a stated dollar amount or a stated percentage of compensation.

                              PRE-TAX CONTRIBUTIONS
                                      5-1

<PAGE>   79



                5.3 CHANGES IN ELECTIONS. An election made by a participant
pursuant to Section 5.1 hereof shall continue in effect until changed or
revoked, notwithstanding any changes in the amount of such participant's
compensation. A participant may change the portion of his compensation to be
contributed to this Trust and Plan or suspend his contributions to this Trust
and Plan pursuant to Section 5.1 hereof at least one (1) time in each plan year,
at such times as the Company shall permit. A participant shall change or suspend
his election by providing such notice to the Administrator as the Administrator,
in its sole discretion, shall require.

                5.4 PAYMENT TO TRUSTEE. All pre-tax contributions made by a
participant pursuant to Section 5.1 above shall be paid to the Trustee in cash
as soon as reasonably possible after the reduction in the compensation of the
participant. In any event, such amounts shall be paid to the Trustee not later
than ninety (90) days after such compensation reductions are made.

                5.5 PRE-TAX ACCOUNTS. Any amounts contributed by a Participating
Company pursuant to a participant's election under Section 5.1 above shall be
held by the Trustee as a part of the Trust Fund created under this Trust and
Plan, shall be specifically allocated to a pre-tax account for the benefit of
such participant and shall be invested and reinvested, valued and administered
in accordance with the terms of this Trust and Plan. Any amounts credited to a
participant's pre-tax account shall be fully vested and nonforfeitable at all
times.

                              PRE-TAX CONTRIBUTIONS
                                       5-2


<PAGE>   80



                5.6 SUSPENSION OF PRE-TAX CONTRIBUTIONS. In the event a
participant receives a distribution from his pre-tax account as a result of
hardship as described in Article XIV, such participant's pre-tax contributions
under Section 5.1 above shall be suspended for a twelve (12) month period after
his receipt of such hardship distribution. In addition, for the taxable year of
the participant immediately following the participant's taxable year during
which said hardship distribution occurs, such participant shall be barred from
making pre-tax contributions in excess of (a) minus (b) below, where:

          (a)       equals Seven Thousand Dollars ($7,000.00) (plus any cost of
                    living increase after 1987 allowable under Section 402(g) of
                    the Code for such immediately following taxable year of the
                    participant); and

          (b)       equals the amount of such participant's pre-tax
                    contributions for the participant's taxable year during
                    which said hardship distribution is made.

                              PRE-TAX CONTRIBUTIONS
                                       5-3


<PAGE>   81



                                   ARTICLE VI
                                   ----------

                       PARTICIPATING COMPANY CONTRIBUTIONS
                       -----------------------------------

                6.1 TYPES OF CONTRIBUTIONS. For each plan year ending after the
effective date, a Participating Company shall make a contribution in cash or
other property, in addition to the pre-tax contributions described in Article V
hereof, to the extent required or permitted by Section (17) of the Adoption
Agreement. Discretionary Contributions shall be made from current net profits;
provided, however, that, effective for any plan year commencing on or after
January 1, 1986, if the Participating Company has no net profits for the taxable
year which includes the last day of the plan year for which such contribution is
to be made, it may nonetheless make a discretionary contribution if it is
specifically approved by its Board. At the time the Participating Company pays
the contribution to the Trustee, it shall notify the Trustee of the type of the
contribution, or portions thereof, from among the following listed categories:

          (a)       a profit sharing contribution or money purchase contribution
                    to be allocated among the employer contribution accounts of
                    eligible participants in accordance with Section 6.2 hereof;

          (b)       a matching contribution to be allocated among the match
                    accounts of eligible contributing participants in accordance
                    with Section 6.3 hereof; and

          (c)       a special ADP contribution to be allocated among the special
                    ADP accounts of eligible non-highly compensated participants
                    in accordance with Section 6.4 hereof.

                              COMPANY CONTRIBUTIONS
                                       6-1


<PAGE>   82



                6.2 EMPLOYER CONTRIBUTIONS. If Section (17)(a) of the Adoption
Agreement provides for profit sharing or money purchase contributions, any such
contributions by the Participating Companies shall be allocated among the
employer contribution accounts of all participants who were active participants
during the plan year, excluding any participants described in Section (19) of
the Adoption Agreement. Such contributions shall be allocated in the manner
specified in Section (18) of the Adoption Agreement as follows:

                (a) RELATIVE COMPENSATION. Under the relative compensation
method, such contributions shall be allocated to the employer contribution
account of each participant eligible to receive an allocation pursuant to this
Section 6.2 in an amount equal to that portion of the contribution which bears
the same relationship to such contribution as such participant's compensation
during the plan year bears to the total compensation of all such participants
during such plan year.

                (b) INTEGRATION METHOD. Under the integration method, such
contribution shall be allocated to the employer contribution accounts of each
participant eligible to receive an allocation pursuant to this Section 6.2 as
follows:

          (i)       contributions shall be allocated among participants in the
                    ratio that the sum of each participant's compensation and
                    compensation in excess of the Integration Level selected in
                    Section (18) of the Adoption Agreement bears to the sum of
                    all participants' compensation and compensation in excess of
                    the Integration Level, but not in excess of the Maximum
                    Permitted Disparity Rate determined as follows:


                              COMPANY CONTRIBUTIONS
                                       6-2


<PAGE>   83



<TABLE>
<CAPTION>
                                   Integration Level
                               Specified in Section (18)
                               Of The Adoption Agreement                        Maximum
                                As A Percentage of The                         Permitted
                                   Taxable Wage Base                           Disparity
                               -------------------------                       ---------
                             <S>                                              <C>
                                       0% To 20%                                  5.7%
                                     20.1% To 80%                                 4.3%
                                    80.1% To 99.9%                                5.4%
                                         100%                                     5.7%
</TABLE>

          (ii) the balance of the employer contribution of the Participating
               Companies shall be allocated among such participants in the ratio
               of their respective compensation.

           (c) PER CAPITA METHOD. Under the per capita method, such
contributions shall be allocated in equal amounts to the employer contribution
account of each participant eligible to receive an allocation pursuant to this
Section 6.2.

           (d) HOURS WORKED METHOD. Under the hours worked method, such
contributions shall be allocated to the employer contribution accounts of
participants eligible to receive an allocation pursuant to this Section 6.2 in
proportion to the hours of service, as defined in Section 3.1(a) of this Trust
and Plan, actually worked by each such eligible participant.

           6.3 MATCHING CONTRIBUTIONS. If Section (17)(a) of the Adoption
Agreement so provides, each Participating Company may make a matching
contribution to this Trust and Plan for each period specified in Section (17)(a)
of the Adoption Agreement. Such matching contribution, if any, shall be
allocated to the match account of each participant on whose behalf it is made.

           6.4 SPECIAL ADP CONTRIBUTION. If Section (17)(a) of the Adoption
Agreement so provides, a Participating Company may make a

                              COMPANY CONTRIBUTIONS
                                       6-3


<PAGE>   84



special ADP contribution to this Trust and Plan for any plan year. The amount of
such special contribution shall be determined by the Company from time to time.
Such amount, if any, shall be allocated to the special ADP accounts of some or
all of the participants who are not highly compensated employees in such manner
as the Company shall designate at the time any such special ADP contribution is
made to this Trust and Plan.

           6.5 PAYMENT TO TRUSTEE. The Participating Companies shall make the
contributions specified in Section 6.1 hereof, in cash or other property, to the
Trustee not later than the last day upon which they may make contributions under
this Trust and Plan and secure under the Code deductions of such contributions
in the computation of their federal income taxes for the taxable years which
include the last day of the plan year for which such contributions are made.

           6.6 ACCOUNTS. Any amounts contributed by the Participating Companies
pursuant to this Article VI shall be held by the Trustee as a part of the Trust
Fund created under this Trust and Plan, shall be specifically allocated to the
eligible participants' employer contribution accounts, match accounts or special
ADP accounts, as hereinbefore provided, for the benefit of such participants and
shall be invested and reinvested, valued and administered in accordance with the
terms of this Trust and Plan. Any amounts credited to a participant's employer
contribution and match accounts shall be subject to the vesting schedules
described in Sections (20) or (21) of the Adoption Agreement as appropriate.

                              COMPANY CONTRIBUTIONS
                                       6-4


<PAGE>   85



Any amounts credited to a participant's special ADP account shall be fully
vested and nonforfeitable at all times.

                              COMPANY CONTRIBUTIONS
                                       6-5


<PAGE>   86



                                   ARTICLE VII
                                   -----------

                             AFTER TAX CONTRIBUTIONS
                             -----------------------

                  7.1 AMOUNT OF AFTER TAX CONTRIBUTIONS. If permitted by Section
(17)(c) of the Adoption Agreement, then pursuant to uniform rules and procedures
promulgated by the Administrator, an active participant may voluntarily make
after tax contributions to the Trust Fund created under this Trust and Plan.
After tax contributions may either be a stated percentage of the participant's
compensation or a stated dollar amount and can be made by either payroll
deduction or a cash payment from the participant to the Trustee. After tax
contributions shall be permitted hereunder only if pre-tax contributions are
permitted pursuant to Section (17)(b) of the Adoption Agreement.

                  7.2 CHANGES IN PAYROLL DEDUCTIONS. If after tax contributions
are made by payroll deduction, the percentage designated by the participant
shall continue in effect until revoked or changed by such participant
notwithstanding any change in the amount of such participant's compensation. A
participant may change the portion of his compensation to be contributed to this
Trust and Plan or suspend his contributions to this Trust and Plan pursuant to
Section 7.1 hereof at least one (1) time in each plan year, at such times as the
Company shall permit. A participant shall change or suspend his election by
providing such notice to the Administrator as the Administrator, in its sole
discretion, shall require.

                             AFTER TAX CONTRIBUTIONS
                                       7-1


<PAGE>   87



                  7.3 PAYMENT TO TRUSTEE. The Participating Companies shall pay
in cash to the Trustee all amounts deducted from the compensation of a
participant as after tax contributions as soon as reasonably possible after such
deductions are made but in no event more than ninety (90) days after the
deductions are made.

                  7.4 AFTER TAX ACCOUNTS. Any after tax contributions made by a
participant shall be credited to a post-86 after tax account for the benefit of
such participant. After tax contributions made prior to January 1, 1987, if any,
shall be credited to the participant's pre-87 after tax accounts which shall not
be credited with any after tax contributions made subsequent to December 31,
1986. Any amounts credited to a participant's after tax accounts shall be fully
vested and nonforfeitable at all times.

                  7.5 DEDUCTIBLE VOLUNTARY CONTRIBUTIONS. The Plan Administrator
shall not accept any deductible voluntary contributions hereunder; provided,
however, that any such contributions made to a Predecessor Plan prior to January
1, 1987, shall be maintained in a separate pre-87 IRA account which shall be
fully vested and nonforfeitable at all times. Such account shall share in the
income, gains and losses of the Trust Fund as provided in Article XI hereof. No
part of such account shall be used to purchase life insurance pursuant to
Article X hereof.

                             AFTER TAX CONTRIBUTIONS
                                       7-2


<PAGE>   88



                                  ARTICLE VIII
                                  ------------

                  LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
                  --------------------------------------------

                8.1 CONTRIBUTIONS ARE SUBJECT TO LIMITATIONS. The amount and
allocation of contributions and the allocation of forfeitures under this Trust
and Plan shall be subject to several limitations. Those limitations shall be as
follows:

               (a)  Pre-tax contributions made to the Trust and Plan pursuant to
                    a participant's election under Article V of the Trust and
                    Plan shall be subject to the individual dollar limit
                    described in Section 8.2 hereof;

               (b)  Pre-tax contributions made to the Trust and Plan pursuant to
                    a participant's election under Article V of the Trust and
                    Plan plus, to the extent elected by the Company, any
                    qualified nonelective contributions shall be subject to the
                    deferral percentage limit set forth in Section 8.3 hereof;

               (c)  Matching contributions, other than qualified nonelective
                    contributions used in the deferral percentage test set forth
                    in Section 8.3 hereof, and after tax contributions made to
                    the Trust and Plan shall be subject to the contribution
                    percentage limit set forth in Section 8.4 hereof;

               (d)  The contributions described in paragraphs (b) and (c) above
                    shall be subject to the limit on "multiple use" set forth in
                    Section 8.5 hereof;

               (e)  All contributions made pursuant to Articles V and VI of the
                    Trust and Plan, in the aggregate, shall be subject to the
                    deductibility limit set forth in Section 8.6 hereof; and

               (f)  The allocation of all of the foregoing contributions and the
                    allocation of all forfeitures, in the aggregate, shall be
                    subject to the limitation on annual additions set forth in
                    Article XXIV hereof.

                8.2 THE DOLLAR LIMIT. Effective January 1, 1987, pre-tax
contributions under Article V of the Trust and Plan with

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-1


<PAGE>   89



respect to the taxable year of a participant made pursuant to a participant's
election plus similar amounts contributed on a similar basis by any other
employer (whether or not related to the Participating Companies) required by law
to be aggregated with such contributions under this Trust and Plan shall not
exceed Seven Thousand Dollars ($7,000.00), plus any increase for cost-of-living
after 1987 as determined pursuant to regulations issued by the Secretary of the
Treasury or his delegate pursuant to Section 415(d) of the Code.

                  In the event that the contributions made pursuant to Section
5.1 of the Trust and Plan for a participant's taxable year exceed such limit, or
in the event that the Administrator shall receive notice from a participant by
the March 1 next following the close of a participant's taxable year that the
contributions on behalf of the participant under Section 5.1 hereof, together
with similar contributions under plans of other employers shall have exceeded
such limit, the Administrator shall cause the amount of excess contributions,
together with any earnings allocable to such excess contributions, to be
refunded to the participant by the following April 15th. The amount of any such
refund shall be debited to the participant's pre-tax account.

                  8.3 DEFERRAL PERCENTAGE LIMIT. For any plan year commencing on
or after January 1, 1987, the contributions described in Section 8.1(b) above
shall be limited so that the average deferral percentage for the highly
compensated participants shall not exceed an amount determined based upon the
average deferral

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-2


<PAGE>   90



percentage for the participants who are not highly compensated
participants, as follows:
<TABLE>
<CAPTION>
                     (A)                                                         (B)
        <S>                                                           <C>
                Average Deferral                                          Limit on Average
                Percentage for                                            Deferral Percentage
                Participants who                                          for Highly Compensated
                are not Highly                                            Participants
                Compensated                                               ----------------------
                ----------------
                Less than 2%                                              2 times Column (A)
                2% or more but less than 8%                               Column (A) plus 2%
                8% or more                                                1.25 times Column (A)
</TABLE>

                For purposes of the foregoing, the "deferral percentage" for a
participant for any plan year shall equal a fraction:

               (a)  the numerator of which shall equal the total of (i) plus
                    (ii), where:

                    (i)  equals the total of the contributions made on his
                         behalf for such plan year pursuant to Article V hereof;
                         and

                    (ii) equals, to the extent elected by the Company, the
                         qualified nonelective contributions made on his behalf
                         for such plan year pursuant to Article VI hereof; and

               (b)  the denominator of which shall equal the sum of (i) plus
                    (ii) plus (iii), where:

                    (i)  equals his compensation for such plan year as defined
                         in any manner described in Section 2.11(a) hereof (or
                         2.11(d) hereof if applicable) applied consistently to
                         all participants, subject to the limitation set forth
                         in Section 2.11(c) hereof, but not reduced by any
                         amount referred to in Section 2.11(b)(ii), regardless
                         of the Company's election in the Adoption Agreement;
                         and

                    (ii) equals the pre-tax contributions made on his behalf
                         pursuant to Article V for such plan year; and

                    (iii) equals other amounts excludable from gross income
                         under Sections 125, 402(a)(8), 402(h) or 403(b) of the
                         Code.

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-3


<PAGE>   91




                The Company shall maintain adequate records to demonstrate
compliance with the deferral percentage limits described in this Section 8.3,
including the extent to which qualified nonelective contributions are taken into
account.

                8.4 CONTRIBUTION PERCENTAGE LIMIT. For any plan year commencing
on or after January 1, 1987, the contributions described in Section 8.1(c) above
shall be limited so that the average contribution percentage for the highly
compensated participants shall not exceed an amount determined based upon the
average contribution percentage for the participants who are not highly
compensated participants in accordance with the table set forth in Section 8.3
hereof. For purposes of the foregoing, the "contribution percentage" for a
participant for any plan year shall equal a fraction:

               (a)  the numerator of which shall equal the contributions
                    described in Section 8.1(c) above; and

               (b)  the denominator of which shall equal the total of (i) plus
                    (ii) plus (iii), where:

                    (i)  equals his compensation for such plan year as defined
                         in any manner described in Section 2.11(a) hereof (or
                         2.11(d) hereof if applicable) applied consistently to
                         all participants, subject to the limitation set forth
                         in Section 2.11(c) hereof, but not reduced by any
                         amount referred to in Section 2.11(b)(ii), regardless
                         of the Company's election in the Adoption Agreement;
                         and

                    (ii) equals the pre-tax contributions made on his behalf
                         pursuant to Section 5.1 hereof for such plan year; and

                    (iii) equals other amounts excludable from gross income
                         under Sections 125, 402(a)(8), 402(h) and 403(b) of the
                         Code.

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-4


<PAGE>   92




If, for any plan year, the Trust and Plan satisfies the requirements of Section
8.3 hereof, then the Company may elect, in such manner as the Secretary of the
Treasury or his delegate may provide, to take into account as additional amounts
for purposes of this Section 8.4, amounts contributed to the Trust and Plan
pursuant to a participant's election under Section 5.1 hereof and qualified
nonelective contributions made hereunder.

                  8.5 MULTIPLE USE. If the sum of the deferral percentage and
the contribution percentage for one or more highly compensated employees exceeds
the aggregate limit, the contribution percentage for such employee or employees
shall be reduced (beginning with such highly compensated employee whose
contribution percentage is highest) so that the aggregate limit is not exceeded.
The amount by which each highly compensated employee's contribution percentage
is reduced shall be treated as an excess contribution. The deferral percentage
and contribution percentage of the highly compensated employees shall be
determined after any corrections are made to meet the deferral percentage and
contribution percentage limits. Multiple use does not occur if neither the
average deferral percentage nor the average contribution percentage of the
highly compensated employees exceeds one and twenty-five hundredths (1.25)
multiplied by the corresponding average deferral percentage or average
contribution percentage of the non-highly compensated employees.

                  For purposes of this Section 8.5, the words "aggregate limit"
shall mean the greater of (a) or (b), where:

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-5


<PAGE>   93



          (a)  equals the sum of:

               (i)  one and twenty-five hundredths (1.25) times the greater of
                    the deferral percentage or the contribution percentage for
                    the non-highly compensated employees; and

               (ii) two (2) percentage points plus the lesser of the deferral
                    percentage or the contribution percentage for the non-highly
                    compensated employees; and

          (b)  equals the sum of:

               (i)  one and twenty-five hundredths (1.25) times the lesser of
                    the deferral percentage or the contribution percentage for
                    the non-highly compensated employees; and

               (ii) two (2) percentage points plus the greater of the deferral
                    percentage or the contribution percentage for the non-highly
                    compensated employees.

In no event, however, shall the amounts set forth in (a)(ii) and (b)(ii) above
exceed twice the greater of the deferral percentage or the contribution
percentage for the non-highly compensated employees.

        8.6 DEDUCTIBILITY LIMIT. In no event shall the amount of all
contributions by a Participating Company pursuant to Article VI hereof, together
with all amounts contributed by the Participating Companies to the Trustee
pursuant to participants' elections under Section 5.1 hereof, exceed the maximum
amount allowable as a deduction under Section 404(a)(3) of the Code unless
specifically authorized by the Board of the Participating Company and all such
contributions are hereby expressly conditioned on their deductibility. This
limitation shall not apply to contributions which may be required in order to
provide the minimum

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-6


<PAGE>   94



contributions described in Article XXIII for any plan year in which this Trust
and Plan is top-heavy. Nor shall this limitation apply to contributions which
may be required in order to recredit the account of any rehired participant
whose account is to be recredited with previously forfeited amounts as described
in Section 15.6 hereof.

                  8.7 CORRECTING EXCESS CONTRIBUTIONS. In the event that the
limitations set forth in Sections 8.2, 8.3, 8.4 or 8.5 shall be exceeded, the
Administrator shall take action to reduce future contributions made pursuant to
Sections 5.1 and 7.1 and Article VI hereof as appropriate. Such action may
include a reduction in the future rate of deferral pursuant to Section 5.1
hereof or after tax contributions pursuant to Section 7.1 hereof of any highly
compensated participant pursuant to any legally permissible procedure. Effective
for the first plan year commencing on or after January 1, 1987, in the event
that such action shall fail to prevent the excess, prior contributions made
pursuant to Section 5.1 or 7.1 hereof, plus any income and minus any loss
allocable thereto to the date of distribution, shall be distributed to the
affected highly compensated participants no later than two and one-half (2-1/2)
months following the end of the plan year in which such contributions were made.
If such excess amounts are not distributed within said two and one-half (2-1/2)
month period, a ten percent (10%) excise tax on such excess amount shall be
imposed on the Participating Company employing such highly compensated
participants. Distributions of excess contributions shall be made

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-7


<PAGE>   95



to highly compensated participants on the basis of the respective portions of
such contributions attributable to such participants. Excess contributions shall
be allocated to participants who are subject to the family aggregation rules of
Section 414(q)(6) of the Code in the manner prescribed by Treasury Regulations.
Excess contributions shall be treated as annual additions under Article XXIV of
the Trust and Plan.

                  For purposes of adjusting excess contributions to take into
account income and losses to the date of distribution, the income or loss shall
be equal to the sum of:

                  (a) income or loss for the plan year allocable to the account
to which the excess was allocated multiplied by a fraction, the numerator of
which is the excess contributions credited to such account for the plan year and
the denominator is the total account balance without regard to any income or
loss occurring during such plan year; and

                  (b) ten percent (10%) of the amount determined under (a) above
multiplied by the number of whole calendar months between the end of the plan
year and the date of distribution, counting the month of distribution if
distribution occurs after the fifteenth (15th) of such month.

                          LIMITATIONS ON CONTRIBUTIONS
                                       8-8


<PAGE>   96



                                   ARTICLE IX
                                   ----------

                  INVESTMENT FUNDS AND DIRECTION OF INVESTMENT
                  --------------------------------------------

                  9.1 PARTICIPANT DIRECTION OF INVESTMENTS. The Company may
direct that participants, former participants and beneficiaries be permitted to
direct the investment of all or certain of their accounts under the Trust and
Plan in such media, whether limited or unlimited, as shall be designated by the
Company, from time to time, subject to the limitations hereinafter set forth in
this Article IX. Any direction of the Company pursuant to this Section 9.1,
shall apply to all participants, former participants and beneficiaries in a
uniform and nondiscriminatory manner. In the event the Company directs that
participants be permitted to direct the investment of certain of their accounts,
the Company shall notify the participants, former participants and beneficiaries
of such fact.

                  9.2 INVESTMENT FUNDS. The investment funds which may be
selected by the Company shall include, but not be limited to, the following:

                  (a)      Money Market Funds;

                  (b)      Mutual Funds;

                  (c)      Equity Funds;

                  (d)      Fixed Income Funds;

                  (e)      Any pooled investment fund established by a bank;

                  (f)      Any insurance company's general account; and

                  (g)      Any special account established and maintained by
                           any insurance company.

                                INVESTMENT FUNDS
                                       9-1


<PAGE>   97




The Company shall have the sole discretion to determine the number of investment
funds to be maintained hereunder and the nature of the funds and may change or
eliminate the funds from time to time.

                  9.3 PROCEDURES FOR DIRECTION OF INVESTMENT. If the Company so
permits under Section 9.1 above, a participant, former participant or
beneficiary, by written direction to the Trustee, shall direct the investment of
amounts contributed on his behalf in the pooled investment funds and/or mutual
funds and/or group annuity contracts described in Section 9.2 and in such other
funds as may be established by the Company hereunder; provided, however, that
any such individual's investment selections shall be made in accordance with
such rules as are established by the Administrator from time to time in its sole
discretion. Any rules established by the Administrator pursuant to this Section
9.3 shall apply to all participants, former participants and beneficiaries in a
uniform and nondiscriminatory manner.

                  9.4 INITIAL DIRECTION AND CHANGES OF DIRECTION OF INVESTMENT.
All directions as to the investment of his accounts by a participant, former
participant or beneficiary shall be deemed to be continuing directions until
they shall have been changed. To the extent that any participant, former
participant or beneficiary fails to give investment directions to the Trustee,
amounts credited to his accounts shall be invested in accordance with the
Trustee's direction. A participant, former participant or beneficiary may change
his direction of investment at such times and upon such notice as the
Administrator, from time to time, may

                                INVESTMENT FUNDS
                                       9-2


<PAGE>   98



designate. Each participant, former participant or beneficiary shall indicate
whether any change in investment direction shall apply only to contributions
made to this Trust and Plan on his behalf following such change or whether such
change shall also operate to change the investment of amounts already credited
to his accounts.

                  9.5 VALUATION OF INVESTMENT FUNDS. Any investment fund
established pursuant to this Article IX shall be valued and adjusted according
to the procedures set forth in Article XI hereof as a separate Trust Fund. It is
intended that this Section 9.5 operate to adjust each investment fund to reflect
all income attributable to each such fund and changes in the value of each such
fund's assets, as the case may be, as of any valuation date.

                  9.6 DIRECTION OF INVESTMENTS NOT PERMITTED. If the Company
does not permit individual direction of investment pursuant to Section 9.1
hereof, the investment of the accounts of participants, former participants and
beneficiaries shall be determined by the Trustee or an Investment Manager
pursuant to Article XX hereof.

                                INVESTMENT FUNDS
                                       9-3


<PAGE>   99



                                    ARTICLE X
                                    ---------

                               INSURANCE CONTRACTS
                               -------------------

                10.1 PURCHASE OF INSURANCE CONTRACTS. If permitted under Section
(31) of the Adoption Agreement, then the Administrator shall purchase on behalf
of any active participant who directs either the Trustee to purchase for his
benefit or any participant who is designated by the Company an endowment or life
insurance contract or contracts from such insurance company or companies in such
amounts (subject to the limitations specified in this Article X) and in such
form as such participant or the Company, as the case may be, may determine. The
proceeds upon the maturity, in whole or in part, of any of contract or
contracts, due to the death of a participant, shall be for the benefit of the
beneficiaries of such participant as to whom the maturity occurs, subject to the
other provisions of this Trust and Plan, specifically including the spousal
consent requirements of Article XVII hereof to the extent legally applicable or
as required by the Administrator. The contract or contracts shall be issued in
the name of the Trustee who shall retain, until their maturity by death of a
participant or disposition under the terms of this Trust and Plan, all incidents
of ownership therein. The proceeds of said contract or contracts payable on the
death of a participant shall be paid directly to the death beneficiary
determined under Article XVII hereof and the Administrator shall execute such
forms or designations as shall be required by the insurance company to comply
with this sentence.

                                    INSURANCE
                                      10-1


<PAGE>   100



The premium on any such contract or contracts purchased for a participant's
benefit shall be paid from the amounts credited to such participant's accounts,
other than his pre-87 IRA account, which accounts shall be debited by the amount
of premiums so paid. In no event shall the aggregate of the entire amounts paid
for term life insurance plus fifty percent (50%) of the amounts paid for
ordinary life insurance contracts for any participant be as much as twenty-five
percent (25%) of the aggregate of contributions which have been allocated to his
accounts, other than his pre-87 IRA account, if any, since the date he first
became a participant.

                10.2 PREMIUM PAYMENTS. All contracts purchased shall contain
such provisions against alienation and levying thereon as the Administrator may
deem appropriate and shall be procurable. Premium payments for such insurance
shall be on a single premium or level premium basis and premium payments shall
be charged against the participant's accounts, other than his pre-87 IRA
account, if any, as of the date of payment.

                10.3 ACCUMULATION OF DIVIDENDS, ETC. During the time any
contract is held under the provisions of the Trust and Plan, any dividends,
endowments or returns of premium payable under such contract shall be
accumulated at interest under such contract or the participant, in his
discretion, may direct the Trustee to instruct the insurance company to apply
any dividends, endowments or returns of premium accumulated under the contract
to the payment of any premium or the purchase of paid-up additions.

                                    INSURANCE
                                      10-2

<PAGE>   101


                10.4 INSUFFICIENT FUNDS FOR PAYING PREMIUMS. When, on an
allocation date, the premium or premiums then due on all contracts held by the
Trustee for the benefit of any participant shall exceed the amount in or
creditable to such participant's accounts, other than his pre-87 IRA account, if
any, or the amount which, under the twenty-five (25%) limitation stated in
Section 10.1 hereof, may be used to pay premiums upon life insurance contracts
for a participant, the participant may proceed as follows:

                (a)        direct the Trustee to instruct the insurance company
                           to apply any dividends, endowments or returns of
                           premium accumulated under such contracts for the
                           payment of premiums to the extent necessary; and

                (b)        in the event the Trustee applies the dividends,
                           endowments and returns of premium accumulated as
                           aforesaid, but said amount is insufficient to meet
                           premium payments due under such contracts, such
                           participant may pay any remaining premium or premiums
                           or a portion thereof then due himself; and

                (c)        in the event a participant shall decline to make
                           personal payment of the premium or premiums due on
                           such contracts, he may direct the Trustee to borrow
                           either from the insurance company or from such
                           other institution as the participant may direct
                           upon the security of the contract or contracts for
                           the purpose of paying the premium or premiums
                           thereon; and

                (d)        in the event payment of the premium or premiums is
                           not made under subsections (a) and (b) above, and
                           the participant shall not direct the Trustee to
                           borrow funds to pay said premium or premiums, the
                           Trustee shall instruct the insurance company to
                           have the contract or contracts placed upon a paid-
                           up basis, to the extent necessary, provided that in
                           the event the value of the contract or contracts
                           shall be insufficient to place same upon a paid-up
                           basis according to the practice of the insurance
                           company, such contract or contracts shall be
                           reduced to cash and the amounts received thereby
                           shall be credited to the participant's accounts,
                           other than his pre-87 IRA account, if any.

                                    INSURANCE
                                      10-3


<PAGE>   102




                10.5 CONTRACT PROVISIONS. If available, any contract purchased
by the Trustee shall contain an automatic premium loan provision exercisable by
the Trustee at the direction of the participant in the event of non-payment of
the premium and shall also permit conversion to paid up insurance by the Trustee
at the direction of the participant. Insurance contracts purchased may contain
double indemnity and waiver of premium provisions, insofar as permitted by the
insurance company.

                10.6 NO INSURANCE BEYOND RETIREMENT. In no event shall life
insurance be permitted to continue on the life of a participant beyond his
date of actual retirement.

                10.7 CASH SURRENDER VALUES. The Administrator shall maintain
records of the accounts from which premiums on insurance contracts have been
paid and shall allocate the cash surrender values of the insurance contracts
among the accounts in an equitable manner. Upon the termination of employment,
retirement or disability of the participant, the allocable share of the cash
surrender value shall be added to the amount credited to each of the
participant's accounts for purposes of determining his vested interest and the
amount distributable to the participant.

                10.8 PURCHASE OF CONTRACT ON CESSATION OF ACTIVE PARTICIPATION.
If the Trustee shall hold an insurance contract or contracts on the life of a
terminated participant on the date he ceases to be an active participant, the
terminated participant shall instruct the Trustee regarding disposition of such
contract as follows:

                                    INSURANCE
                                      10-4


<PAGE>   103



                (a)        the participant may purchase any such contract from
                           the Trust and Plan;

                (b)        the participant may direct that such contract be
                           distributed to him from the Trust and Plan in
                           satisfaction of all or part of his rights, if any,
                           under Article XV; or

                (c)        the participant may direct the Trustee to surrender
                           said contract to the insurance company for cash.

In the event that the terminated participant elects to purchase any such
contract from the Trust and Plan he shall pay to the Trustee an amount equal to
its cash surrender value within thirty (30) days after the date he ceases to be
an active participant. If such amount is so paid, the Trustee shall assign all
its right, title and interest in and to such contract to the participant and
shall credit his accounts with the amount so paid. In the event that the
terminated participant elects to have any such contract distributed to him from
the Trust and Plan, the Trustee shall debit such participant's accounts with the
cash surrender value of said contract. The Trustee shall then assign all its
right, title and interest in and to such contract to the terminated participant.

                In the event that the terminated participant elects to surrender
such contract to the insurance company for cash, to the insurance company for
cash and shall credit such participant's employer contribution account with the
cash surrender value of said contract.

                                    INSURANCE
                                      10-5


<PAGE>   104



                                   ARTICLE XI
                                   ----------

                                    ACCOUNTS
                                    --------

                11.1 ESTABLISHMENT OF ACCOUNTS. Upon an employee's becoming a
participant, the Administrator shall notify the Trustee and provide the Trustee
with such information concerning said participant as the Trustee may require.
Upon being notified by the Administrator that an employee has become a
participant, the Trustee shall establish the appropriate accounts in the name of
such participant. If a participant's employment shall terminate for a reason
other than his death, permanent and total disability or retirement, a
distribution account shall be established for him pursuant to Article XV hereof.

                11.2 CREDITING OF ACCOUNTS. Accounts shall be credited with
contributions in the amounts specified in Articles V, VI and VII hereof, shall
be credited or debited with the income, gains or losses of the Trust Fund
pursuant to this Article XI, and shall be debited with the amount of any
withdrawals or distributions made therefrom. All such credits and debits to the
accounts of a participant shall be made as of the dates specified in the
appropriate Sections of this Trust and Plan.

                11.3 VALUATION OF ASSETS. As soon as practicable following each
allocation date and on such other dates as the Administrator, in its sole
discretion, may designate pursuant to Section 11.5 hereof, the Trustee shall
evaluate all assets of the Trust Fund as of such valuation date. The Trustee
shall use the

                                    ACCOUNTS
                                      11-1


<PAGE>   105



fair market values of securities or other assets in making said determination.
The Trustee shall then subtract from the total value of the assets of said Trust
Fund the total of all accounts as of said valuation date. Each such account
shall be credited with that portion of the excess of the value of the assets
over the total of all such accounts which bears the same relationship to the
total of such excess as (a) bears to (b), where:

                (a)        equals the amount credited to said account; and

                (b)        equals the total amounts credited to all accounts.
The amount credited to each account shall be reduced in similar proportion in
the event the total of all accounts as of said date exceeds the total value of
all assets of the Trust Fund as of said valuation date. It is intended that this
paragraph operate to distribute among all such accounts in the Trust, all income
of the Trust Fund and changes in the value of the Trust Fund's assets, as the
case may be. The Administrator and the Trustee may adopt such rules as they deem
appropriate to credit pre-tax contributions after tax contributions and matching
contributions or other contributions which were received periodically through
the valuation period with an appropriate percentage of the income, gains and
losses of the Trust Fund's assets.

                Notwithstanding the foregoing provisions of this Section 11.3,
if the assets of the Trust Fund are invested either with an institutional
Trustee or with an Investment Manager or other professional money manager which
maintains a procedure for allocating investment earnings and losses to accounts
utilizing the

                                    ACCOUNTS
                                      11-2


<PAGE>   106



fair market value of assets, the Trustee may direct that such method be used in
lieu of the procedures hereinbefore described.

                11.4 VALUATION OF INVESTMENT FUNDS. If separate investment funds
have been established under Article IX hereof, the Trustee shall proceed as
described in Section 11.3 above but on an investment fund by investment fund
basis. It is intended that this Section 11.4 operate to distribute among all
accounts invested in a particular investment fund all income of such fund
allocable to the Trust and changes in the value of the fund's assets, as the
case may be. The adjustments in the amounts credited to such accounts shall be
deemed to have been made as of said valuation date.

                11.5 INTERIM VALUATION OF ASSETS. In addition to or in lieu of
the valuation dates set forth in Section 11.3 hereof, the Administrator, in its
sole discretion, may instruct the Trustee to make an interim valuation of assets
of the Trust Fund. In exercising its discretion as to whether to instruct the
Trustee to evaluate the assets of the Trust Fund, the Administrator shall
consider the following factors:

                (a)        the expense of any such interim valuation;

                (b)        the length of time involved in making any such
                           interim valuation and the resulting delay in making
                           any distributions from the Trust Fund;

                (c)        the magnitude of the estimated change in the value
                           of the assets of the Trust Fund; and

                (d)        the size of any distribution or distributions
                           involved.

                                    ACCOUNTS
                                      11-3


<PAGE>   107



Upon instruction by the Administrator, the Trustee shall evaluate the assets of
the Trust Fund and adjust all the accounts of the Trust and Plan in accordance
with the methods and procedures contained in Section 11.3 or 11.4 hereof as of
the date specified by the Administrator.

                                    ACCOUNTS
                                      11-4


<PAGE>   108



                                   ARTICLE XII
                                   -----------

                                      LOANS
                                      -----

                12.1 LOAN ADMINISTRATION AND APPLICATIONS. If permitted under
Section (32) of the Adoption Agreement, a participant, former participant or
beneficiary of a deceased participant or former participant, other than an
owner-employee or a shareholder-employee as defined in Section 12.4 of the Trust
and Plan, may apply to the Administrator for a loan from the Trust and Plan. Any
such loan shall not be made available to highly compensated employees in an
amount greater than that made available to nonhighly compensated employees. If
the Administrator determines that such borrower (and proposed loan) satisfies
the requirements set forth below for loan approval, the Administrator shall
direct the Trustee to make a loan to such borrower from one or more of his
accounts, other than his pre-87 IRA account. The amount of any such loan shall
be determined by the Administrator; provided, however, that, on or after October
19, 1989, any such loan shall not, when combined with outstanding loans
previously made from this Trust and Plan and loans made under other qualified
retirement plans, if any, maintained by the Controlled Group, cause the
aggregate amount of all such loans to such borrower to exceed the lesser of (a)
or (b) below, where:

                (a)        equals one-half (1/2) of all vested amounts held for
                           such borrower under this Trust and Plan (other than
                           amounts credited to his pre-87 IRA account); and

                                      LOANS
                                      12-1


<PAGE>   109



               (b)  equals Fifty Thousand Dollars ($50,000.00) reduced by the
                    remainder, if any, of:

                    (i)  the highest outstanding balance of loans to such
                         borrower from this Trust and Plan and all other
                         qualified retirement plans maintained by the Controlled
                         Group during the twelve (12) month period preceding the
                         date on which the loan is to be made; minus

                    (ii) the outstanding balance of loans to such borrower from
                         the plans on the day the loan is to be made.

Loans made prior to October 19, 1989 shall not exceed the lesser of (c) or (d)
below, where:

               (c)  equals the greater of:

                    (i)  Ten Thousand Dollars ($10,000.00); or

                    (ii) one-half (1/2) of all vested amounts held for such
                         borrower under this Trust and Plan (other than amounts
                         credited to his pre-87 IRA account); and

               (d)  equals Fifty Thousand Dollars ($50,000.00).

               The following additional provisions shall be applicable to the
loan program under this Trust and Plan:

               (A)  LOAN PROGRAM ADMINISTRATION. The loan program under the
                    Trust and Plan shall be administered by the Administrator.

               (B)  LOAN APPLICATION PROCEDURE. Each borrower shall apply for a
                    loan by written application on a form acceptable to the
                    Administrator.

               (C)  BASIS FOR APPROVAL OR DENIAL OF LOANS. Loans will be
                    approved only if:

                    (1)  the circumstances of the loan satisfy the requirements
                         of Section (32) of the Adoption Agreement;

                    (2)  the Administrator believes the borrower intends to
                         repay the loan in accordance with its terms; and

                                      LOANS
                                      12-2


<PAGE>   110



                    (3)  the borrower's spouse, if any, consents to the loan in
                         accordance with Sections 28.7 and 28.8 hereof within
                         the ninety (90) day period ending on the date the loan
                         is made; and

                    (4)  the amount of such loan shall not be in excess of the
                         vested amount which is credited to the borrower's
                         accounts, as selected in Section (32) of the Adoption
                         Agreement, at the time of such loan and shall be made
                         exclusively from such accounts; and

                    (5)  the amount of such loan shall not be less than the
                         amount selected in Section (33) of the Adoption
                         Agreement; and

                    (6)  the borrower designates the accounts and investments
                         which are to be liquidated to permit making of such a
                         loan, as requested by the Administrator; and

                    (7)  the loan satisfies the requirements of Section 12.2 of
                         the Trust and Plan.

               12.2 TERMS AND CONDITIONS OF LOANS. Any loan made pursuant to
Section 12.1 shall be considered to be made solely from the account or accounts
of the borrower and shall be subject to the following terms and conditions:

               (a)  INTEREST. Interest shall be charged at a reasonable rate,
                    comparable to the rate charged by a commercial lender for a
                    similar loan.

               (b)  LOAN TERM AND REPAYMENT SCHEDULE. The term of any loan shall
                    be arrived at by mutual agreement between the borrower and
                    the Administrator but shall not exceed five (5) years,
                    unless, effective for plan years commencing on or after
                    January 1, 1987, the proceeds of such loan are to be used to
                    acquire any dwelling unit which within a reasonable time is
                    to be used as the borrower's principal residence, in which
                    case, such loan may be for such term as is customary in
                    similar transactions involving lending institutions.
                    Effective for plan years commencing on or after January 1,
                    1987, all loans shall provide for the substantially level
                    amortization of the loan, with payments not less frequently
                    than quarterly, over the term of the loan; provided,
                    however, that the terms of the loan

                                      LOANS
                                      12-3


<PAGE>   111



                    may permit a borrower a grace period of up to one (1) year
                    from such repayments while such borrower is on an unpaid
                    leave of absence from a Participating Company.

               (c)  SEGREGATION OF ACCOUNTS. If an individual borrows money from
                    the Trust and Plan, his accounts, to the extent of such
                    borrowing, shall be deemed segregated for investment
                    purposes. The note representing such loan and the borrower's
                    accounts, to the extent of such borrowing, shall not be
                    taken into account in the valuation of the Trust and Plan
                    pursuant to Section 11.3 hereof.

               (d)  REPAYMENT PROCEDURES. Repayment of any loan made to an
                    employee shall be by payroll deduction unless another
                    procedure is agreed to by the Administrator and the
                    employee. Repayment of any loan made to a borrower who is
                    not an employee shall be made as mutually agreed by the
                    Administrator and such borrower.

               (e)  DOCUMENTATION AND COLLATERAL. Each loan shall be evidenced
                    by a borrower's note for the amount of the loan and interest
                    payable to the order of the Trustee and shall be supported
                    by adequate collateral. Such collateral shall consist of
                    (i) an amount not to exceed fifty percent (50%) of the
                    borrower's entire right, title and interest in and to the
                    Trust Fund, and any earnings attributable to such amount,
                    and (ii) other property, if necessary, of sufficient value
                    to adequately secure the repayment of the loan. The
                    Administrator may require such other and further
                    documentation as it deems appropriate.

               (f)  DEFAULT. A borrower shall be in default if he fails to make
                    any payment of principal or interest when due, if he fails
                    to make a required payment after a permitted one (1) year
                    grace period, as provided in subsection (b) above, or if his
                    collateral becomes inadequate to secure the loan and he does
                    not provide substitute collateral satisfactory to the
                    Administrator within ten (10) days after a request therefor
                    by the Administrator. In the event of default by a borrower,
                    his loan shall be accelerated, and:

                    (i)  If his collateral security in this Trust and Plan is
                         adequate to cover all or part of the outstanding
                         principal and interest, and if distribution of such
                         amount would not, in the

                                      LOANS
                                      12-4


<PAGE>   112



                        opinion of the Administrator, put at risk the tax
                        qualified status of the Trust and Plan or the pre-tax
                        contribution portion thereof, the Trustee shall execute
                        upon such Trust and Plan collateral; and

                  (ii)  If his collateral security in this Trust and Plan is not
                        adequate to cover all of the outstanding principal and
                        interest, or if execution upon such collateral would, in
                        the opinion of the Administrator, put at risk the tax
                        qualified status of the Trust and Plan or the pre-tax
                        contribution portion thereof, the Trustee shall commence
                        appropriate collection actions against the borrower to
                        recover the amounts owed.

                        Expenses of collection, including legal fees, if any, of
                        any loan in default shall be borne by the borrower or
                        his accounts under this Trust and Plan.

                   12.3 PAYMENT OF PRIOR LOANS. Notwithstanding the foregoing
provisions of this Article XII, in the event the proceeds of any loan made
hereunder shall be used directly or indirectly to pay off any obligations under
a prior loan made hereunder, the term of the more recent loan shall not extend
beyond the period of repayment under the prior loan. For purposes of this
Section 12.3, the Administrator shall be able to rely on a certification by the
borrower as to the use of the new loan's proceeds.

                   12.4 SHAREHOLDER-EMPLOYEE DEFINED. The term "Shareholder-
Employee" shall mean, with respect only to those taxable years for which a
member of the Controlled Group is an "electing small business corporation"
pursuant to Subchapter S of the Code, an employee of who owns, or is considered
as owning (within the meaning of Section 318(a)(1) of the Code) on any day
during such a taxable year, more than five (5) percent of the outstanding stock
of such member of the Controlled Group.

                                      LOANS
                                      12-5


<PAGE>   113



                                  ARTICLE XIII
                                  ------------

                            WITHDRAWALS FROM ACCOUNTS
                            -------------------------

                13.1 RESTRICTIONS ON WITHDRAWALS. The Administrator may, by
uniform rules and regulations, provide that withdrawals made pursuant to this
Article XIII shall be subject to the following restrictions:

                (a)        a married participant shall obtain his spouse's
                           consent as set forth in Section 13.3 hereof;

                (b)        the minimum amount of any such withdrawal shall be
                           the lesser of the amount specified in Section (35) of
                           the Adoption Agreement or the remaining balance of
                           his vested interest or his personal accounts;

                (c)        the Administrator shall specify the maximum number
                           of withdrawals a participant may make in a plan
                           year or other period;

                (d)        the participant shall make a written application
                           for any such withdrawal at least fifteen (15) days
                           before the withdrawal occurs; and

                (e)        other reasonable and uniform rules and regulations,
                           consistently applied, as may be established from
                           time to time by the Administrator.

If separate investment funds have been established pursuant to Article IX
hereof, the withdrawing participant shall designate the investments that are to
be liquidated to permit the making of such withdrawal.

                13.2 WITHDRAWALS FROM ACCOUNTS. To the extent permitted by
Section (34) of the Adoption Agreement, a participant shall have the right,
subject to Section 13.1 above, to withdraw amounts credited to his accounts. To
the extent that Section (34)(f) of the Adoption Agreement permits participants
to withdraw amounts

                                   WITHDRAWALS
                                      13-1


<PAGE>   114



credited to their after tax accounts, any withdrawals from such amounts shall be
deemed to be made in the following order:

                (a)        first, the after tax contributions which were made by
                           the participant prior to January 1, 1987, if any, and
                           which are credited to his pre-87 after tax account,
                           without adjustment for income, gains or losses
                           thereon;

                (b)        second, the amounts credited to his post-86 after
                           tax account; and

                (c)        third, the balance of the amounts credited to his
                           pre-87 after tax account.

No amounts credited to a participant's accounts may be withdrawn by the
participant prior to his attainment of age fifty-nine and one-half (59 1/2)
unless he provides the Administrator with a written statement that he is aware
of the potential income tax ramifications of the withdrawal.

                13.2 TERMINATION OF WITHDRAWAL RIGHTS. Upon an attempt by a
participant or beneficiary to use his interest in this Trust and Plan as
security for any type of obligation, or to alienate, dispose of or in any manner
encumber, or upon an attempt by any third person to attach, levy upon or in any
manner convert the use or enjoyment of any such interest of a participant, the
right to withdraw any portion thereof pursuant to this Article XIII shall
automatically terminate.

                13.3 SPOUSE'S CONSENT. No withdrawal may be made hereunder
unless the withdrawing participant's spouse, if any, consents to the withdrawal
in accordance with Sections 28.7 and 28.8 hereof within the ninety (90) day
period ending on the date the withdrawal commences to be made.

                                   WITHDRAWALS
                                      13-2


<PAGE>   115



                                   ARTICLE XIV
                                   -----------

                             HARDSHIP DISTRIBUTIONS
                             ----------------------

                14.1 HARDSHIP DISTRIBUTIONS. If Section (34)(h) of the Adoption
Agreement so provides and subject to such uniform rules and procedures as the
Administrator may prescribe, in case of hardship, a participant may apply to the
Administrator for a hardship distribution. For purposes of this Section 14.1, a
distribution shall be on account of hardship only if the distribution is made on
account of an immediate and heavy financial need of the participant, as
described in Section 14.2 below, and is necessary, as described in Section 14.3
below, to satisfy such need. Such distribution may be made only from amounts
specified in Section 14.4 below and, if the applicant is married, only with his
spouse's consent pursuant to Section 14.7 below.

               14.2 IMMEDIATE AND HEAVY FINANCIAL NEED. A distribution will be
made on account of an immediate and heavy financial need of a participant only
if the distribution is on account of:

                (a)        medical expenses described in Section 213(d) of the
                           Code incurred by the participant, the participant's
                           spouse, or any dependents of the participant (as
                           defined in Section 152 of the Code);

                (b)        purchase (excluding mortgage payments) of a
                           principal residence for the participant;

                (c)        payment of tuition for the next semester or quarter
                           of post-secondary education for the participant,
                           his or her spouse, children, or dependents; or

                (d)        the need to prevent the eviction of the participant
                           from his principal residence or foreclosure on the
                           mortgage of the participant's principal residence.

                                    HARDSHIP
                                      14-1


<PAGE>   116



                14.3 DETERMINATION OF AMOUNT NECESSARY TO SATISFY AN IMMEDIATE
AND HEAVY FINANCIAL NEED. A distribution will be deemed to be necessary to
satisfy an immediate and heavy financial need of the participant only if all of
the following requirements are satisfied:

                (a)        the distribution is not in excess of the amount of
                           the immediate and heavy financial need of the
                           participant;

                (b)        the participant has obtained all distributions, other
                           than hardship distributions, and all nontaxable loans
                           currently available under all plans maintained by a
                           Participating Company;

                (c)        the Trust and Plan and all other plans maintained by
                           the Participating Companies provide that the
                           participant's pre-tax contributions and employee
                           after tax contributions will be suspended for at
                           least twelve (12) months after receipt of the
                           hardship distribution; and

                (d)        the Trust and Plan and all other plans maintained
                           by the Participating Companies provide that the
                           participant may not make pre-tax contributions for
                           the participant's taxable year immediately
                           following the taxable year of the participant
                           during which said hardship distribution occurs in
                           excess of the applicable limit under Section 402(g)
                           of the Code for such next taxable year of the
                           participant less the amount of such participant's
                           pre-tax contributions for the taxable year of the
                           participant during which said hardship distribution
                           occurs.

By virtue of this Section and Section 5.6, the Trust and Plan provides for the
restrictions contained above in subsections (c) and (d).

               14.4 PERMITTED DISTRIBUTIONS. Subject to obtaining spousal
consent as provided in Section 14.7 hereof, if the Administrator determines that
the criteria set forth above are

                                    HARDSHIP
                                      14-2


<PAGE>   117



satisfied with respect to a participant, it may order a distribution of all or
a portion of the sum of:

                (a)        such participant's employer contribution and match
                           accounts which are not amounts attributable to
                           qualified nonelective contributions multiplied,
                           respectively, by his Vested Percentage in each such
                           account;

                (b)        such participant's distribution accounts, if any,
                           which do not contain amounts attributable to
                           qualified nonelective contributions;

                (c)        the lesser of:

                             (i)    his pre-tax account balance; and

                            (ii)    the sum of the aggregate amount of the
                                    contributions made to his pre-tax account,
                                    plus earnings thereon, if any, credited
                                    prior to January 1, 1989; and

                (d)        the amount then credited to any personal accounts
                           held for his benefit.

                14.5 METHOD OF DISTRIBUTION. If the Administrator orders a
distribution pursuant to this Article XIV, such distribution may be made in a
lump sum or in a designated number of monthly or quarterly installments or
partly in a lump sum and the balance in installments. If the Administrator
directs that such distribution be made, it may thereafter, if it determines that
such hardship no longer exists or upon agreement with the participant, direct
that any amounts of such distribution remaining unpaid not be distributed.
Amounts distributed to a participant under this Article XIV shall be debited to
the appropriate account as they are paid.

                14.6 ADMINISTRATION OF HARDSHIP PROVISIONS. Neither the
application for nor payment of any distribution in accordance with

                                    HARDSHIP
                                      14-3


<PAGE>   118



this Article XIV shall have the effect of terminating a participant's
participation in the Trust and Plan. The Administrator may prescribe the use of
such forms, conduct such investigation, and require the making of such
representations and warranties, as it deems desirable to carry out the purpose
of this Article XIV.

                14.7 SPOUSE'S CONSENT. No hardship distribution may be made
hereunder unless the participant's spouse, if any, consents to the hardship
distribution in accordance with Sections 28.7 and 28.8 hereof within the ninety
(90) day period ending on the date the hardship distribution commences to be
made.

                                    HARDSHIP
                                      14-4


<PAGE>   119



                                   ARTICLE XV
                                   ----------

                            TERMINATION OF EMPLOYMENT
                            -------------------------

                15.1 ELIGIBILITY FOR DISTRIBUTION. In the event of the
termination of employment of a participant for any reason other than his death,
disability, or retirement, he shall be entitled to receive a distribution of his
vested interest and his personal accounts.

                15.2 COMMENCEMENT OF DISTRIBUTIONS. The vested interest and
personal accounts of a terminated participant shall be distributed to him in
accordance with the rules and procedures set forth in Article XVIII or XVIII-A
hereof. Except as otherwise provided in Section 18.1 or 18.1A hereof,
distributions shall be made or shall commence to be made as of the date
specified in Section (29) of the Adoption Agreement.

                Notwithstanding the foregoing provisions of this Section 15.2,
if the Company has elected an early retirement date pursuant to Section (26) of
the Adoption Agreement, and if a terminated participant, at the time of his
termination of employment, satisfied the service requirement but not the age
requirement, if any, as set forth therein, such terminated participant may elect
to have his vested interest and personal accounts distributed or commence to be
distributed on such date on or after he meets the age requirement for early
retirement and on or before his normal retirement date, as he shall select, in
his own discretion.

                            TERMINATION OF EMPLOYMENT
                                      15-1


<PAGE>   120



                15.3 VESTING AND FORFEITURES. If a terminated participant's
Vested Percentage in his employer contribution account and/or his match account
is one hundred percent (100%), such account shall be deemed to have become a
distribution account on his date of termination of employment and shall
thereafter be held, administered and distributed in accordance with Article
XVIII or XVIII-A hereof. If his Vested Percentage in his employer contribution
account and/or his match account is less than one hundred percent (100%), such
account shall continue to be administered as such in accordance with the
provisions of Article XI hereof until the earliest to occur of any of the
following events:

                (a)        he receives a distribution of his entire vested
                           interest and personal accounts;

                (b)        he has five (5) consecutive One Year Breaks In
                           Service;

                (c)        he dies; or

                (d)        he is rehired by a member of the Controlled Group.

                If the earliest to occur of said events is either the date of
complete distribution of his vested interest and personal accounts, his having
had five (5) consecutive One Year Breaks In Service or his death, an amount
equal to the excess of:

                    (i)    the balance in his employer contribution account plus
                           the amount, if any, then credited to pre-tax, match,
                           special ADP and distribution accounts held for his
                           benefit; over

                   (ii)    his vested interest;

shall be forfeited as of such date and shall be debited to his appropriate
accounts.  If any amounts remain credited to said accounts after said
forfeiture, such accounts shall thereafter be

                            TERMINATION OF EMPLOYMENT
                                      15-2


<PAGE>   121



deemed to have become distribution accounts and shall be held, administered and
distributed in accordance with Article XVIII or XVIII-A hereof. In the event
that a terminated participant does not have a vested interest, then his personal
accounts, if any, shall be distributed to him immediately and the amounts
credited to his employer contribution and match accounts shall be forfeited at
the time of such participant's termination of employment. Even if such
participant does not have any personal accounts, he will be deemed to have
received a distribution on his date of termination of employment of zero (0)
dollars.

                If the earliest of said events shall be the terminated
participant's rehire by a member of the Controlled Group, he shall immediately
be reinstated as a participant in this Trust and Plan and this Article XV shall
not apply to him until a subsequent termination of employment described in
Section 15.1 hereof.

                15.4 REALLOCATION OF FORFEITURES. If Section (23) of the
Adoption Agreement so provides, the amounts forfeited pursuant to Section 15.3
hereof shall be allocated on the allocation date coinciding with or next
following the date of forfeiture among the employer contribution and match
accounts of all participants who were active participants during the plan year,
excluding such participants as are described in Section (19) of the Adoption
Agreement.

                Forfeitures shall be allocated in the same manner as employer
contributions are allocated pursuant to Section 6.2 hereof; provided, however
that no forfeitures shall be allocated to

                            TERMINATION OF EMPLOYMENT
                                      15-3


<PAGE>   122



the accounts of any participant in excess of the limitations on annual additions
set forth in Article XXIV hereof. Allocation of forfeitures shall be made prior
to the revaluation provided for in Article XI hereof.

                15.5 FORFEITURES USED TO REDUCE CONTRIBUTIONS. If Section (23)
of the Adoption Agreement so provides, the amounts forfeited pursuant to Section
15.3 hereof shall be used, on the allocation date coinciding with or next
following the date of forfeiture, to reduce Participating Company contributions.

                15.6 REHIRED PARTICIPANTS. In the event a terminated participant
is rehired by a member of the Controlled Group prior to incurring five (5)
consecutive One Year Breaks In Service, he shall immediately be reinstated as a
participant in this Trust and Plan and any amounts forfeited pursuant to Section
15.3 hereof shall be recredited to his employer contribution and/or match
account as provided in Section (24) of the Adoption Agreement.

                If the Company has elected pursuant to Section (24) of the
Adoption Agreement to require repayment to the Trust and Plan of amounts
previously distributed to the participant prior to recrediting of forfeited
amounts, any amounts previously forfeited pursuant to Section 15.3 hereof shall
be recredited to a participant's employer contribution and/or match account
provided that such participant recontributes to this Trust and Plan on or before
the first to occur of:

                (a)        the date he incurs five (5) consecutive One Year
                           Breaks In Service; and

                (b)        the fifth (5th) anniversary of his date of rehire;

                            TERMINATION OF EMPLOYMENT
                                      15-4


<PAGE>   123




the full amount distributed to him following his earlier termination of
employment. Such amount shall be recredited to the account from which it
originated.

                Notwithstanding any other provision of this Trust and Plan to
the contrary, in order to balance the accounts maintained under this Trust and
Plan after giving effect to the recrediting of previously forfeited amounts to a
rehired participant's employer contribution and match accounts, the Company, at
its option, may direct the Trustee to:

                (a)        first reduce the value of the forfeitures, if any,
                           which would otherwise be reallocated as of the
                           allocation date coinciding with or next following the
                           date such participant was rehired; and

                (b)        in the event the accounts maintained under this Trust
                           and Plan are not balanced after the reduction in
                           subsection (a) above, reduce the gain, if any, in the
                           value of the Trust and Plan's assets since the most
                           recent valuation date as of the valuation date
                           coinciding with or next following the date such
                           participant was rehired;

provided that the total of the reductions described in subsections (a) and (b)
above with respect to any plan year shall not exceed the aggregate previously
forfeited amounts which were recredited to the employer contribution and match
accounts of participants who were rehired during such plan year.

                To the extent that the sum of the amounts described in
subsections (a) and (b) above for any plan year is less than the aggregate
previously forfeited amounts which were recredited to the employer contribution
and match accounts of participants who were rehired during the plan year, the
Participating Companies which rehired the former participants shall contribute
to this Trust and

                            TERMINATION OF EMPLOYMENT
                                      15-5


<PAGE>   124



Plan an amount equal to the difference between the aggregate previously
forfeited amounts which were recredited to the employer contribution and match
accounts of participants who were rehired during the plan year by the
Participating Companies and the sum of the amounts described in subsections (a)
and (b) above. The obligation to contribute such amounts shall be allocated
among the Participating Companies by the Company. Such contributions shall be
made by the Participant Companies no later than the due date (including
extensions) of the tax return for the taxable year which includes the last day
of the plan year during which such participants were rehired. In addition, any
portion of such contribution which represents amounts previously contributed by
a Participating Company to this Trust and Plan shall not be deemed to have been
contributed for purposes of Article XXIV hereof at the time it is recontributed,
but shall be deemed to have been contributed at the time of the original
contribution.

                            TERMINATION OF EMPLOYMENT
                                      15-6


<PAGE>   125



                                   ARTICLE XVI
                                   -----------

                               RETIREMENT BENEFITS
                               -------------------

                16.1 NORMAL RETIREMENT. The employer contribution account and
match account of a participant who has attained his normal retirement date shall
be fully vested and nonforfeitable. A participant who retires on his normal
retirement date shall be entitled to receive an amount equal to the sum of the
amounts then credited to all accounts held for his benefit. Except as otherwise
provided in Section 18.1 or 18.1A hereof, such amounts shall be distributed or
shall commence to be distributed as soon as reasonably possible after his date
of retirement but not later than sixty (60) days after the close of the plan
year which includes the date of his retirement. Such distribution shall be made
in accordance with the provisions of Article XVIII or XVIII-A hereof.

                16.2 EARLY RETIREMENT. If Section (26) of the Adoption Agreement
permits early retirement, a participant may elect to retire on or after his
early retirement date but before reaching his normal retirement date. In the
event of such early retirement, a participant shall be entitled to receive an
amount equal to the sum of the amounts then credited to all his accounts. Except
as otherwise provided in Section 18.1 or 18.1A hereof, such amounts shall be
distributed or shall commence to be distributed on such date on or after his
early retirement date but no later than his normal retirement date as such
retired participant shall select.

                               RETIREMENT BENEFITS
                                      16-1


<PAGE>   126



Such distribution shall be made in accordance with the provisions of Article
XVIII or XVIII-A hereof.

                16.3 LATE RETIREMENT. In the event a participant works beyond
his normal retirement date, his retirement shall be deemed to have occurred on
the earlier of the date of his termination of employment with a member of the
Controlled Group for any reason other than death or the date distribution must
commence to a participant under Section 18.5 or 18.9A of this Trust and Plan. In
the event of such late retirement, such participant shall be entitled to receive
an amount equal to the sum of the amounts then credited to all the accounts held
for his benefit. Except as otherwise provided in Section 18.1 or 18.1A hereof,
such amounts shall be distributed or shall commence to be distributed as soon as
reasonably possible after his date of retirement but not later than sixty (60)
days after the close of the plan year which includes his date of late
retirement. Such distribution shall be made in accordance with the provisions of
Article XVIII or XVIII-A hereof.

                16.4 DISABILITY RETIREMENT. A participant who becomes
permanently and totally disabled pursuant to Section 27 of the Adoption
Agreement may apply to the Administrator for disability retirement benefits. If
the Administrator shall determine that the participant is permanently and
totally disabled, his date of disability retirement shall be deemed to have been
the date on which his application for benefits under this Article XVI was filed
with the Administrator and he will be deemed to have ceased to be a participant
on that date. Such a disabled participant shall be

                               RETIREMENT BENEFITS
                                      16-2


<PAGE>   127



entitled to receive a distribution pursuant to Article XVIII or XVIII-A hereof
of an amount equal to the sum of the amounts, if any, then credited to all the
accounts held for his benefit. Except as otherwise provided in Section 18.1 or
18.1A hereof, such amounts shall be distributed or shall commence to be
distributed on such date as shall be selected by the participant, but not later
than sixty (60) days after the close of the plan year which includes his normal
retirement date.

                16.5 APPLICATION FOR BENEFITS. Each participant who is eligible
for benefits under this Article XVI shall apply therefor on a form which shall
be given to him for that purpose by the Administrator; provided, however, that
the foregoing requirement shall not apply in any case in which a participant
shall be unable to make such application for physical, mental or any other
reason satisfactory to the Administrator. Upon finding that such participant
satisfies the eligibility requirements for benefits under this Article XVI, the
Administrator shall promptly notify the Trustee of his eligibility and of the
method of distribution selected in accordance with Article XVIII or XVIII-A
hereof.

                               RETIREMENT BENEFITS
                                      16-3


<PAGE>   128



                                  ARTICLE XVII
                                  ------------

                                      DEATH
                                      -----

                17.1 DEATH OF A PARTICIPANT. In the event of the termination of
employment of a participant by reason of his death, his death beneficiary shall
be entitled to receive a distribution in an amount equal to the amounts then
credited to all the accounts held for his benefit plus the proceeds of any life
insurance contracts purchased on his life under Article X hereof. Such amount
shall be distributed or shall commence to be distributed as soon as reasonably
possible after the participant's date of death but not later than sixty (60)
days after the close of the plan year which includes the date of the
participant's normal retirement date (or date of death, if later). Such
distribution shall be made in accordance with the provisions of Article XVIII or
XVIII-A hereof.

                17.2 DEATH OF A RETIRED OR TERMINATED PARTICIPANT PRIOR TO
COMMENCEMENT OF BENEFITS. In the event of the death of a retired or terminated
participant prior to the date distribution has been made or commenced to be made
to him, his death beneficiary shall be entitled to receive a distribution in an
amount equal to his vested interest and his personal accounts. The Vested
Percentage of a retired or terminated participant shall not increase due to his
death. Such amount shall be distributed or shall commence to be distributed as
soon as reasonably possible after the participant's date of death but not later
than sixty (60) days after the close of the plan year which includes the date of

                                      DEATH
                                      17-1


<PAGE>   129



the participant's normal retirement date (or date of death, if later). Such
distribution shall be made in accordance with the provisions of Article XVIII or
XVIII-A hereof. The balance, if any, credited to the deceased participant's
employer contribution and match accounts shall be forfeited as of his date of
death pursuant to Section 15.3 hereof.

                17.3 DEATH OF A RETIRED OR TERMINATED PARTICIPANT AFTER
COMMENCEMENT OF BENEFITS. In the event of the death of a retired or terminated
participant after the date of distribution or the commencement of distribution
to him, no benefits shall be payable to his death beneficiary except to the
extent provided for by the method under which the retired or terminated
participant was receiving distributions under Article XVIII or XVIII-A hereof.

                17.4 BENEFICIARY OF A PARTICIPANT. Unless a participant or
former participant has designated a death beneficiary in accordance with the
provisions of Section 17.5 hereof, his death beneficiary shall be deemed to be
the person or persons in the first of the following classes in which there are
any survivors of such participant:

                (a)        his spouse at the time of his death;

                (b)        his issue, per stirpes;

                (c)        his parents; and

                (d)        the executor or administrator of his estate.

                17.5 DESIGNATION OF ALTERNATE BENEFICIARY. In lieu of having the
amounts distributable pursuant to this Article XVII distributed to a death
beneficiary determined in accordance with

                                      DEATH
                                      17-2


<PAGE>   130



the provisions of Section 17.4 hereof, a participant or former participant may
sign a document designating a death beneficiary or death beneficiaries to
receive such amounts. If the participant is married, any such designation shall
be effective only if the spouse of the participant is the sole primary
beneficiary or consents to such designation in accordance with Section 28.8
hereof.

                17.6 QUALIFIED  PRERETIREMENT  SURVIVOR  ANNUITY.
Notwithstanding the foregoing Sections 17.4 and 17.5, in the event the Company
has elected to make annuity forms of distribution the normal form of
distribution to participants pursuant to Article XVIII-A hereof, the vested
account balance of a married participant who dies prior to his Annuity Starting
Date shall be applied toward the purchase of an annuity for the life of his
surviving spouse, unless such benefit shall be waived by the participant as
provided herein. The surviving spouse may elect to have such annuity distributed
within a reasonable period after the participant's death.

                Any waiver election referred to in the preceding paragraph shall
be made within the period which begins on the earlier of (a) the first day of
the plan year in which the participant attains age thirty-five (35), or (b) the
date on which the participant incurs a termination of employment, and ends on
the date of the participant's death. A participant who will not yet attain age
thirty-five (35) as of the end of any current plan year may make a special
qualified election to waive the annuity payable to his spouse upon his death for
the period beginning on the date of such

                                      DEATH
                                      17-3


<PAGE>   131



election and ending on the first day of the plan year in which the participant
will attain age thirty-five (35). Such election shall not be valid unless the
participant receives a written explanation of the survivor annuity which is
comparable to that provided to the Participant pursuant to Section 18.5A hereof.
Qualified preretirement survivor annuity coverage will be automatically
reinstated as of the first day of the plan year in which the participant attains
age thirty-five (35). Any new waiver on or after such date shall be subject to
the full requirements of this Section 17.6.

                Any election to waive qualified preretirement survivor annuity
coverage shall be in writing and shall be effective only if the participant's
spouse consents to the election in accordance with Section 28.8 hereof. The
election shall designate a specific non-spouse beneficiary, including any class
of beneficiaries or any contingent beneficiaries, which may not be changed
without the spouse's consent, unless the spouse shall in the original consent
expressly permit further designations by the participant. Any election by a
participant to waive the qualified preretirement survivor annuity described
herein shall be revocable at any time up to the date of the participant's death.
Any such revocation shall be automatically effective without the consent of the
participant's spouse.

                The Administrator shall provide each participant, within the
period beginning with the earlier of (i) the first day of the plan year in which
the participant attains age thirty-two (32) or

                                      DEATH
                                      17-4


<PAGE>   132



(ii) a reasonable period following his termination of employment, and ending
with the close of the plan year preceding the plan year in which the participant
attains age thirty-five (35), a written explanation of the surviving spouse's
rights under this Section 17.6. In the case of a participant hired by a
Participating Company after age thirty-five (35), such written explanation shall
be provided within a reasonable period after the individual becomes a
participant in the Trust and Plan.

                17.7 ADMINISTRATOR TO NOTIFY TRUSTEE. Upon the death of a
participant or a former participant, the Administrator shall immediately advise
the Trustee of the identity of such partici- pant's death beneficiary or
beneficiaries. The Trustee shall be completely protected in making distributions
to any person or persons in accordance with the instructions it receives from
the Administrator.

                17.8 INCOMPLETE DISPOSITION. In the event that a participant or
former participant dies at a time when he has a designation on file with the
Administrator which does not dispose of all of the amounts distributable under
this Trust and Plan upon his death, then the amounts distributable on behalf of
said participant or former participant, the disposition of which was not
determined by the deceased participant's or former participant's designation,
shall be distributed to a death beneficiary determined under the provisions of
Section 17.4 hereof. Any insurance proceeds for which there is no living
beneficiary named shall be distributed in accordance with the terms of the
insurance contract.

                                      DEATH
                                      17-5


<PAGE>   133



                17.9 AMBIGUITY OF BENEFICIARY DESIGNATION. Any ambiguity in a
participant's death beneficiary designation shall be resolved by the
Administrator. Subject to Section 17.5 hereof, the Administrator may direct a
participant to clarify his designation and if necessary execute a new
designation containing such clarification.

                                      DEATH
                                      17-6


<PAGE>   134



                                  ARTICLE XVIII
                                  -------------

                                  DISTRIBUTIONS
                                  -------------

                18.1 DATE OF DISTRIBUTIONS. Distributions will normally commence
as of the dates specified in Articles XV, XVI and XVII hereof. However, if
permitted by Section (30) of the Adoption Agreement, a participant or his
beneficiary may elect in writing, subject to Section 18.5 hereof, to defer any
distribution until a date not later than a date indicated in the Adoption
Agreement.

                18.2 METHOD OF DISTRIBUTION. Any distribution to be made
pursuant to Article XV, XVI or XVII hereof may be made pursuant to one or a
combination of the methods of distribution permitted under Section (28) of the
Adoption Agreement, as shall be selected by the participant, former participant
or beneficiary of a deceased participant. Generally, such methods of
distribution shall be:

                (a)        a single lump sum distribution; and

                (b)        nearly equal monthly, quarterly or annual
                           installments over a period selected by the
                           participant, which shall not exceed the maximum
                           permissible period under Section 401(a)(9) of the
                           Code.

If no method is selected, distribution shall be made in the lump sum form.

                18.3 ADMINISTERING DISTRIBUTION OF ACCOUNTS. Upon direction of
the Administrator, the Trustee shall make payment from the Trust Fund to the
participant or his beneficiary as the case may be. As long as there remain any
amounts credited to an account, the Trustee shall continue to maintain and
administer said

                                  DISTRIBUTIONS
                                      18-1


<PAGE>   135



account in accordance with the terms and provisions of the Trust and Plan.

                18.4 LUMP SUM PAYMENT OF SMALL AMOUNTS. Notwithstanding any
contrary provision of this Trust and Plan, in the event that the vested interest
and personal accounts of a retired, terminated or deceased participant have a
value less than or equal to Three Thousand Five Hundred Dollars ($3,500.00), the
Administrator shall direct the Trustee to distribute such vested interest and
personal accounts in a single lump sum payment without the consent of the
participant or his beneficiary.

                18.5 RESTRICTIONS. Notwithstanding any other provisions of this
Trust and Plan, distributions hereunder shall be subject to the following
restrictions:

            (a)   in the case of a living participant or former participant:

                  (i)   distribution must commence on or before:

                        (A)   the April 1 following the end of the calendar year
                              in which he attains age seventy and one-half
                              (70-1/2) or retires, whichever is later, if the
                              participant shall have attained age seventy and
                              one-half (70-1/2) prior to January 1, 1988 and was
                              not a five percent (5%) owner at any time after
                              the beginning of the plan year that ends in the
                              calendar year during which he attained age sixty-
                              six and one-half (66-1/2); or

                        (B)   the April 1 following the end of the calendar year
                              in which he attains age seventy and one-half
                              (70-1/2) in all other cases; and

                  (ii)  installment distributions shall not be payable over a
                        period of years in excess of his life expectancy or the
                        joint life expectancies of himself and his spouse or
                        beneficiary; and

                                  DISTRIBUTIONS
                                      18-2


<PAGE>   136




            (b)   in the case of a deceased participant or former participant,
                  distributions after his death shall be payable either:

                  (i)   within five (5) years of the date of his death; or

                  (ii)  if distribution commences to his beneficiary, either:

                        (A)   within one (1) year of the date of his death or on
                              a later date permitted under any lawful
                              regulations by the Secretary of the Treasury; or

                        (B)   if his spouse is his beneficiary, by the date such
                              participant would have attained age seventy and
                              one-half (70-1/2);

                        over a period not extending beyond the life expectancy
                        of such beneficiary; or

                  (iii) if the participant's distribution had commenced prior to
                        his death under a form of payment meeting the
                        requirements of subsection (a)(ii) above, such
                        distribution must be completed by the remainder of the
                        period specified in said subsection (a)(ii); and

            (c)   in the case of the death of a beneficiary who is the surviving
                  spouse of a deceased participant, a distribution commencing
                  after the death of the spouse shall be payable either:

                  (i)   within five (5) years of the date of the spouse's death;

                  (ii)  if distribution commences to the spouse's beneficiary
                        within one (1) year of the spouse's death or on a later
                        date permitted under any lawful regulations issued by
                        the Secretary of the Treasury, over a period not
                        extending beyond the life expectancy of such
                        beneficiary; or

            (d)   in the event payments are made to a participant's child, for
                  purposes of this Section 18.5, such payments shall be deemed
                  to be paid to the partici- pant's spouse if such payments will
                  become payable to such spouse upon such child's reaching
                  majority or any other event permitted under any lawful
                  regulations issued by the Secretary of the Treasury.

                                  DISTRIBUTIONS
                                      18-3


<PAGE>   137




A participant, former participant or beneficiary may elect to have his life
expectancy redetermined from time to time but not more frequently than annually.
In the event that a participant, former participant or beneficiary fails to make
such an election, then no redetermination shall be performed.

                Notwithstanding anything in this Trust and Plan to the contrary,
if a participant had filed an election with the Administrator prior to January
1, 1984, that his distribution either be under a form or commence after a date
not provided for in this Trust and Plan, as herein adopted, such distribution
shall nevertheless be made in accordance with such election, provided that the
provisions of such election complied with the terms of the Trust and Plan as in
effect on the date such election was filed with the Administrator.

                18.6 LUMP SUM VALUE OF INSTALLMENT METHOD OF DISTRIBUTIONS.
Notwithstanding any other provision of this Trust and Plan, the commuted lump
sum value of the amounts payable to a participant or former participant (whose
beneficiary is someone other than his spouse) pursuant to the installment method
of distribution, computed as of the commencement date of distribution, shall not
be less than fifty percent (50%) of the value of the amounts distributable on
his behalf under this Trust and Plan.

                18.7 REVALUATION OF UNDISTRIBUTED AMOUNTS. As long as there
remain any amounts credited to a participant's accounts, the Trustee shall
continue to maintain said accounts and said accounts shall be periodically
revalued in accordance with the provisions of

                                  DISTRIBUTIONS
                                      18-4


<PAGE>   138



Article XI hereof. In the event that a former participant shall have more than
one account, the Trustee, in its sole discretion, may consolidate said accounts
into a single distribution account.

                18.8 RESPONSIBILITY OF TRUSTEE REGARDING DISTRIBUTIONS. The
Trustee, upon notification by the Administrator as to the eligibility of and
method of distribution applicable to a participant, former participant or
beneficiary, shall take one or a combination of the following actions to
effectuate the method of distribution to such person:

                (a)        sell or surrender any contract or contracts of
                           insurance then held with respect to such person for
                           the cash surrender value thereof; or

                (b)        cause such contract or contracts to be converted
                           pursuant to any of the available lump sum or
                           installment options under such contract or
                           contracts; or

                (c)        make distributions of cash and insurance contracts
                           directly from the Trust Fund to such person.

                Any amounts received by the Trust Fund upon the surrender of any
life insurance contracts shall be credited to such person's distribution
account. Any amounts paid from the Trust Fund to an insurance company or to a
participant, former participant or beneficiary shall be debited to such account.

                18.9 DIRECT ROLLOVERS. This Section 18.9 applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Trust and Plan to the contrary that would otherwise limit a distributee's
election under this Section 18.9, a distributee may elect, at the time and in
the manner prescribed by the Administrator, to have any portion of an eligible
rollover

                                  DISTRIBUTIONS
                                      18-5


<PAGE>   139



distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.

                An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code Section
401(a)(9), and the portion of any distribution that is not includible in gross
income (determined with regard to the exclusion for net unrealized appreciation
with respect to employer securities).

                An eligible retirement plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.

                A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and

                                  DISTRIBUTIONS
                                      18-7


<PAGE>   140



the employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section
414(p), are distributees with regard to the interest of the spouse or former
spouse.

                A direct rollover is a payment by the Trust and Plan to the
eligible retirement plan specified by the distributee.

                                  DISTRIBUTIONS
                                      18-7


<PAGE>   141



                                 ARTICLE XVIII-A
                                 ---------------

                         DISTRIBUTIONS - ANNUITY OPTION
                         ------------------------------

               18.1A DATE OF DISTRIBUTION. Distributions will normally commence
as of the dates specified in Articles XV, XVI and XVII hereof, except that a
participant may elect to have a distribution made pursuant to Section 18.2A or
Section 18.3A below commence upon his attainment of the earliest retirement age
under the Trust and Plan. In addition, if permitted by Section (30) of the
Adoption Agreement, a participant or his beneficiary may elect in writing,
subject to Section 18.10A hereof, to defer any distribution until a date not
later than a date indicated in the Adoption Agreement.

               18.2A NORMAL METHOD. Unless an annuity method of distribution is
selected under Section 18.3A hereof or the annuity method has been designated
the normal method of distribution in Section (28) of the Adoption Agreement, the
normal method of distribution of amounts distributable to a participant, former
participant or his beneficiary pursuant to Articles XV, XVI or XVII hereof shall
be a single lump sum payment.

               18.3A ANNUITY METHODS OF DISTRIBUTION. In lieu of receiving a
single lump sum payment pursuant to Section 18.2A, or if the normal method of
distribution selected in Section (28) of the Adoption Agreement is the Annuity
Method, a participant, former participant or beneficiary of a deceased
participant may elect to receive the amounts distributable to him pursuant to
Articles XV, XVI and XVII in the form of an annuity contract purchased for him

                                  DISTRIBUTIONS
                                      18-1A


<PAGE>   142



from an insurance company by the Trustee pursuant to Section 18.11A hereof.
Unless another form of annuity contract is selected under Section 18.4A, any
such annuity contract shall normally provide by its terms for benefits to be
paid:

               (a)        to a married participant or a married former
                          participant in the Spouse's Annuity Form described
                          in Section 18.4A; and

               (b)         to an unmarried participant, an unmarried former
                           participant or a beneficiary of a participant in
                           the Full Cash Refund Life Annuity Form described in
                           Section 18.4A.

               18.4A OPTIONAL METHODS OF DISTRIBUTION. A participant, a former
participant, or a beneficiary of a participant may elect, in lieu of receiving
the amounts distributable to him pursuant to the normal methods of distribution
set forth in Section 18.2A or Section 18.3A, to receive such amounts pursuant to
any one or a combination of the following optional methods of distribution
permitted under Section (28)(b) of the Adoption Agreement:

               FORM 1. LIFE ANNUITY FORM. A participant who receives payment of
               his retirement benefits under the Life Annuity Form, shall
               receive an immediate annuity providing retirement benefit
               payments during his life. No benefits shall be payable after the
               death of the participant.

               FORM 2. SPOUSE'S ANNUITY FORM. A participant who receives payment
               of his retirement benefits under the Spouse's Annuity Form, shall
               receive an immediate annuity providing retirement benefit
               payments during his life with the provision that after his death
               50% of his monthly retirement benefit shall continue during the
               life of and shall be paid to the person who was his spouse on the
               date his benefits commence.

               FORM 3. JOINT AND SURVIVOR FORM. A participant who receives
               payment of his retirement benefits under the Joint and Survivor
               Form shall receive retirement benefit payments during his life,
               with the provision that after his death one hundred percent
               (100%) or fifty percent (50%), as shall be selected by the
               participant ("Selected Percentage"), of

                                  DISTRIBUTIONS
                                      18-2A


<PAGE>   143



               his monthly retirement benefit shall continue during the life of
               and shall be paid to such beneficiary as he shall nominate by
               written designation duly filed with the Administrator or its
               designated representative.

               FORM 4. LIFE-PERIOD CERTAIN FORM. A participant who receives
               payment of his retirement benefits under the Life-Period Certain
               Form shall receive retirement benefit payments during his life,
               with the provision that, in the event the participant shall die
               before he shall have received retirement benefit payments for a
               period of sixty (60), one hundred twenty (120), or one hundred
               eighty (180) months, as selected by the participant ("Selected
               Period"), after his death one hundred percent (100%) of his
               monthly retirement benefit shall continue for the remainder of
               said Selected Period to such beneficiary as he shall have
               nominated by written designation duly filed with the
               Administrator or its designated representative.

               FORM 5. FULL CASH REFUND LIFE ANNUITY FORM. A participant who
               receives payment of his retirement benefits under the Full Cash
               Refund Life Annuity Form shall receive retirement benefit
               payments during his life, with the provision that, in the event
               the participant shall die before he shall have received payments
               of retirement benefits aggregating the single lump sum amount
               used to purchase the annuity contract which is to be used to
               provide benefits with respect to such participant, the balance of
               such single lump sum amount ("Full Cash Refund") shall be paid in
               a single lump sum to such beneficiary as he shall have nominated
               by written designation duly filed with the Administrator or its
               designated representative.

               FORM 6. LUMP SUM FORM. A participant who receives payment of his
               retirement benefits under the Lump Sum Form shall receive a
               single lump sum payment upon the date his retirement benefits
               would otherwise have commenced under the Trust and Plan.

               FORM 7.  OTHER FORM.  A participant who receives payment of
               his retirement benefits under an Other Form shall receive
               his benefits in a form described in the Adoption Agreement.

               18.5A NOTICE OF METHODS OF DISTRIBUTION. If the annuity method
has been designated the normal method of distribution, the Administrator shall,
no less than thirty (30) days and no more than ninety (90) days prior to the
Annuity Starting Date of a

                                  DISTRIBUTIONS
                                      18-3A


<PAGE>   144



participant, former participant or beneficiary, provide each such individual a
written explanation of the terms and conditions of the normal methods of
distribution described in Section 18.3A, the individual's right to make and the
effect of an election of an optional form of distribution, the rights of a
participant's or former participant's spouse and the right to revoke and the
effect of revocation of a prior election of an optional method of distribution.

               18.6A ELECTION OF ANNUITY CONTRACT OR OPTIONAL METHOD OF PAYMENT.
To elect an annuity contract as set forth in Section 18.3A or one or a
combination of the optional methods of distribution, a participant, former
participant or beneficiary shall notify the Administrator of such election in
writing prior to the date his retirement benefits become distributable pursuant
to Article XV, XVI or XVII hereof. If either the annuity method of distribution
has been designated the normal method of distribution or a married participant
or former participant has elected to receive an annuity contract pursuant to
Section 18.3A above and further has elected to receive his retirement benefits
under a form other than the Spouse's Annuity Form, such election shall not be of
any effect and the participant or former participant shall be treated the same
as though his election had not been made unless the participant's spouse
consents in writing to such election in accordance with Section 28.8 hereof. Any
such election by a married participant shall designate a specific optional
method of distribution which shall not be changed without his spouse's

                                  DISTRIBUTIONS
                                      18-4A


<PAGE>   145



consent, unless the spouse's original consent expressly permits further changes
by the participant.

               A married participant shall be allowed to make such election no
less than thirty (30) days nor more than ninety (90) days after having received
a written explanation of the joint and survivor annuity benefit pursuant to
Section 18.5A hereof. The date a participant's retirement benefits become
distributable pursuant to Article XV or XVI hereof shall be postponed, if
necessary, to provide such ninety (90) days unless he makes an earlier election.
In addition to the foregoing, a participant may revoke a prior election and
elect another optional method of distribution, if desired, as long as such
ninety (90) day period has not expired. The number of revocations hereunder
shall not be limited.

               18.7A LUMP SUM PAYMENT OF SMALL AMOUNTS. Notwithstanding any
contrary provision of this Trust and Plan, in the event that the vested interest
and personal accounts of a retired, terminated or deceased participant have a
value less than or equal to Three Thousand Five Hundred Dollars ($3,500.00), the
Administrator shall direct the Trustee to distribute such vested interest and
personal accounts in a single lump sum payment without the consent of the
participant or beneficiary. Any such lump sum payment shall be in full
settlement of such participant's or beneficiary's rights under this Trust and
Plan.

                18.8A LUMP SUM VALUE OF OPTIONAL METHODS OF DISTRIBUTIONS.
Notwithstanding any other provisions of this Trust and Plan, the

                                  DISTRIBUTIONS
                                      18-5A


<PAGE>   146



commuted lump sum value of the amounts payable to a participant or former
participant (whose beneficiary is someone other than his spouse) pursuant to any
optional method of distribution, computed as of the commencement date of
distribution, shall not be less than fifty percent (50%) of the value of the
amounts distributable on his behalf under the Trust and Plan.

               18.9A REVALUATION OF UNDISTRIBUTED AMOUNTS. As long as there
remain any amounts credited to a participant's accounts, the Trustee shall
continue to maintain said accounts and said accounts shall be periodically
revalued in accordance with the provisions of Article XI hereof. In the event
that a former participant shall have more than one account, the Trustee, in its
sole discretion, may consolidate said accounts into a single distribution
account.

                18.10A RESTRICTIONS ON DISTRIBUTIONS. Notwithstanding any other
provisions of this Trust and Plan, distributions hereunder shall be subject to
the following restrictions:

            (a)   in the case of a living participant or former participant:

                  (i)   distribution must commence on or before:

                        (A)   the April 1 following the end of the calendar year
                              in which he attains age seventy and one-half
                              (70-1/2) or retires, whichever is later, if the
                              employee shall have attained age seventy and
                              one-half (70-1/2) prior to January 1, 1988 and was
                              not a five percent (5%) owner at any time after
                              the beginning of the plan year that ends in the
                              calendar year during which he attained age
                              sixty-six and one-half (66-1/2); or

                        (B)   the April 1 following the end of the calendar year
                              in which he attains age

                                  DISTRIBUTIONS
                                      18-6A


<PAGE>   147



                        seventy and one-half (70-1/2) in all other cases; and

                  (ii)  installment distributions shall not be payable over a
                        period of years in excess of his life expectancy or the
                        joint life expectancies of himself and his spouse or
                        beneficiary; and

                  (iii) annuities cannot be issued exceeding his life expectancy
                        or the joint life expectancies of himself and his spouse
                        or beneficiary; and

            (b)   in the case of a deceased participant or former participant,
                  distributions after his death shall be payable either:

                  (i)   within five (5) years of the date of his death; or

                  (ii)  if distribution commences to his beneficiary, either:

                        (A)   within one (1) year of the date of his death or on
                              a later date permitted under any lawful
                              regulations by the Secretary of the Treasury; or

                        (B)   if his spouse is his beneficiary, by the date such
                              employee would have attained age seventy and
                              one-half (70-1/2);

                        over a period not extending beyond the life expectancy
                        of such beneficiary; or

                  (iii) if the participant's distribution had commenced prior to
                        his death under a form of payment meeting the
                        requirements of subsection (a)(ii) or (a)(iii) above,
                        such distribution must be completed by the remainder of
                        the period specified in said subsection (a)(ii) or
                        (a)(iii); and

                  (iv)  if the participant's distribution had not commenced
                        prior to his death under a form of payment meeting the
                        requirements of subsection (a)(ii) or (a)(iii) above and
                        the participant's spouse is entitled to a distribution
                        hereunder but dies prior to the commencement of such
                        distribution, then the limitations of this subsection
                        (b) shall be applied as if the spouse were the
                        participant; and

                                  DISTRIBUTIONS
                                      18-7A


<PAGE>   148




            (c)   in the case of the death of a beneficiary who is the surviving
                  spouse of a deceased participant, a distribution commencing
                  after the death of the spouse shall be payable either:

                  (i)   within five (5) years of the date of the spouse's death;

                  (ii)  if distribution commences to the spouse's beneficiary
                        within one (1) year of the spouse's death or on a later
                        date permitted under any lawful regulations issued by
                        the Secretary of the Treasury, over a period not
                        extending beyond the life expectancy of such
                        beneficiary; or

            (d)   in the event payments are made to a participant's child, for
                  purposes of this Section 18.9A such payments shall be deemed
                  to be paid to the participant's spouse if such annuity
                  payments will become payable to such spouse upon such child's
                  reaching majority or any other event permitted under any
                  lawful regulations issued by the Secretary of the Treasury.

A participant, former participant or beneficiary may elect to have his life
expectancy redetermined from time to time but not more frequently than annually.
In the event that a participant, former participant or beneficiary fails to make
such an election, then no recalculation shall be performed.

             Notwithstanding anything in this Trust and Plan to the contrary, if
a participant had filed an election with the Administrator prior to January 1,
1984, that his distribution either be under a form or commence after a date not
provided for in this Trust and Plan, as herein adopted, such distribution shall
nevertheless be made in accordance with such election, provided that the
provisions of such election complied with the terms of the Trust and Plan as in
effect on the date such election was filed with the Administrator.

                                  DISTRIBUTIONS
                                      18-8A


<PAGE>   149



             18.11A RESPONSIBILITY OF TRUSTEE REGARDING DISTRIBUTIONS. The
Trustee, upon notification by the Administrator as to the eligibility of and
method of distribution applicable to a participant, former participant or
beneficiary, shall take one or a combination of the following actions to
effectuate the method of distribution to such person:

                  (a)      purchase from an insurance company a fully paid-up,
                           nontransferable annuity contract or contracts; or

                  (b)      sell or surrender any contract or contracts of
                           insurance then held with respect to such person for
                           the cash surrender value thereof; or

                  (c)      cause such contract or contracts to be converted
                           pursuant to any of the available lump sum or
                           installment options under such contract or
                           contracts; or

                  (d)      make distributions of cash and insurance contracts
                           directly from the Trust Fund to such person.

             In the event that the Trustee, pursuant to this Section 18.11A,
obtains an annuity contract for the benefit of a participant, former participant
or a beneficiary, the Trustee shall, after having selected such settlement
options and placed such restrictive endorsements thereon as are directed by the
Administrator, transfer ownership of the contract or contracts to such
participant, former participant or beneficiary and deliver said contract or
contracts to him. The delivery of said contract or contracts shall be in full
settlement of such participant's, former participant's or beneficiary's rights
under this Plan. The Company, other Participating Companies and Affiliates, the
Administrator and the Trustee shall not be responsible for:

                                  DISTRIBUTIONS
                                      18-9A


<PAGE>   150



             (a)           any failure on the part of any insurance company to
                           make any payments or provide any benefit under any
                           annuity contract;

             (b)           for the action or inaction of any person which may
                           render any annuity contract invalid or
                           unenforceable; and

             (c)           any inability to perform or delay in performing any
                           act occasioned by any provisions of any annuity
                           contract or restriction imposed by any insurance
                           company or by any other person.

             Any amounts received by the Trust Fund upon the surrender of any
life insurance contracts shall be credited to such person's distribution
account. Any amounts paid from the Trust Fund to an insurance company or to a
participant, former participant or beneficiary shall be debited to such account.

             18.12A DIRECT ROLLOVERS. This Section 18.12A applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Trust and Plan to the contrary that would otherwise limit a distributee's
election under this Section 18.12A, a distributee may elect, at the time and in
the manner prescribed by the Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.

             An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee or the joint lives (or

                            DISTRIBUTIONS - ANNUITIES
                                     18-11A


<PAGE>   151



joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section 401(a)(9), and the
portion of any distribution that is not includible in gross income (determined
with regard to the exclusion for net unrealized appreciation with respect to
employer securities).

             An eligible retirement plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.

             A distributee includes an employee or former employee. In addition,
the employee's or former employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), are
distributees with regard to the interest of the spouse or former spouse.

             A direct rollover is a payment by the Trust and Plan to the
eligible retirement plan specified by the distributee.

                            DISTRIBUTIONS - ANNUITIES
                                     18-11A


<PAGE>   152



                                   ARTICLE XIX
                                   -----------

                       THE TRUSTEE, ITS POWERS AND DUTIES
                       ----------------------------------

                19.1 OBLIGATIONS AND DUTIES. The Trustee shall not be obligated
to institute any action or proceeding to compel a Participating Company to make
any contributions to this Trust, nor shall the Trustee be obligated to make any
inquiry as to whether any amount deposited with it is the amount provided to be
deposited under the terms of Articles V, VI or VII. The Trustee shall keep books
of account which shall show all receipts and disbursements and a complete record
of the operation of the Trust, and the Trustee shall at least once a year and at
such other times as the Company or the Administrator shall so request render a
report of the operation of this Trust to the Company and the Administrator. The
Trustee shall file with the Internal Revenue Service such returns and other
information concerning the Trust Fund as may be required of the Trustee by the
Code and any lawful Regulations issued by the Treasury Department thereunder.
The Trustee shall not be obligated to pay any interest on any funds which may
come into its hands. The Trustee is a party to this Trust and Plan solely for
the purposes set forth in this instrument and to perform the acts herein set
forth, and no obligation or duty shall be expected or required of it except as
expressly stated herein or in ERISA and any lawful Regulations issued thereunder
by the Secretary of Labor or the Secretary of the Treasury. The Trustee may
consult with counsel (who may or may not be counsel for the Company or any

                                     TRUSTEE
                                      19-1


<PAGE>   153



other Participating Company) selected by the Trustee concerning any question
which may arise with reference to its powers or duties under this Trust and
Plan, and the opinion of such counsel shall be full and complete authority and
protection in respect of any action taken, suffered or omitted by the Trustee in
good faith and in accordance with such opinion, provided due care is exercised
in the selection of such counsel.

                19.2 RESIGNATION BY TRUSTEE. The Trustee may resign from this
Trust by mailing to the Company a written notice of resignation addressed to the
Company at the last address of the Company on file with the Trustee, or by
delivering such written notice to the Company at such address. The Company may
remove the Trustee by written notice of such removal mailed to the Trustee at
the last address of the Trustee on file with the Company, or by delivering such
written notice to the Trustee at such address. Such resignation or removal shall
take effect on the date specified in the notice of resignation or removal, but
not less than thirty (30) days, nor more than sixty (60) days, following the
date of mailing of such notice or delivery of such notice if it be not mailed
unless a shorter period is mutually acceptable. Upon such resignation or
removal, the Trustee shall be entitled to its fees to the effective date of
resignation or removal and any and all costs or expenses paid or incurred by the
Trustee in connection with this Trust and Plan. In no event shall such
resignation or removal terminate this Trust and Plan, but the Company shall
forthwith appoint a successor Trustee to carry out the terms of this Trust

                                     TRUSTEE
                                      19-2


<PAGE>   154



and Plan, which successor Trustee shall be any individual, trust company or bank
selected by the Company. In case of the resignation or removal of the Trustee,
the Trustee shall forthwith turn over to the successor Trustee all assets in its
possession, and copies of such records as may be necessary to permit the
successor Trustee to carry out its duties.

                19.3 ADMINISTRATION EXPENSES. The expenses of administration of
the Trust incurred by the Trustee, including counsel fees and including
Trustee's fees as such may from time to time be agreed upon between the Company
and the Trustee, shall be paid in any one of the following manners as determined
by the Company in its sole discretion:

                (a)        paid out of the annual contributions by the
                           Participating Companies before allocation of such
                           contribution is made among the accounts of the
                           Trust;

                (b)        paid directly by the Participating Companies to the
                           Trustee; or

                (c)        paid out of the Trust Fund.

Notwithstanding the foregoing, in no event will any Trustee who is an employee
of a Participating Company receive compensation from the Trust and Plan, except
for expenses properly and actually incurred. Fees and expenses of the Trustee
which have not been paid will be deemed to be a lien upon the Trust Fund.

                19.4 OWNERSHIP OF INSURANCE CONTRACTS. The Trustee shall be the
complete and absolute owner of the insurance contracts held in the Trust and of
each and every incident of ownership thereof, except as otherwise provided
herein, shall be entitled to receive

                                     TRUSTEE
                                      19-3


<PAGE>   155



all benefits due thereunder, except that any amount which may become due as a
death benefit under any such insurance contract shall be payable directly to the
death beneficiary determined under Article XVII hereof, shall have such powers,
rights, duties, options, or privileges which belong to the absolute owner of
such contracts or which are granted by the terms of any such contracts or by the
terms of this Trust and Plan, and, without intending to limit the generality of
the foregoing, it is hereby provided that the Trustee shall have the right to
borrow money upon the direction of the Administrator for the payment of premiums
on the security of contracts and to pledge the same, provided that nothing
herein contained shall be construed to permit the use of, and it is hereby
expressly made prohibitive of the use of any contract or contracts to the
advantage, benefit, gain or detriment of any other contract or contracts.

                19.5 RECEIPTS AND RELEASES. The Trustee is hereby authorized to
execute all necessary receipts and releases to the insurance company or
companies concerned, and shall be under the duty upon being advised by the
Administrator that the proceeds of any such contracts have become payable to
make efforts to collect such sums as may appear to be due; provided, however,
that the Trustee shall not be required to institute suit or maintain litigation
to collect the proceeds of any contract unless it is in possession of funds
sufficient for that purpose or unless it has been indemnified to its
satisfaction for its counsel fees, costs, disbursements and all other expenses
and liabilities to which it

                                     TRUSTEE
                                      19-4


<PAGE>   156



may in its judgment be subjected by such action on its part, provided, further,
that the Trustee may utilize the proceeds of any such contract to meet expenses
incurred in connection with enforcing payment of such contract. Notwithstanding
anything to the contrary herein contained, the Trustee is authorized, with the
written approval of the Administrator, to compromise and adjust claims arising
out of the contracts or any of them upon such terms and conditions as it may
deem just, and the decision of the Trustee shall be binding and conclusive upon
all persons interested in the Trust and Plan.

                19.6 SEGREGATION OF ASSETS. Any segregation of assets required
under this Trust may be made in cash or in kind, or partly in cash and partly in
kind, according to the discretion of the Trustee, but any such segregation shall
be made on the basis of the most recent valuation made pursuant to Article XI.

                19.7 CO-TRUSTEES. In the event that the Company shall have
appointed more than one individual, trust company or bank to act jointly as
Trustee hereunder, any action which this Trust and Plan authorizes or requires
the Trustee to do shall be done by action of the majority of the then acting
trustees, or, in the case of two such persons acting jointly as Trustee, by
action of both such trustees. Such action may be taken at any meeting of the
trustees then acting or by written authorization and affirmative consent without
a meeting. The trustees, by written agreement among themselves, a copy of which
shall be filed with the Company and the Administrator, may allocate among
themselves any of the

                                     TRUSTEE
                                      19-5


<PAGE>   157



powers and duties of the Trustee under this Trust and Plan. In such event, the
trustee to whom a power or duty is allocated may take action with respect
thereto without the consent of any other trustee. Any person, firm, partnership
or corporation may rely upon the written signatures of such number of the
trustees as are hereunder empowered to take action as the signature of the
Trustee hereunder. Notwithstanding any other provision of this Trust and Plan to
the contrary, so long as at least one individual, trust company or bank shall
continue to act as Trustee hereunder, the Company shall not be under any duty to
appoint a successor to any trustee who shall resign or be removed.

                19.8 LIABILITY OF TRUSTEE. Except as otherwise provided in
ERISA, if the Trustee is one or more individuals who are employees of a member
of the Controlled Group, the Trustee and its members shall incur no personal
liability of any nature whatsoever in connection with any act done or omitted to
be done in carrying out its responsibilities under the terms of this Trust and
Plan or other responsibilities imposed upon such persons by ERISA or regulations
promulgated thereunder.

                                     TRUSTEE
                                      19-6


<PAGE>   158



                                   ARTICLE XX
                                   ----------

                                   INVESTMENTS
                                   -----------

                20.1 INVESTMENT POWERS AND DUTIES OF TRUSTEE. In addition to the
powers and duties conferred and imposed upon the Trustee by the other provisions
of this Trust and Plan, the Trustee shall, subject to the provisions of Articles
IX, X and XII, have the following powers and duties:

                (a) To invest and reinvest the principal and income of the Trust
Fund and keep the same invested with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, without distinction between
principal and income and without regard to any limitations, other than such
prudent man rule, prescribed by law or custom upon the investments of
fiduciaries, in each and every kind of property, whether real, personal or
mixed, tangible or intangible, and wherever situated, including but not limited
to contracts of an insurance company on the life of any participant (including
annuity contracts if distributions are made in the form of a life annuity
pursuant to Section (28)(b) of the Adoption Agreement), shares of any Regulated
Investment Company, units of any common trust fund of any bank or trust company
now in existence or hereafter established, shares of common, preference and
preferred stock, put and call options, rights, options, subscriptions, warrants,
trust receipts, investment trust certificates, mortgages, leases, bonds, notes,
debentures, equipment or collateral trust certificates and other corporate,
individual or government obligations, whether secured or unsecured; to invest
and reinvest in and retain any stocks, bonds or other securities of any
corporate trustee serving hereunder, or any parent or affiliate thereof; to
invest in commodities and commodity contracts; to invest and reinvest in any
time or savings deposits of the Trustee or any parent or affiliate thereof if
such deposits bear a reasonable rate of interest or of any bank, trust company,
or savings and loan institution, which deposits may but need not be guaranteed
by the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation; and in addition to become a general partner or limited
partner in any partnership or limited partnership the purposes of which are to
invest or reinvest the partnership assets in any such properties or deposits;

                                   INVESTMENTS
                                      20-1


<PAGE>   159



                (b) To invest a portion or all of the Trust Fund in units of any
common or group trust created solely for the purpose of providing a satisfactory
diversification of investments for participating trusts; provided that such
common or group trust, (i) limits participation thereunder to pension and
employer contribution trusts which qualify under Section 501(a) of the Code, as
amended, (ii) prohibits income and/or principal attributable to a participating
trust from being used for any purpose other than the exclusive benefit of the
employees or their beneficiaries of such participating trust, (iii) prohibits
assignment by a participating trust of any part of such participating trust's
equity or interest in the common or group trust, (iv) is created or organized in
the United States and is maintained at all times as a domestic trust in the
United States; as long as the Trustee holds such units hereunder, the instrument
establishing such common or group trust (including all amendments thereto) shall
be deemed to have been adopted and made a part of this Trust and Plan;

                (c) Upon direction by the Company, to invest or reinvest all or
a portion of the Trust Fund in qualifying employer securities and/or qualifying
employer real estate as such terms are defined in Section 4975 of the Code, as
amended, and Section 407(d) of ERISA, which investment may constitute more than
ten percent (10%) of the fair market value of the assets of the Trust Fund, and
to retain, or to sell, exchange or otherwise dispose of any such securities or
real estate held in this Trust Fund. In the event of any such investment, the
Trustee shall file with the appropriate District Director of Internal Revenue
such returns and other information as shall be required from time to time by the
Code, as amended, and valid regulations, rulings and procedures thereunder;

                (d) To sell, convert, redeem, exchange, grant options for the
purchase or exchange of, or otherwise dispose of, any real or personal property,
at public or private sale, for cash or upon credit, with or without security,
without obligation on the part of any person dealing with the Trustee to see to
the application of the proceeds of or to inquire into the validity, expediency
or propriety of any such disposal;

                (e) To manage, operate, repair, partition and improve and
mortgage or lease (with or without option to purchase) for any length of time
any real property held in the Trust Fund; to renew or extend any mortgage or
lease, upon any terms the Trustee may deem expedient; to agree to reduction of
the rate of interest on any mortgage note; to agree to any modification in the
terms of any lease or mortgage or of any guarantee pertaining to either of them;
to enforce any covenant or condition of any lease or mortgage or of any
guarantee pertaining to either of them or to waive any default in the
performance thereof; to exercise and enforce any right of foreclosure; to bid on
property on foreclosure; to take a deed in lieu of foreclosure with or without
paying consideration therefor and in connection therewith to release the
obligation on the bond

                                   INVESTMENTS
                                      20-2


<PAGE>   160



secured by the mortgage; and to exercise and enforce in any action, suit or
proceeding at law or in equity any rights or remedies in respect of any lease or
mortgage or of any guarantee pertaining to either of them;

                (f) To exercise, personally or by general or limited proxy, the
right to vote any shares of stock or other securities held in the Trust Fund; to
delegate discretionary voting power to trustees of a voting trust for any period
of time; and to exercise or sell, personally or by power of attorney, any
conversion or subscription or other rights appurtenant to any securities or
other property held in the Trust Fund;

                (g) To join in or oppose any reorganization, recapitalization,
consolidation, merger or liquidation, or any plan therefor, or any lease (with
or without an option to purchase), mortgage or sale of the property of any
organization the securities of which are held in the Trust Fund; to pay from the
Trust Fund any assessments, charges or compensation specified in any plan of
reorganization, recapitalization, consolidation, merger or liquidation, to
deposit any property with any committee or depositary; and to retain any
property allotted to the Trust Fund in any reorganization, recapitalization,
consolidation, merger or liquidation;

                (h) To borrow money from any lender (including the Trustee
hereunder, where applicable in its capacity as a banking corporation when
permitted to do so by the applicable laws and regulations then in effect) in any
amount and upon such terms and conditions and for such purposes as the Trustee
shall deem necessary; for any money so borrowed the Trustee may issue its
promissory note as Trustee and to secure the repayment of any such loan, with
interest, may pledge or mortgage all or any part of the Trust Fund, and no
person loaning money to the Trustee shall be obligated to see to the application
of the money loaned or to inquire into the validity, expediency or propriety of
any such borrowing;

                (i) To compromise, settle or arbitrate any claim, debt or
obligation of or against the Trust Fund; to enforce or abstain from enforcing
any right, claim, debt or obligation; and to abandon any property determined by
it to be worthless;

                (j) To continue to hold any property of the Trust Fund whether
or not productive of income; to reserve from investment and keep unproductive of
income, without liability for interest, such cash as it deems advisable or, in
its discretion, to hold the same, without limitation on duration, on deposit in
the commercial department or in an interest-bearing account in the savings
department of any bank, trust company, or savings and loan institution
(including the Trustee where applicable in its capacity as a banking
corporation) in which deposits are guaranteed by the

                                   INVESTMENTS
                                      20-3


<PAGE>   161



Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation;

                (k) To hold property of the Trust Fund in its own name or in the
name of a nominee, without disclosure of this Trust, or in bearer form so that
it will pass by delivery, but no such holding shall relieve the Trustee of its
responsibility for the safe custody and disposition of the Trust Fund in
accordance with the provisions of this Trust and Plan, and the Trustee's records
shall at all times show that such property is part of the Trust Fund;

                (l) To make, execute and deliver, as Trustee, any deeds,
conveyances, leases (with or without option to purchase), mortgages, options,
contracts, waiver or other instruments that the Trustee shall deem necessary or
desirable in the exercise of its powers under this Trust;

                (m) To employ, at the expense of the Trust Fund, agents who are
not regular employees of the Trustee, and to delegate in writing to them and
authorize them to exercise such powers and perform such duties required of the
Trustee hereunder without limitation as the Trustee may determine in its
uncontrolled discretion; the Trustee shall not be responsible for any loss
occasioned by any such agents selected by it with reasonable care;

                (n) To pay out of the Trust Fund all taxes imposed or levied
with respect to the Trust Fund and in its discretion to contest the validity or
amount of any tax, assessment, penalty, claim or demand respecting the Trust
Fund; however, unless the Trustee shall have first been indemnified to its
satisfaction or arrangements satisfactory to it shall have been made for the
payment of all costs and expenses, it shall not be required to contest the
validity of any tax, or to institute, maintain or defend against any other
action or proceeding either at law or in equity;

                (o) Except as otherwise provided in this Trust and Plan, to do
all acts, execute all instruments, take all proceedings and exercise all rights
and privileges with relation to any assets constituting a part of the Trust
Fund, which it may deem necessary or advisable to carry out the purposes of this
Trust and Plan;

                (p) During the minority or incapacity, in either case as
determined under applicable local law, of any participant, former participant or
beneficiary under this Trust and Plan, to make any payment to which such person
would otherwise be entitled pursuant to this Trust and Plan either to such
person or to the legal guardian of such person, and the receipt of either such
minor or incapacitated person or such legal guardian shall be a full discharge
and acquittance to the Trustee for such payment.

                                   INVESTMENTS
                                      20-4


<PAGE>   162



                (q) Upon direction by the Administrator, to purchase contracts
of life insurance on the lives of key persons whose death might affect adversely
the earnings of a Participating Company. Any such contracts shall be owned by
the Trustee and any and all benefits, including any amounts payable upon the
death of the person insured shall be payable to the Trustee and considered as an
investment for the benefit of the Trust as a whole.

                20.2 INVESTMENT MANAGER. Notwithstanding any provisions of this
Trust and Plan, the Company hereby retains the right to appoint, from time to
time, one or more:

                (a)        banks, as defined in the Investment Advisers Act of
                           1940;

                (b)        persons registered as investment advisers under
                           said Act; or

                (c)        insurance companies qualified to perform investment
                           advisory services under the laws of more than one
                           state;

to act as the Investment Manager or Managers of all or such portions of the
Trust Fund as the Company in its sole discretion shall direct. In order to serve
as Investment Manager, any such bank, person or insurance company must state in
writing to the Company and the Trustee that it meets the requirements set forth
in this Section 20.2 to be an Investment Manager and that it acknowledges that
it shall be a fiduciary with respect to this Trust and Plan during all periods
that it shall serve as such. During any period that an Investment Manager has
been appointed with respect to the Trust Fund or a portion thereof, it shall
have all powers normally given to the Trustee under Section 20.1 hereof with
respect to the management, acquisition or disposition of any asset of the Trust
Fund, or such portion thereof and the Trustee shall have no powers, duties or
obligations with respect to the

                                   INVESTMENTS
                                      20-5


<PAGE>   163



investment, management, acquisition or disposition of such assets. The Company
may remove any Investment Manager or change the portion of the Trust Fund at any
time subject to its management by written notice to the Trustee and the
Investment Manager. Any Investment Manager may resign by written notice to the
Company and the Trustee. Unless the Company appoints a successor to an
Investment Manager which has resigned or been removed or which is no longer
managing a portion of the Trust Fund, the powers, duties and obligations of the
Trustee with respect to the portion of the Trust Fund formerly managed by the
Investment Manager shall be automatically restored.

                20.3 INCOME FROM INVESTMENTS. All income from investment and
reinvestment made as provided in this Article XX shall be treated as principal,
and investments and reinvestment shall be made without distinction between
income and principal.

                20.4 PROHIBITED TRANSACTIONS. In no case shall the Trustee enter
into or engage in any transaction which is defined as a prohibited transaction
by Section 4975 of the Code or by Section 406 of ERISA, except to the extent any
such transaction is permitted under another provision of the Code or under a
valid regulation or exemption promulgated by a responsible agency of the federal
government.

                                   INVESTMENTS
                                      20-6


<PAGE>   164



                                   ARTICLE XXI
                                   -----------

                                 ADMINISTRATION
                                 --------------

                21.1 THE ADMINISTRATOR. The Administrator shall be any
person(s), corporation or partnership, (including the Company or a Participating
Company) as shall be designated in Section (38) of the Adoption Agreement. The
Company shall notify the Trustee of the identity of the Administrator and of any
change in the Administrator. Except as expressly set forth herein with respect
to the duties and responsibilities of the Trustee, the Retirement Savings
Committee, the Investment Manager or the Participating Companies, the
Administrator shall administer the Trust and Plan and shall have all powers and
duties granted or imposed on an "administrator" by ERISA. The Administrator
shall determine any and all questions of fact, resolve all questions of
interpretation of this instrument which may arise under any of the provisions of
this Trust and Plan as to which no other provision for determination is made
hereunder, and exercise all other powers and discretion necessary to be
exercised under the terms of this Trust and Plan which it is herein given or for
which no contrary provision is made. Subject to the provisions of Section 21.6,
the Administrator's decision with respect to any matter shall be final and
binding upon the Trustee and all other parties concerned, and neither the
Administrator nor any of its directors, officers or employees, if applicable,
shall be liable in that regard except for gross abuse of the discretion given it
and them under the terms of

                                 ADMINISTRATION
                                      21-1


<PAGE>   165



this Trust and Plan. All determinations of the Administrator shall be made in a
uniform, consistent and nondiscriminatory manner with respect to all
participants and beneficiaries in similar circumstances. The Administrator, from
time to time, may designate one or more persons or agents to carry out any or
all of its duties hereunder.

                21.2 DENIAL OF APPLICATION FOR BENEFITS. If any participant, any
beneficiary, or the authorized representative of a participant or beneficiary
shall file an application for benefits hereunder and such application is denied,
in whole or in part, he shall be notified in writing of the specific reason or
reasons for such denial unless the granting or denial of the application is in
the sole discretion of the Administrator in which event the notice to the
applicant shall state that the Administrator has denied the application pursuant
to the exercise of its discretionary powers under the Trust and Plan. The notice
shall also set forth the specific plan provisions upon which the denial is
based, an explanation of the provisions of Section 21.6 hereof, and any other
information deemed necessary or advisable by the Administrator.

                21.3 RETIREMENT SAVINGS COMMITTEE. The Board of the Company
shall appoint the members of a Retirement Savings Committee which shall consist
of three (3) or more members. Such Committee shall decide appeals of application
denials as provided in Section 21.6 and shall have such other powers and duties
as shall from time to time be assigned to the Committee by the Company. The
members of the Committee shall remain in office at the will of the Board,

                                 ADMINISTRATION
                                      21-2


<PAGE>   166



and the Board may remove any of said members, from time to time, with or without
cause. A member of the Committee may resign upon written notice to the remaining
member or members of the Committee and to the Company respectively. The fact
that a person is a participant or a former participant or a prospective
participant shall not disqualify him from acting as a member of the Committee.
In case of the death, resignation or removal of any member of the Committee, the
remaining members shall act until a successor-member shall be appointed by the
Board of the Company. Upon request, the Company shall notify the Trustee and the
Administrator in writing of the names of the original members of the Committee,
of any and all changes in the membership of the Committee, of the member
designated as Chairman and the member designated as Secretary, and of any
changes in either office. Until notified of a change, the Trustee and the
Administrator shall be protected in assuming that there has been no change in
the membership of the Committee or the designation of Chairman or of Secretary
since the last notification was filed with it. The Trustee and the Administrator
shall be under no obligation at any time to inquire into the membership of the
Committee or its officers. All communications to the Committee shall be
addressed to its Secretary at the address of the Company on file with the
Trustee.

                21.4 COMMITTEE PROCEDURES. On all matters and questions, the
decision of a majority of the members of the Committee shall govern and control,
but a meeting need not be called or held to make any decision. The Committee
shall appoint one of its members

                                 ADMINISTRATION
                                      21-3


<PAGE>   167



to act as its Chairman and another member to act as Secretary. The terms of
office of these members shall be determined by the Committee, and the Secretary
and/or Chairman may be removed by the other members of the Committee for any
reason which such other members may deem just and proper. The Secretary shall do
all things directed by the Committee. Although the Committee shall act by
decision of a majority of its members as above provided, nevertheless in the
absence of written notice to the contrary, every person may deal with the
Secretary and consider his acts as having been authorized by the Committee. Any
notice served or demand made on the Secretary shall be deemed to have been
served or made upon the Committee.

                21.5 OPERATION OF COMMITTEE. No member of the Committee shall be
disqualified from acting on any question because of his interest therein. No fee
or compensation shall be paid to any member of the Committee for his services as
such, but the Committee shall be reimbursed for its expenses by the
Participating Companies. The Committee and the Administrator may hire such
attorneys, accountants, actuaries, agents, clerks, and secretaries as it may
deem desirable in the performance of its functions, and the expense associated
with the hiring or retention of any such person or persons shall be paid
directly by the Participating Companies.

                21.6 APPEAL PROCESS. Any participant, any beneficiary, or any
authorized representative of a participant or beneficiary whose application for
benefits hereunder has been denied, in whole

                                 ADMINISTRATION
                                      21-4


<PAGE>   168



or in part, by the Administrator may upon written notice to the Committee
request a review by the Committee of such denial of his application. Such review
may be made by written briefs submitted by the applicant and the Administrator
or at a hearing, or by both, as shall be deemed necessary by the Committee. Any
such hearing shall be held in the main office of the Company on such date and at
such time as the Committee shall designate upon not less than seven (7) days'
notice to the applicant and the Administrator unless both of them accept shorter
notice. The Committee shall make every effort to schedule the hearing on a day
and at a time which is convenient to both the applicant and the Administrator.
After the review has been completed, the Committee shall render a decision in
writing, a copy of which shall be sent to both the applicant and the
Administrator. In rendering its decision, the Committee shall have full power
and discretion to interpret this Trust and Plan, to resolve ambiguities,
inconsistences and omissions, to determine any question of fact, to determine
the right to benefits of, and the amount of benefits, if any, payable to, the
applicant in accordance with the provisions of this Trust and Plan. Such
decision shall set forth the specific reason or reasons for the decision and the
specific plan provisions upon which the decision is based. Such decision shall
be final and binding on the applicant, the Trustee, and the Administrator.

                21.7 LIABILITY OF COMMITTEE MEMBERS. Neither the Committee nor
any of its members shall be liable for any act taken by the Committee pursuant
to any provision of this Trust and Plan

                                 ADMINISTRATION
                                      21-5


<PAGE>   169



except for gross abuse of the discretion given it and them hereunder. No member
of the Committee shall be liable for the act of any other member.

                                 ADMINISTRATION
                                      21-6


<PAGE>   170



                                  ARTICLE XXII
                                  ------------

                         PROHIBITION AGAINST ALIENATION
                         ------------------------------

                22.1 DEFINITIONS. Unless the context otherwise indicates, the
following terms used herein shall have the following meanings whenever used in
this Article XXII:

                (a)        The words "alternate payee" shall mean any spouse,
                           former spouse, child or other dependent of a
                           participant who is recognized by a domestic relations
                           order as having a right to receive all, or a portion
                           of, the benefits hereunder attributable to such
                           participant.

                (b)        The words "domestic relations order" shall mean, with
                           respect to any participant, any judgment, decree or
                           order (including approval of a property settlement
                           agreement) which both:

                             (i)    relates to the provision of child support,
                                    alimony payments or marital property rights
                                    to a spouse, former spouse, child or other
                                    dependent of the participant; and

                            (ii)    is made pursuant to a State domestic
                                    relations law (including a community
                                    property law).

                (c)        The words "qualified domestic relations order" shall
                           mean a domestic relations order which satisfies the
                           requirements of Section 414(p)(1)(A) of the Code.

                22.2 GENERAL PROHIBITION ON ALIENATION. Neither any property nor
any interest in any property held for the benefit of any participant, former
participant or beneficiary of a participant shall be transferred, alienated,
disposed of or in any manner encumbered, voluntarily, involuntarily or by
operation of law, nor, to the fullest extent permitted by law, shall it be
subject to attachment, execution, garnishment, sequestration or other legal or
equitable process while in the possession or control of the Trustee

                                   ALIENATION
                                      22-1


<PAGE>   171



except by an act of the Trustee or the participant, former participant or
beneficiary specifically authorized hereunder. If by reason of any act of any
participant, former participant or beneficiary, or by operation of law or by the
happening of any event, or for any reason, except by an act of the Trustee or
such person specifically authorized hereunder, such property or any interest
therein would, except for this provision, cease to be enjoyed by such person, or
if by reason of an attempt of such person to alienate, charge or encumber such
property or any interest therein, or by reason of the bankruptcy or insolvency
of such person, or by reason of any attachment, garnishment or other
proceedings, or by reason of any order, finding or judgment of court, either at
law or in equity, such property or any interest therein would, except for this
provision, vest in or be enjoyed by some person, firm or corporation otherwise
than as provided in this Trust and Plan, in any of such events, the trusts
herein expressed concerning all of such property so payable to or held for the
benefit of such person shall cease and terminate as to him. Thereafter during
his life such property, subject to such interests or rights, if any, as any
other person may have in or to such property as provided in this Trust and Plan,
shall be held by the Trustee according to its absolute discretion, but the
Trustee meanwhile may pay to or expend for the support, comfort and maintenance
of such participant, former participant or beneficiary, may pay to or expend for
the support, comfort and maintenance of his spouse and/or may pay to or expend
for the support, comfort and

                                   ALIENATION
                                      22-2


<PAGE>   172



maintenance of his child or children, such sums and such sums only, as directed
by the Administrator, in writing, retaining any undistributed part of such
property until such participant's, former participant's or beneficiary's death.

                22.3 DISTRIBUTION OF ASSETS ON DEATH. If any person who shall be
subject to the provisions of Section 22.2 hereof shall die before receiving all
of such property which he would have received except for the operation of the
provisions of said Section 22.2, then, upon or after his death, such
undistributed property shall be disposed of as follows:

                (a)        If such person was a participant, such
                           undistributed property shall be disposed of as
                           provided in such participant's designation of
                           beneficiary on file with the Trustee at the time of
                           his death, or as provided in Section 17.8 in the
                           event that such designation shall not provide for
                           complete distribution of such undistributed
                           property or no designation of beneficiary shall be
                           on file with the Trustee; or

                (b)        If such person shall be a beneficiary of a partici-
                           pant, such undistributed property shall be dis-
                           tributed to the person or persons who upon such
                           beneficiary's death would be entitled to inherit
                           such undistributed property under the laws of the
                           state in which the deceased participant was
                           domiciled, then in force, if such undistributed
                           property had then belonged to such beneficiary and
                           he had then died intestate domiciled in such state.

                22.4 NO RIGHT TO BENEFITS BY ALTERNATE PAYEE. Sections 22.2 and
22.3 above shall not be deemed to prohibit the creation, assignment or
recognition of a right to any benefit under the Trust and Plan payable in
respect of a participant to an alternate payee pursuant to a qualified domestic
relations order.

                                   ALIENATION
                                      22-3


<PAGE>   173



                22.5 NOTIFICATION OF PARTIES AND DETERMINATION WHETHER
QUALIFIED. In the event the Trust and Plan is served with a domestic relations
order, the Administrator shall promptly notify the concerned participant and any
concerned alternate payee of the receipt of such domestic relations order and
the Trust and Plan's procedures for determining whether such domestic relations
order is a qualified domestic relations order. Within a reasonable time after
receipt of such domestic relations order, the Administrator shall determine
whether such domestic relations order is a qualified domestic relations order
and shall notify the participant and any concerned alternate payee of its
determination.

                22.6 INTERIM PROCEDURES. During any period in which the issue of
whether a domestic relations order is a qualified domestic relations order is
being determined (whether by the Administrator, a court of competent
jurisdiction, or otherwise), the Administrator shall credit to a new separate
account under the Trust and Plan the amounts which would have been payable to an
alternate payee during such period if the order had been, during such period,
determined to be a qualified domestic relations order, and shall debit the
appropriate accounts of the participant with respect to whom the domestic
relations order was issued for such amounts. If, within eighteen (18) months
after the Trust and Plan is served with such domestic relations order, the
domestic relations order (or a modification thereof) is determined to be a
qualified domestic relations order, the Administrator shall hold and dispose of
the amounts credited to the segregated account established with respect

                                   ALIENATION
                                      22-4


<PAGE>   174



to such domestic relations order in accordance with the terms of the qualified
domestic relations order. If within eighteen (18) months after the Trust and
Plan is served with such domestic relations order, it is determined that the
domestic relations order is not a qualified domestic relations order or the
issue with respect to whether the domestic relations order is a qualified
domestic relations order is not resolved, the Administrator shall transfer the
amounts credited to the segregated account to the appropriate accounts
maintained for the benefit of the person who would have been entitled to such
amounts as though the Trust and Plan had never been served with such domestic
relations order. Any determination that a domestic relations order is a
qualified domestic relations order which is made after the close of the eighteen
(18) month period after the Trust and Plan was served with such domestic
relations order shall be applied prospectively only.

                22.7 INVESTMENT OF SEPARATE ACCOUNT. The amounts credited to any
new separate account which has been created under Section 22.6 above after the
Trust and Plan is served with a domestic relations order shall be invested as
the Administrator shall direct until the Administrator makes a determination
whether such domestic relations order is a qualified domestic relations order.

                22.8 REVIEW PROCEDURES. Any participant or alternate payee who
is affected by a domestic relations order served upon the Trust and Plan may
request a review by the Retirement Savings Committee of the Administrator's
determination with respect to the

                                   ALIENATION
                                      22-5


<PAGE>   175



qualification or lack of qualification of such domestic relations order upon
written notice to the Committee. Any such review by the Committee shall be
subject to the rules and procedures set forth in Article XXI hereof.

                22.9 STATUS OF ALTERNATE PAYEE. Any alternate payee who is
entitled to receive amounts from the Trust and Plan pursuant to a qualified
domestic relations order shall, with respect to the Trust and Plan, to the
extent of the alternate payee's interest in the Trust and Plan, have such rights
as are specified in the qualified domestic relations order.

                                   ALIENATION
                                      22-6


<PAGE>   176



                                  ARTICLE XXIII
                                  -------------

                              TOP-HEAVY PROVISIONS
                              --------------------

                23.1 RESTRICTIONS. During any plan year that this Trust and Plan
is top-heavy as determined in accordance with Section 23.2 hereof, the special
restrictions contained in Sections 23.3, 23.4, 23.5, 23.6 and 23.7 hereof shall
apply.

                23.2 DETERMINATION OF TOP-HEAVY STATUS. This Trust and Plan
shall be considered to be top-heavy in any plan year if, as of the determination
date for such plan year, all the aggregation groups of which this Trust and Plan
is a member are top-heavy groups. In the event that in any plan year this Trust
and Plan is a member of an aggregation group which is not a top-heavy group,
this Trust and Plan shall not be considered to be top-heavy for such plan year.

                Unless the context otherwise indicates, the following terms used
herein shall have the following meanings whenever used in this Article XXIII:

                (a)        "determination date" shall mean, for the first plan
                           year, the last day thereof, and thereafter shall
                           mean, for any other plan year, the last day of the
                           preceding plan year;

                (b)        "key employee" shall mean a "key employee" as
                           described in Section 416(i) of the Code which is
                           hereby incorporated by reference and which is
                           described for informational purposes herein as any
                           employee or former employee of a member of the
                           Controlled Group who at any time during the plan
                           year, or the four (4) preceding plan years is:

                           (i)    an officer of a member of the Controlled Group
                                  having Total Remuneration from the Controlled
                                  Group for the plan year of determination

                                    TOP-HEAVY
                                      23-1


<PAGE>   177



                        greater than Forty-Five Thousand Dollars ($45,000.00)
                        or, if greater, fifty percent (50%) of the amount
                        specified in Section 415(b)(1)(A) of the Code (plus any
                        increase for cost-of-living as determined from time to
                        time pursuant to regulations issued by the Secretary of
                        the Treasury or his delegate pursuant to Section 415(d)
                        of the Code);

                  (ii)  a one-half of one percent (.5%) actual or constructive
                        owner of a member of the Controlled Group who owns one
                        of the ten (10) largest interests in a member of the
                        Controlled Group and who is an employee of a member of
                        the Controlled Group having Total Remuneration from the
                        Controlled Group for the plan year of determination
                        greater than Thirty Thousand Dollars ($30,000.00) or, if
                        greater, the amount specified in Section 415(c)(1)(A) of
                        the Code (plus any increase for cost-of-living as
                        determined from time to time pursuant to regulations
                        issued by the Secretary of the Treasury or his delegate
                        pursuant to Section 415(d) of the Code);

                  (iii) a five percent (5%) actual or constructive owner of a
                        member of the Controlled Group; or

                  (iv)  a one percent (1%) actual or constructive owner of a
                        member of the Controlled Group having Total Remuneration
                        from the Controlled Group for the plan year of
                        determination greater than One Hundred Fifty Thousand
                        Dollars ($150,000.00);

                  provided that any such employee also performed service for a
                  member of the Controlled Group during the five (5) plan year
                  period ending on the determination date; and provided that an
                  amount held for the beneficiary of a key employee who is
                  deceased shall be deemed to be an amount held for a key
                  employee;

            (c)   "non-key employee" shall mean any employee of a member of the
                  Controlled Group who is not a key employee including any
                  employee who was formerly a key employee;

            (d)   "permissive aggregation group" shall mean the required
                  aggregation group plus each pension, profit sharing and stock
                  bonus plan of a member of the Controlled Group, including each
                  such plan

                                    TOP-HEAVY
                                      23-2


<PAGE>   178



                  terminated during the five (5) year period ending on the
                  determination date, which, when considered as a group with the
                  required aggregation group, would continue to comply with
                  Sections 401(a)(4) and 410 of the Code;

            (e)   "present value" shall be based only on the interest and
                  mortality rates set forth in Section (40)(b) of the Adoption
                  Agreement;

            (f)   "required aggregation group" shall mean each pension, profit
                  sharing and stock bonus plan of a member of the Controlled
                  Group, including each such plan terminated during the five (5)
                  year period ending on the determination date, in which a key
                  employee is a participant and each other pension, profit
                  sharing and stock bonus plan which enables such plans to meet
                  the requirements of Section 401(a)(4) or 410 of the Code; and

            (g)   "top heavy group" shall mean any aggregation group if the sum,
                  as of the determination date, of:

                  (i)   the present value of the cumulative accrued benefits for
                        key employees under all defined benefit plans included
                        in such group; and

                  (ii)  the aggregate of the account balances of key employees
                        under all defined contribution plans included in such
                        group;

                  exceeds sixty percent (60%) of a similar sum determined for
                  all participants, former participants and beneficiaries
                  permitted to be taken into account pursuant to Section 416(g)
                  of the Code, with such values being determined for each plan
                  as of the most recent valuation date occurring within the
                  twelve (12) month period ending on the determination date and
                  subject to appropriate adjustments under said Section 416(g)
                  and lawful regulations issued thereunder, including the
                  requirement that benefits and accounts of an employee be
                  increased by the aggregate distributions with respect to such
                  employee during the five (5) year period ending on the
                  determination date;

            (h)   "valuation date" means the date as of which account balances
                  or accrued benefits are valued for purposes of calculating the
                  top-heavy ratio, as selected in Section (40)(c) of the
                  Adoption Agreement.

                                    TOP-HEAVY
                                      23-3


<PAGE>   179



                In making any of the aforementioned determinations,
contributions due but unpaid as of the determination date shall be included in
determining the value of account balances, if any. In addition, the present
value of cumulative accrued benefits shall be determined as if they accrued no
more rapidly than the slowest rate of accrual permitted under the fractional
rule of Section 411(b)(1)(C) of the Code utilizing the actuarial factors and
assumptions set forth in Section (40)(b) of the Adoption Agreement. Furthermore,
for purposes of making the aforementioned calculations with respect to defined
benefit plans, proportional subsidies, and benefits not relating to retirement
benefits such as pre-retirement death and disability benefits and post
retirement medical benefits, are to be disregarded but nonproportional subsidies
are to be taken into account.

                23.3 TOP-HEAVY MINIMUM CONTRIBUTIONS. During any plan year that
this Trust and Plan is top-heavy, a Participating Company shall make a
contribution on behalf of each non-key employee employed by the Participating
Company who is a participant on the allocation date coinciding with the last day
of such year or was a participant whose employment terminated on or as of said
allocation date which is at least equal to the greater of (a) or (b) below,
where:

                (a)        equals the lesser of (i) or (ii) below, where:

                           (i)    equals three percent (3%) of the non-key
                                  employee's Total Remuneration from the
                                  Controlled Group during the plan year; and

                          (ii)     equals the largest percentage of Total Re-
                                   muneration from the Controlled Group (dis-

                                    TOP-HEAVY
                                      23-4


<PAGE>   180



                                    regarding any such Total Remuneration in
                                    excess of Two Hundred Thousand Dollars
                                    ($200,000.00) per plan year per key
                                    employee) provided to any key employee by
                                    the contributions of the Participating
                                    Companies; and

                (b)        equals such other percent of the non-key employee's
                           Total Remuneration from the Controlled Group as may
                           be necessary to satisfy the requirements of Section
                           401 and 416 of the Code as prescribed by the
                           Secretary of the Treasury in lawful regulations.

For purposes of determining the percentage set forth in subsection (a)(ii)
above, a Participating Company's contribution made pursuant to Sections 5.1 and
6.3 hereof for a key employee shall be taken into account, but a Participating
Company's contribution made pursuant to Sections 5.1 and 6.3 hereof on behalf of
a non-key employee shall not be taken into account in determining compliance
with this Section 23.3.

                If this Trust and Plan is top-heavy for a plan year and if a
participant who is a non-key employee is also a participant in any other defined
contribution plan or any defined benefit plan maintained by a Participating
Company, the top-heavy minimum benefit shall be provided pursuant to Section
(40)(a) of the Adoption Agreement.

                23.4 TOP-HEAVY VESTING. The Vested Percentage of a participant
who is employed during a plan year during which the Trust and Plan is top-heavy
shall be determined in accordance with the table specified in Section (21) of
the Adoption Agreement. Notwithstanding anything herein to the contrary, this
provision shall not apply to the account of any participant who does not work

                                    TOP-HEAVY
                                      23-5


<PAGE>   181



an hour of service for a member of the Controlled Group after the Trust and Plan
initially becomes top-heavy.

                23.5 VESTING UPON CESSATION OF TOP-HEAVY STATUS. Except as
provided in the next sentence, in the event that this Trust and Plan shall have
been top-heavy for one (1) or more plan years and shall thereafter cease to be
top-heavy, the Vested Percentage of each participant shall again be determined
pursuant to Section (20) of the Adoption Agreement; provided, however, that in
no event may a change in the Trust and Plan's top-heavy status cause the Vested
Percentage of any participant to be reduced. In the event that this Trust and
Plan shall have been top-heavy and shall thereafter cease to be top-heavy, each
participant who had completed three (3) or more years of vesting service on the
date this Trust and Plan ceased to be top-heavy shall continue to be covered by
the vesting schedule set forth in Section (21) of the Adoption Agreement.

                23.6 DETERMINATION OF SUPER TOP-HEAVY PLAN. This Trust and Plan
shall be considered to be super top-heavy in any plan year if, as of the
determination date for such plan year, all the aggregation groups of which this
Trust and Plan is a member are super top-heavy groups. The foregoing
determination shall be made as provided in Section 23.2 above for the
calculation of top-heavy status, except that for purposes of this Section 23.6,
subparagraph (g) of said Section 23.2 shall be modified by the substitution of
the words "super top-heavy group" for the words "top-heavy group" in said
subparagraph (g) and by the substitution of the percentage

                                    TOP-HEAVY
                                      23-6


<PAGE>   182



"ninety percent (90%)" for the percentage "sixty percent (60%)" in said
subparagraph (g).

                23.7 LIMITATIONS ON ANNUAL ADDITIONS UNDER TOP-HEAVY PLAN.
During any plan year that this Trust and Plan is top-heavy or super top-heavy,
the limitations on annual additions and annual benefits set forth in Article
XXIV hereof shall be modified by the substitution of the phrase "one hundred
percent (100%)" for the phrase "one hundred twenty-five percent (125%)" wherever
the latter phrase appears in Article XXIV and by the substitution of the amount
"Forty-One Thousand Five Hundred Dollars ($41,500)" for the amount "Fifty-One
Thousand Eight Hundred Seventy-Five Dollars ($51,875)" wherever the latter
amount appears in Article XXIV. Notwithstanding the previous sentence, the
modifications set forth in this Section 23.7 shall not apply for a plan year if
the Trust and Plan is top-heavy but not super top-heavy for such plan year and
if the amount contributed for each participant who is a non-key employee is
computed by substituting the percentage "4%" for "3%" in Section 23.3(a) above.
In the event that the annual additions or annual benefits of a key employee
shall be in excess of the limitations on annual additions or annual benefits as
described in Article XXIV hereof as modified herein, no contributions shall be
allocated to such participant's accounts under this Trust and Plan until he is
brought into compliance or this Trust and Plan ceases to be top-heavy or super
top-heavy, as the case may be.

                                    TOP-HEAVY
                                      23-7


<PAGE>   183



                                  ARTICLE XXIV
                                  ------------

                         LIMITATIONS ON ANNUAL ADDITIONS
                         -------------------------------

      24.1 DEFINITIONS. Unless the context otherwise indicates, the following
terms shall have the following meanings whenever used in this Article XXIV:

      (a)   The words "annual additions" shall mean with respect to each
            participant the sum of the following amounts in any plan year:

            (i)   the contributions of the Company or a Related Employer
                  credited to his accounts with respect to such plan year under
                  all defined contribution plans of the Company or any Related
                  Employer (whether or not terminated) which plans meet the
                  requirements of Section 401(a) of the Code, including, but not
                  limited to, other defined contribution regional prototype
                  plans;

            (ii)  forfeitures creditable to his accounts under all such defined
                  contribution plans of the Company or any Related Employer
                  (whether or not terminated) with respect to such plan year;

            (iii) an amount determined as follows:

                  (A)   for each limitation year beginning prior to January 1,
                        1976, such amount shall be equal to (1) minus (2),
                        where:

                        (1)   equals such participant's contributions with
                              respect to such limitation year to any plan of the
                              Company or any Related Employer (whether or not
                              terminated), which plan met the requirements of
                              Section 401(a) of the Code; and

                        (2)   equals ten percent (10%) of the aggregate of the
                              participant's Total Remuneration from the Company
                              and all Related Employers with respect to such
                              limitation year and all prior limitation years
                              during which

                                   LIMITATIONS
                                      24-1


<PAGE>   184



                        he was a participant in any such plan minus the
                        aggregate contributions made by him in all such prior
                        limitation years; or

                  (B)   for each limitation year beginning after December 31,
                        1975 but before December 31, 1986, such amount shall be
                        equal to the lesser of:

                        (1)   the amount, if any, by which his own contributions
                              (excluding deductible voluntary contributions and
                              rollover contributions, if any) with respect to
                              any such limitation year under all plans of the
                              Company and any Related Employer (whether or not
                              terminated), which plans meet the requirements of
                              Section 401(a) of the Code, shall exceed six
                              percent (6%) of his Total Remuneration from the
                              Company and all Related Employers with respect to
                              such limitation year; or

                        (2)   one-half (1/2) of such participant's contributions
                              (excluding deductible voluntary contributions and
                              rollover contributions, if any) with respect to
                              such limitation year under all plans of the
                              Company and all Related Employers (whether or not
                              terminated), which plans meet the requirements of
                              Section 401(a) of the Code; or

                  (C)   for each limitation year beginning after December 31,
                        1986, such amount shall be equal to such participant's
                        contributions (excluding deductible voluntary
                        contributions and rollover contributions, if any) with
                        respect to such limitation year under all plans of the
                        Company and all Related Employers (whether or not
                        terminated), which plans meet the requirements of
                        Section 401(a) of the Code; and

            (iv)  unless the provisions of this Section 24.1(a)(iv) cease to be
                  required by the Code, amounts allocated, in plan years
                  beginning after March 31, 1984, to an individual medical

                                   LIMITATIONS
                                      24-2


<PAGE>   185



                  account, as defined in Section 415(1)(2) of the Code, which is
                  part of a pension or annuity plan maintained by the Company or
                  any Related Employer and amounts derived from contributions
                  paid or accrued after December 31, 1985, in plan years ending
                  after such date, which are attributable to the separate
                  account of a key employee, as defined in Section 419A(d)(3) of
                  the Code, under a welfare benefit fund, as defined in Section
                  419(e) of the Code, maintained by the Company or any Related
                  Employer.

      (b)   The words "defined benefit plan fraction" shall mean, for any
            participant with respect to any limitation year, a fraction:

            (i)   the numerator of which is the sum of his Projected Annual
                  Benefit under all defined benefit pension plans of the Company
                  and all Related Employers (whether or not terminated), which
                  plans meet the requirements of Section 401(a) of the Code; and

            (ii)  the denominator of which shall equal the greater of (A) and
                  (B) where:

                  (A)   equals (1) multiplied by (2) below, where:

                        (1)   equals the lesser of (I) or (II), where:

                              (I)   equals, except as otherwise provided in
                                    Section 23.7 hereof, one hundred twenty-five
                                    percent (125%) of the quantity Ninety
                                    Thousand Dollars ($90,000) plus any increase
                                    for cost-of-living as determined from time
                                    to time pursuant to regulations issued by
                                    the Secretary of the Treasury or his
                                    delegate pursuant to Sections 415(b) and
                                    415(d) of the Code; and

                             (II)   equals one hundred forty percent (140%) of
                                    one-third (1/3) of the participant's Total
                                    Remuneration from the Company and all
                                    Related

                                   LIMITATIONS
                                      24-3


<PAGE>   186



                                    Employers during the three (3) consecutive
                                    limitation years during which such total is
                                    highest, assuming in the case of a
                                    participant who is an employee of the
                                    Company or a Related Employer that he
                                    continues to earn remuneration until his
                                    normal retirement date in the same amount as
                                    during such limitation year; and

                           (2)      equals a fraction, the numerator of which
                                    shall be the years of vesting service (or
                                    parts thereof) he shall have on his normal
                                    retirement date, up to but not in excess of
                                    ten (10) years, and the denominator of which
                                    shall equal ten (10); and

                  (B)      equals, except as otherwise provided in Section 23.7
                           hereof, one hundred twenty-five percent (125%) of
                           the participant's accrued annual benefit under all
                           defined benefit pension plans of the Company and all
                           Related Employers which were in existence on May 6,
                           1986 (whether or not terminated) calculated at the
                           end of the last limitation year beginning prior to
                           January 1, 1987 in accordance with the terms and
                           provisions of such plans as in effect on May 5, 1986.

         (c)      The words "defined contribution plan fraction" shall mean for
                  any participant with respect to any limitation year a
                  fraction:

                  (i)      except as otherwise provided in Section 24.1(c)(iv)
                           hereof, the numerator of which shall be equal to the
                           sum of:

                           (A)      the sum of the least of the following
                                    amounts for each limitation year which began
                                    prior to January 1, 1976:

                                    (1)      his annual additions for such
                                             limitation year;

                                    (2)      twenty-five percent (25%) of his
                                             Total Remuneration from the Company

                                   LIMITATIONS
                                      24-4


<PAGE>   187



                                             and all Related Employers for such
                                             limitation year; or

                                    (3)      Twenty-Five Thousand Dollars
                                             ($25,000); plus

                           (B)      the sum of its annual additions in each
                                    limitation year beginning after December 31,
                                    1975; and

                  (ii)     except as otherwise provided in Section 24.1(c)(iv)
                           hereof, the denominator of which shall equal the sum
                           of the following amounts for each limitation year
                           that the participant was an employee of the Company
                           and any Related Employer (regardless of whether a
                           defined contribution plan was maintained by the
                           Company and any Related Employer):

                           (A)      for limitation years which began prior to
                                    January 1, 1976, the lesser of:

                                    (1)      one hundred twenty-five percent
                                             (125%) of Twenty-Five Thousand
                                             Dollars ($25,000); or

                                    (2)      thirty-five percent (35%) of the
                                             participant's Total Remuneration
                                             from the Company and all Related
                                             Employers for such limitation year;

                           (B)      except as otherwise provided in Section 23.7
                                    hereof, for limitation years which began on
                                    or after January 1, 1976 and prior to
                                    January 1, 1983, the lesser of:

                                    (1)      one hundred twenty-five percent
                                             (125%) of Twenty-Five Thousand
                                             Dollars ($25,000) plus any increase
                                             for cost-of-living as determined
                                             from time to time pursuant to
                                             regulations issued by the Secretary
                                             of the Treasury or his delegate
                                             pursuant to Section 415(d) of the
                                             Code; or

                                    (2)      thirty-five percent (35%) of the
                                             participant's Total Remuneration
                                             from the Company and all Related
                                             Employers for such limitation year;
                                             and

                                   LIMITATIONS
                                      24-5


<PAGE>   188



                           (C)      except as otherwise provided in Section 23.7
                                    hereof, for limitation years which begin on
                                    or after January 1, 1983, the lesser of:

                                    (1)      one hundred twenty-five percent
                                             (125%) of Thirty Thousand Dollars
                                             ($30,000) plus any increase for
                                             cost-of-living as determined from
                                             time to time pursuant to
                                             regulations issued by the Secretary
                                             of the Treasury or his delegate
                                             pursuant to Section 415(d) of the
                                             Code; or

                                    (2)      thirty-five percent (35%) of the
                                             participant's Total Remuneration
                                             from the Company and all Related
                                             Employers for such limitation year;

                  (iii)    if the sum of the defined benefit plan fraction and
                           the defined contribution plan fraction, computed as
                           provided herein but as of the last day of the last
                           limitation year beginning before January 1, 1983,
                           exceeds one (1.0), then the numerator of the defined
                           contribution plan fraction shall be reduced, but not
                           below zero (0), so that such sum does not exceed one
                           (1.0). A like reduction also will be made as of the
                           1st day of the last limitation year beginning before
                           January 1, 1984 if, as of such date, the sum of the
                           defined benefit fraction and the defined contribution
                           fraction, computed as provided herein but as of such
                           day, exceeds one (1.0). Such reductions shall be made
                           in accordance with lawful regulations prescribed by
                           the Secretary of the Treasury or his delegate as
                           mandated by Section 235(g)(3) of the Tax Equity and
                           Fiscal Responsibility Act of 1982;

                  (iv)     if an employee was a participant in the Trust and
                           Plan as of the end of the first day of the first
                           limitation year beginning after December 31, 1986, in
                           one or more defined contribution plans maintained by
                           a Participating Company which were in existence on
                           May 6, 1986, and the sum of the defined benefit plan
                           fraction and the defined contribution plan fraction,
                           computed as provided herein but as of the last day of
                           the last limitation year beginning before January 1,
                           1987 (and disregarding any changes

                                   LIMITATIONS
                                      24-6


<PAGE>   189



                           in the terms and conditions of the Trust and Plan
                           made after May 5, 1986), exceeds one (1.0), then the
                           numerator of the defined contribution plan fraction
                           shall be reduced, but not below zero (0), so that
                           such sum does not exceed one (1.0); and

                  (v)      if the Company so elects, with respect to any
                           limitation year ending after December 31, 1982, the
                           denominator of the defined contribution plan fraction
                           for each participant for all limitation years ending
                           before January 1, 1983 shall equal the product of (A)
                           multiplied by (B), where:

                           (A)      equals the sum of the lesser of the
                                    following amounts for each limitation year
                                    that the participant was an employee of the
                                    Company or any Related Employer through the
                                    limitation year ending in 1982:

                                    (1)      twenty-five percent (25%) of the
                                             Total Remuneration he received from
                                             the Company and all Related
                                             Employers for such limitation year;
                                             or

                                    (2)      Twenty-Five Thousand Dollars
                                             ($25,000) plus any increase for
                                             cost-of-living as determined from
                                             time to time pursuant to
                                             regulations issued by the Secretary
                                             of the Treasury or his delegate
                                             pursuant to Section 415(d) of the
                                             Code; and

                           (B)      except as otherwise provided in Section 23.7
                                    hereof, equals a fraction,

                                    (1)      the numerator of which is the
                                             lesser of:

                                             (I) Fifty-One Thousand Eight
                                                 Hundred Seventy-Five Dollars
                                                 ($51,875); or

                                             (II) thirty-five percent (35%) of
                                                  the Total Remuneration of the
                                                  Participant for the limitation
                                                  year ended in 1981; and

                                   LIMITATIONS
                                      24-7


<PAGE>   190



                                    (2)      the denominator of which is the
                                             lesser of:

                                              (I)    Forty-One Thousand Five
                                                     Hundred Dollars ($41,500);
                                                     or

                                             (II)    twenty-five percent (25%)
                                                     of the Total Remuneration
                                                     of the participant for
                                                     such limitation year.

                (d)        The words "limitation year" shall have the same
                           meaning as that set forth in Section (11) of the
                           Adoption Agreement.

                (e)        The words "Projected Annual Benefit" shall mean,
                           with respect to each participant or former
                           participant, the annual amount which would be
                           payable to him under all defined benefit pension
                           plans of the Company and all Related Employers
                           (excluding amounts attributable to deductible
                           voluntary contributions and rollover contributions,
                           if any) if he were to continue to be employed until
                           his normal retirement date in the position, if any,
                           he held and at the rate of compensation, if any, he
                           was receiving on the last day of the limitation
                           year with respect to which such participant's
                           "Projected Annual Benefit" is being computed and if
                           he were to receive his pension as follows:

                           (i)      if the participant is not married, on a life
                                    annuity basis; or

                           (ii)     if the participant is married, on a 100%
                                    joint and survivor basis with his spouse.

                24.2 LIMITATION ON BENEFITS. In any event, the maximum amount of
Participating Company contributions, pre-tax contributions and after tax
contributions which can be credited annually to the account or accounts of any
participant for any limitation year beginning on or after January 1, 1987 shall
be such amount which limits his annual additions for such year under this Trust
and Plan to an amount which, when combined with his annual additions, if any,
under all other pension, profit sharing and stock bonus plans

                                   LIMITATIONS
                                      24-8


<PAGE>   191



of the Company or any Related Employer which meet the requirements of Section
401(a) of the Internal Revenue Code, shall not exceed the least of the following
amounts:

                (a)        Twenty-five percent (25%) of the participant's
                           Total Remuneration from the Company and all Related
                           Employers during such plan year;

                (b)        Thirty Thousand Dollars ($30,000) or, if greater,
                           twenty-five percent (25%) of the dollar limitation in
                           effect under Section 415(b)(1)(A) of the Code (plus
                           any increase for cost-of-living as determined from
                           time to time by the Secretary of Treasury of his
                           delegate); or

                (c)        The amount which will cause the sum of the
                           participant's defined benefit plan fraction and
                           defined contribution plan fraction to equal one
                           (1.0).

                24.3 REDUCTION OF EXCESS BENEFITS. In the event a participant
who has excess annual additions is also a participant under another qualified
plan sponsored by a member of the Controlled Group, adjustment under Section 415
of the Code shall be made in the order set forth in Section (41) of the Adoption
Agreement.

                24.4 SUSPENSE ACCOUNT. In the event that, after the application
of any other provisions of this Trust and Plan, there still remain Participating
Company contributions made pursuant to Articles V and VI hereof which, if
allocated to a participant, would be in excess of the limits on annual additions
set forth in Section 24.2 hereof and which arise as a result of the allocation
of forfeitures, a reasonable error in estimating a participant's compensation or
other limited facts and circumstances which the Commissioner of Internal Revenue
finds justify the availability of

                                   LIMITATIONS
                                      24-9


<PAGE>   192



the rules set forth in this Section 24.4, such excess amounts shall be used in
the next plan year and any succeeding plan years, as necessary, to reduce
Participating Company contributions which would otherwise be made for such
participant in such plan year or years. In the event such a participant
terminates employment at a time when excess amounts still remain on his behalf,
such excess amounts shall be used to reduce the Participating Company
contributions of all participants who are then eligible.

                Until any excess amounts described above are used to reduce
Participating Company contributions, they shall be held in a suspense account.
Such suspense account shall not be subject to the periodic valuation procedure
described in Article XI hereof and will in no event be adjusted to take account
of the income and/or gains or losses of the investment funds of the Trust Fund.
Notwithstanding any other provisions of this Trust and Plan to the contrary (and
specifically Section 28.6 hereof), in the event this Trust and Plan is
terminated at a time when there are amounts credited to a suspense account
pursuant to this Section 24.4, such amounts shall be returned to the
contributing Participating Company. In the event that amounts representing
pre-tax contributions are returned to a Participating Company hereunder, the
Participating Company shall make payments to the participants on whose behalf
such contributions were made equal to the total of said refunded amounts.

                                   LIMITATIONS
                                      24-10


<PAGE>   193



                                   ARTICLE XXV
                                   -----------

                     ROLLOVERS AND TRANSFERS INVOLVING OTHER
                     ---------------------------------------

                           QUALIFIED RETIREMENT PLANS
                           --------------------------

         25.1 ROLLOVERS AND TRANSFERS FROM OTHER TAX QUALIFIED PLANS. If the
Company so elects, pursuant to Section (36) of the Adoption Agreement, and in
the event that:

         (a)      any employee of a Participating Company shall have been, prior
                  to his becoming an employee of a Participating Company, a
                  participant under another qualified retirement plan which met
                  the requirements of Section 401(a) of the Code; and

         (b)      either:

                  (i)      the custodian or trustee of the assets held pursuant
                           to said plan on behalf of said employee; or

                  (ii)     the custodian or trustee of the assets of an
                           individual retirement account established pursuant to
                           Section 408 of the Code to hold the assets
                           distributed to said employee from said plan; or

                  (iii)    the employee who holds assets distributed to him
                           during the preceding sixty (60) days from such plan
                           or from an individual retirement account described in
                           paragraph (i) above;

                  shall agree to transfer said assets to the Trustee hereunder;
                  and

         (c)      the assets to be so transferred shall not be made available to
                  said employee in the course of the transfer except to the
                  extent permitted by paragraph (b)(iii) above; and

         (d)      the Administrator consents to the transfer; the Trustee
                  hereunder shall accept such transferred assets and hold and
                  administer them pursuant to the terms and provisions of this
                  Trust and Plan and this Article XXV. Upon the receipt of said

                               ROLLOVERS/TRANSFERS
                                      25-1


<PAGE>   194



assets, the Trustee shall credit such amount to a rollover account established
for the employee on whose behalf the assets were so transferred.

                25.2 TRANSFER TO ANOTHER QUALIFIED RETIREMENT PLAN. In the event
that:

                (a)        any participant hereunder shall terminate his
                           employment and subsequently become a participant
                           under the qualified retirement plan of another
                           employer, which plan satisfies the requirements of
                           Section 401 of the Code;

                (b)        said former participant shall have amounts credited
                           to an account held for him hereunder which have not
                           been distributed to the former participant and which
                           are distributable to the former participant;

                (c)        either:

                             (i)    the custodian or trustee of the assets of
                                    such other plan shall apply to the Trustee
                                    hereunder for transfer to it of assets held
                                    pursuant to this Trust and Plan representing
                                    said former participant's accounts; or

                            (ii)    such other plan shall provide for the
                                    receipt of assets transferred to it from
                                    other qualified retirement plans;

                (d)        the assets to be transferred shall not be made
                           available to said participant in the course of the
                           transfer except to the extent permitted by Section
                           402(a)(5) of the Code; and

                (e)        the Administrator shall consent to such transfer;
the Trustee hereunder agrees to transfer to the applying trustee an amount equal
to the participant's vested interest plus the balance in his personal accounts
on the date of transfer. Said transfer shall not be made until the Administrator
is assured to its full satisfaction that the participant's interest to be
transferred shall be fully vested and nonforfeitable under the terms of such

                               ROLLOVERS/TRANSFERS
                                      25-2


<PAGE>   195



other plan, and that said interest shall neither be alienable, nor otherwise
subject to disposition or encumbrance by the participant.

                               ROLLOVERS/TRANSFERS
                                      25-3

<PAGE>   196



                                  ARTICLE XXVI
                                  ------------

                             PARTICIPATING COMPANIES
                             -----------------------

                26.1 IDENTITY OF PARTICIPATING COMPANIES. The Company shall
specify the Participating Companies in Section (6) of the Adoption Agreement.
Thereafter, in accordance with Section (6) of the Adoption Agreement, a member
of the Controlled Group shall either automatically or with the approval of the
Board of the Company and the action of the Board of the member of the Controlled
Group (both of which actions may be ratification of prior actions of the Company
and Participating Company) become a Participating Company. Each such
Participating Company shall sign a document agreeing to be bound by the terms
and provisions of this Trust and Plan. In such latter event, such Participating
Company and its Adoption Date shall be added to the Adoption Agreement.
Participating Companies which are specified in Section (6) of the Adoption
Agreement and which cease to be Participating Companies shall also have their
cessation dates set forth.

                26.2 AUTHORITY OF COMPANY. The Company is hereby fully empowered
to act on behalf of itself and the other Participating Companies as it may deem
appropriate in maintaining the Trust and Plan. Without limiting the generality
of the foregoing, such actions include obtaining and retaining tax qualified
status for such Trust and Plan and appointing attorneys-in-fact in pursuit
thereof. Furthermore, the adoption by the Company of any amendment to the Trust
and Plan or the termination thereof, will constitute

                             PARTICIPATING COMPANIES
                                      26-1


<PAGE>   197



and represent, without any further action on the part of any Participating
Company, the approval, adoption, ratification or confirmation by each
Participating Company of any such amendment or termination. In addition, the
appointment of or removal by the Company of any member of the Retirement Savings
Committee, any Administrator, Trustee, Investment Manager or other person under
the Trust and Plan shall constitute and represent, without any further action on
the part of any Participating Company, the appointment or removal by each
Participating Company of such person.

                             PARTICIPATING COMPANIES
                                      26-2


<PAGE>   198
                                 AMENDMENT NO. 1

                                       TO

                               ADOPTION AGREEMENT

                                       FOR

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

         This Amendment No. 1 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

         WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan (hereinafter called the "Trust and Plan"), effective June 1, 1992, by
completing and executing an Adoption Agreement ("hereinafter called the Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

         WHEREAS, the Company reserved the right to amend the Trust and Plan and
the Adoption Agreement pursuant to Section 27.1 of the Trust and Plan; and

         WHEREAS, the Company desires to amend the Adoption Agreement in order
to provide that participants who, on May 31, 1993, have amounts transferred to
the Trust and Plan from their Transfer Accounts under the RPM, Inc. Retirement
Plan (hereinafter called the "Retirement Plan") shall receive distribution of
the amounts credited to their accounts in accordance with Section 401(a)(11) of
the Code and to adopt certain other special provisions not available under the
Adoption Agreement;

         NOW, THEREFORE, pursuant to Section 27.1 of the Plan, the Company
hereby amends the Adoption Agreement, effective May 31, 1993, as follows:


<PAGE>   199

         1. Section (28) of the Adoption Agreement is hereby amended to read as
follows:

        (28)   FORMS OF BENEFIT. Distributions upon termination of employment,
retirement, disability and death will be made in accordance with:


                [X]     Article XVIII of the Trust and Plan (Non-Annuity Forms)
                        with respect to participants who did not have Transfer
                        Accounts under the Retirement Plan transferred to the
                        Trust and Plan on May 31, 1993

                [X]     Article XVIII-A of the Trust and Plan (Normal Form -
                        Annuity) with respect to participants who did have
                        Transfer Accounts under the Retirement Plan transferred
                        to the Trust and Plan on May 31, 1993

                [ ]     Article XVIII-A of the Trust and Plan (Normal Form -
                        Lump Sum unless Annuity Form elected)

        (a) NON-ANNUITY FORMS OF BENEFIT. Distributions made in accordance with
Article XVIII or XVIII-A of the Trust and Plan in a non-annuity form will be
permitted in the following form(s):

                [X]     lump sum form

                [ ]     installment payments over a period of years (not to
                        exceed _____ years)

                [ ]     installment payments over the maximum permissible years
                        under Section 401(a)(9) of the Code

        (b)   ANNUITY FORMS OF BENEFIT. Distributions made in accordance with
Article XVIII-A of the Trust and Plan in an annuity form will be permitted in
the following form(s):

                [X]     life annuity form

                [X]     spouse's annuity form

                [X]     joint and survivor form

                [X]     life-period certain form over a 5, 10 OR 15-year period

                [X]     full cash refund life annuity form



                                       2
<PAGE>   200

                [X]     lump sum form

                [ ]     installment payments over a period of years (not to
                        exceed ____ years)

        (c)     N/A     TIMING OF INSTALLMENT PAYMENTS. Installment payments, if
permitted pursuant to (a) or (b) above, will be made on the following basis:


                [ ]     monthly

                [ ]     quarterly

                [ ]     semi-annually

                [ ]     annually

        2. Notwithstanding anything contained in the Adoption Agreement or the
Trust and Plan to the contrary, the lump sum amounts transferred to the Trust
and Plan from participants' Transfer Accounts under the Retirement Plan are
permitted to be transferred to the Trust and Plan under the same terms and
conditions as permitted under Article XXV of the Trust and Plan.

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 1 to be executed this 25th day of May, 1993.

                                     RPM, INC.

                                                    (the "Company")


                                     By:  /s/ Richard E. Klar
                                        ----------------------------------------

                                     And: /s/ Paul A. Granzier
                                         ---------------------------------------






                                       3
<PAGE>   201



                                 AMENDMENT NO. 2

                                       TO

                               ADOPTION AGREEMENT

                                       FOR

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

        This Amendment No. 2 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                  WITNESSETH:
                                  -----------

        WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan (hereinafter called the "Trust and Plan"), effective June 1, 1992, by
completing and executing an Adoption Agreement ("hereinafter called the Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company reserved the right to amend the Trust and Plan and
the Adoption Agreement pursuant to Section 27.1 of the Trust and Plan; and

        WHEREAS, the Company desires to amend the Adoption Agreement in order to
modify the eligibility requirements contained therein and to conform the
definition of compensation with administrative practice; and

        NOW, THEREFORE, pursuant to Section 27.1 of the Plan, the Company hereby
amends the Adoption Agreement, effective as hereinafter provided, as follows:

        1. Effective September 1, 1993, Sections (13), (14) and (15) of the
Adoption Agreement are hereby amended to read as follows:

        (13) SERVICE. An employee's service, as defined in Article III of the
Trust and Plan, will be determined as follows:




<PAGE>   202

        (a) ELIGIBILITY. An employee's eligibility to participate in the Trust
and Plan is calculated pursuant to the following method:

                [X]     hours method, with respect to part-time employees

                [X]     elapsed time method, with respect to full-time employees

        (b) N/A VESTING. An employee's vesting service under the Trust and Plan
is calculated pursuant to the following method:

                Years Ending Before ____________ (Adoption Date or other date)

                [ ]     elapsed time method

                [ ]     hours method

                Years Ending After ______________ (Adoption Date or other date)

                [ ]     elapsed time method

                [ ]     hours method

        (c) N/A CREDITING OF SERVICE BASED ON HOURS WORKED. The following
equivalency will be used to determine service to be credited to participants
based on working time method:

                [ ]     1 hour for each hour of service as described in Section
                        3.2(a) of the Trust and Plan

                [ ]     1.15 hours for each hour of service as defined in
                        Section 3.2(a) actually worked by employee

                [ ]     1.33 hours for each hour of service as defined in
                        Section 3.2(a) which was a regular time hour actually
                        worked by the employee

                [ ]     10 hours for each day employee has at least 1 hour of
                        service as defined in Section 3.2 of the Trust and Plan

                [ ]     45 hours for each week employee has at least 1 hour of
                        service as defined in Section 3.2(a) of the Trust and
                        Plan

                [ ]     95 hours for each semi-monthly payroll period during
                        which employee has at least 1 hour of service as defined
                        in Section 3.2(a) of the Trust and Plan

                [ ]     190 hours for each month employee has at least 1 hour of
                        service as defined in Section 3.2(a) of the Trust and
                        Plan


<PAGE>   203

        (14) PARTICIPATION REQUIREMENTS. To become a participant, a Covered
Employee must satisfy the following requirements:

        (a) SERVICE REQUIREMENT. To become eligible to participate in the Trust
and Plan, a Covered Employee:

                [ ]     need not complete any waiting period

                [ ]     must complete _______ years(s) of service (may not
                        exceed 21)

                [ ]     must complete _______ consecutive month(s) of service
                        without regard to the number of hours of service
                        completed (may not exceed 24*)

        (b) SPECIAL 401(k) SERVICE REQUIREMENT. To become eligible to make
401(k) contributions under the Trust and Plan, a Covered Employee:

                [ ]     need not complete any waiting period

                [X]     must complete 1 year of service, if a part-time employee

                [X]     must complete 6 consecutive month(s) of service (without
                        regard to the number of hours of service completed), if
                        a full-time employee

        (c) AGE REQUIREMENT. To become eligible to participate in the Trust and
Plan a Covered Employee:

                [ ]     need not attain any minimum age

                [X]     must be at least 21 years of age (not more than 21)

        (15) ENTRY DATE. An eligible Covered Employee commences participation in
the Trust and Plan on:

                [X]     1st day of the month payroll period

                [ ]     1st day of the plan year

                [X]     earlier of the JUNE 1 or DECEMBER 1 (first day of the
                        first month or first day of the seventh month), if he is
                        a part-time employee

                [ ]     1st day of each calendar quarter


- --------
1 A 2-year or 24-month service requirement may be elected only in the event that
the Trust and Plan provides for full and immediate vesting.





                                       3
<PAGE>   204


coinciding with or next following the date such Covered Employee meets the
eligibility requirements.

        2. Effective September 1, 1993, for purposes of Sections (13) and (14)
above, the terms "full-time employee" and "part-time employee" shall have the
following meanings:

                (a)     The term "full-time employee" shall mean any employee of
                        a Participating Company or an Affiliate whose customary
                        employment is at a rate of one thousand (1,000) or more
                        hours in any plan year.

                (b)     The term "part-time employee" shall mean any employee of
                        a Participating Company or an Affiliate whose customary
                        employment is at a rate of fewer than one thousand
                        (1,000) hours in any plan year.

        3. Effective June 1, 1992, Section (16) of the Adoption Agreement is
hereby amended to read as follows:

        (16) COMPENSATION.

        (a) BASIC DEFINITION. A participant's compensation shall be determined
on the basis of the following:

                [ ]     Section 415 compensation as described in Section
                        2.11(a)(i) of the Trust and Plan

                [ ]     Modified Section 415 compensation as described in
                        Section 2.11(a)(ii) of the Trust and Plan

                [ ]     Modified Section 3121 compensation as described in
                        Section 2.11(a)(iii) of the Trust and Plan

                [ ]     Modified Section 3401 compensation as described in
                        Section 2.11(a)(iv) of the Trust and Plan

                [X]     W-2 earnings as described in Section 2.11(a)(v) of the
                        Trust and Plan for all plan years

                [ ]     W-2 earnings as described in Section 2.11(a)(v) of the
                        Trust and Plan for plan years commencing prior to May
                        10, 1990 and the definition selected above for all
                        subsequent plan years

        (b) Safe Harbor Adjustments To Compensation



                                       4
<PAGE>   205

                [X]     Compensation shall be increased for salary reduction
                        amounts under 401(k), 125, 403(b) and similar plans as
                        described in Section 2.11(b)(i) of the Trust and Plan

                [X]     Compensation shall be reduced by any extra benefits as
                        described in Section 2.11(b)(ii) of the Trust and Plan

        (c) Other Exclusions From Compensation(2)

                [ ]     pre-entry date compensation

                [ ]     commissions

                [ ]     bonuses (whether discretionary or non-discretionary)

                [ ]     commissions, overtime and bonuses (whether discretionary
                        or non-discretionary)

                [ ]     other ____________________

                [X]     none of the above

        4. Effective June 1, 1992, Section 27.1 of the Plan document is hereby
amended by the deletion of said Section 27.1 and the substitution in lieu
thereof of a new Section 27.1 to read as follows:

        27.1 This Trust and Plan may be modified, altered, amended, changed or
terminated by the Company by action of its Board of Directors and/or by writing
executed by the Company by its proper officer or officers, but no rights of
participants, former participants or beneficiaries receiving benefits under this
Trust and Plan and no other vested rights under this Trust and Plan shall in any
way be modified except that such rights may be modified if such a modification
is necessary to establish or to continue the qualified status of this Trust and
Plan under the terms of Section 401 of the Code or its successor section or
sections. Any such amendment shall be made with respect to all Participating
Companies at any time or from time to time without the




- ----------------------------
(2) No exclusions from compensation (other than pre-entry date compensation) may
be elected if Participating



                                       5
<PAGE>   206




consent of any Participating Company. This Trust and Plan may be modified and
amended retroactively, if necessary, to secure exemption effective on June 1,
1992 under Section 401 of the Code. No amendment shall be binding on the Trustee
until the receipt of such amendment by the Trustee."

        5. Effective June 1, 1993, attachments A, B and C to the Adoption
Agreement are hereby amended as attached hereto.

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 2 to be executed this 27th day of July, 1995.

                                     RPM, INC.

                                                  (the "Company")


                                     By: /s/ Thomas C. Sullivan
                                        ---------------------------------------

                                     And: /s/ Paul A. Granzier
                                         --------------------------------------





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

Company contributions are allocated in accordance with the integration method
described in Section (18)(a).




                                       6
<PAGE>   207



                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

                      ATTACHMENT A TO ADOPTION AGREEMENT
                      ----------------------------------

                                CONTROLLED GROUP
                                ----------------

                          AGR Company
                          Alox Corporation
                          Alox International Sales Corporation
                          American Emulsions Co., Inc.
                          American Protective Coatings Corporation
                          Bondex International, Inc.
                          Bondo Canada Limited
                          Bondo International (Canada) Ltd.
                          Bradshaw Praeger & Co.
                          Briner Paint Mfg. Co.
                          BSP Systems, Inc.
                          Carboline Company
                          Carboline Dubai Corporation
                          Carboline International Corporation
                          Carboline World Wide Corp.
                          Carboline/Ferro Powder Coatings Company
                          Carboline Marine, Ltd.
                          Chemical Specialties Manufacturing Corporation
                          Chemical Coatings, Inc.
                          Consolidated Coatings Corporation




                                       7
<PAGE>   208

                          Consolidated Intercontinental Corporation
                          Consolidated Protection Coatings Limited
                          Craft House Corporation
                          Day-Glo Color Corp.
                          Design/Craft Fabric Corporation
                          Design/Craft West, Inc.
                          Dynatron/Bondo Corporation
                          Euchem, Inc.
                          First Colonial Insurance Company
                          Floquil-Polly S Color Corporation
                          Fopeco, Inc.
                          H. Behlen & Bro., Inc.
                          Haartz-Mason, Inc.
                          Kop-Coat, Inc.
                          L.D. Wracm, Inc.
                          Label Systems Corporation
                          Lubraspin Corporation
                          Mameco International, Inc.
                          Mantrose-Haeuser Co., Inc.
                          Map II, Inc.
                          Martin Mathys N.V.
                          Monile France S.A.
                          Mohawk Finishing Products, Inc.
                          Paramount Technical Products, Inc.



                                       8
<PAGE>   209

                          PCI Industries, Inc.
                          Radiant Color N.V.
                          Republic Powdered Metals, Inc.
                          Richard E. Thibaut, Inc.
                          RPM/Belgium N.V.
                          RPM/Europe B.V.
                          RPM Finance N.V.
                          RPM/France S.A.
                          RPM, Inc.
                          RPM/Luxembourg S.A.
                          RPM/Netherlands B.V.
                          RPM of Illinois, Inc.
                          RPM of Mass., Inc.
                          RPM of North Carolina, Inc.
                          RPM World Trade, Inc.
                          RPM World Travel, Inc.
                          RPOW (France) S.A.
                          Select Dye & Chemical, Inc.
                          Sentry Polymers, Inc.
                          Stonhard, Inc.
                          Stonhard Canada Ltd.
                          Stonhard Europe
                          Stonard Latin America



                                       9
<PAGE>   210

                          Talsol Corporation
                          The Testor Corporation
                          Testor Australia Pty, Ltd.
                          Westfield Coatings Corporation
                          Westgate Advertising, Inc.
                          William Zinnser & Co., Incorporated
                          Wisconsin Protective Coatings Corp.














                                       10
<PAGE>   211



                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

                       ATTACHMENT B TO ADOPTION AGREEMENT
                       ----------------------------------

                             PARTICIPATING COMPANIES
                             -----------------------
<TABLE>
<CAPTION>
         Name                                                     Adoption Date               Cessation Date
         ----                                                     -------------               --------------

<S>                                                                <C>                        <C>
AGR Company                                                        June 1, 1992
Alox Corporation                                                   June 1, 1992
American Emulsions Co., Inc.                                       June 1, 1992
Bondex International, Inc.                                         June 1, 1992
Bradshaw Praeger & Co.                                             June 1, 1992
Briner Paint Mfg. Co., Inc.                                        June 1, 1992
Carboline Company                                                  June 1, 1992
Chemical Specialties Manufacturing Corporation                     June 1, 1992
Chemical Coatings, Inc.                                            June 1, 1992
Consolidated Coatings Corporation                                  June 1, 1992
Craft House Corporation                                            June 1, 1992
Day-Glo Color Corp.                                                June 1, 1992
Design/Craft Fabric Corporation                                    June 1, 1992
Floquil-Polly S Color Corp.                                        June 1, 1992
Haartz-Mason, Inc.                                                 June 1, 1992
Mameco International, Inc.                                         June 1, 1992
Mohawk Finishing Products, Inc.                                    June 1, 1992
Paramount Technical Products, Inc.                                 June 1, 1992
</TABLE>




                                       11
<PAGE>   212

<TABLE>
<S>                                                                <C>
PCI Industries, Inc.                                               June 1, 1992
Republic Powdered Metals, Inc.                                     June 1, 1992
Richard E. Thibaut, Inc.                                           June 1, 1992
RPM, Inc.                                                          June 1, 1992
RPM World Travel, Inc.                                             June 1, 1992
Talsol Corporation                                                 June 1, 1992
The Testor Corporation                                             June 1, 1992
Westfield Coatings Corporation                                     June 1, 1992
William Zinnser & Co., Inc.                                        June 1, 1992
Wisconsin Protective Coatings Corp.                                June 1, 1992
Sentry Polymers, Inc.                                            September 1, 1992
Kop-Coat, Inc.                                                   December 1, 1992
Mantrose-Haeuser Co., Inc.                                        January 1, 1993
Dynatron/Bondo Corporation                                        October 1, 1993
Weyman Fabrics (a division of Design/Craft Fabric Corporation)   December 1, 1993
Empire Fabrics (a division of Design/Craft Fabric Corporation)   December 1, 1993
</TABLE>











                                       12


<PAGE>   213



                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

                       ATTACHMENT C TO ADOPTION AGREEMENT
                       ----------------------------------

                PARTICIPATING COMPANIES COVERING HOURLY EMPLOYEES
                -------------------------------------------------

                                 AGR Company
                                 Bondex International, Inc.
                                 Carboline Company
                                 Consolidated Coatings Corporation
                                 Craft House Corporation
                                 Day-Glo Color Corp.
                                 Floquil-Polly S Color Corp.
                                 Kop-Coat, Inc.
                                 Mohawk Finishing Products, Inc.
                                 Paramount Technical Products, Inc.
                                 Republic Powdered Metals, Inc.
                                 The Testor Corporation
                                 Wisconsin Protective Coatings Corp.
                                 Sentry Polymers, Inc. (9/1/92)
                                 Mantrose-Haeuser Co., Inc. (1/1/93)
                                 Westfield Coatings Corporation (6/1/93)
                                 Dynatron/Bondo Corporation (10/1/93)







                                       13

<PAGE>   214



                                 AMENDMENT NO. 3

                                       TO

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

        This Amendment No. 3 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

        WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan (hereinafter called the "Trust and Plan"), effective June 1, 1992, by
completing and executing an Adoption Agreement (hereinafter called the "Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company reserved the right to amend the Adoption Agreement
pursuant to Section 27.1 of the Trust and Plan; and

        WHEREAS, the Company previously amended the Adoption Agreement, removing
it from prototype status; and

        WHEREAS, the Company desires to amend the Adoption Agreement in order to
modify the withdrawal provisions contained therein and to amend the provisions
of the Trust and Plan relating to the method of distributions pursuant to
qualified domestic relations orders and the amendment provisions contained
therein;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Adoption Agreement and the Trust and Plan, effective
as hereinafter provided, as follows:

        1. Effective May 31, 1993, Section (34)(e) is hereby amended by the
addition thereto of the following paragraph:



<PAGE>   215

                "Notwithstanding the provisions of this Section (34)(e), amounts
        transferred to rollover accounts hereunder from participants' Transfers
        Accounts in the RPM, Inc. Retirement Plan may not be withdrawn."

        2. Effective April 1, 1995, Article XXII of the Trust and Plan is hereby
amended by the addition thereto of a new Section 22.10 to read as follows:

                "22.10 IMMEDIATE LUMP SUM PAYMENTS PURSUANT TO QUALIFIED
        DOMESTIC RELATIONS ORDERS. Notwithstanding anything contained in the
        Trust and Plan to the contrary, an immediate lump sum distribution shall
        be made to an alternate payee if such distribution is authorized by a
        qualified domestic relations order."

        3. Effective May 31, 1993, Section 27.1 of the Trust and Plan is hereby
amended by the deletion of said Section 27.1 and the substitution in lieu
thereof of the following:

                "In the event the Company chooses to consider this Trust and
        Plan as individually designed, the Trust and Plan may be modified,
        altered, amended, changed or terminated by the Company by action of its
        Board of Directors and/or by a writing executed by the Company by its
        proper officer or officers; provided, however:

                (a)     No amendment shall deprive any participant, retired
                        participant, former participant or any beneficiary of
                        any vested rights to which he is entitled under this
                        Trust and Plan;

                (b)     No amendment shall provide for the use of any assets
                        held under the Trust and Plan for any purpose other than
                        for the benefit of the participants and their
                        beneficiaries to an extent greater than is provided in
                        Sections 27.3 and 28.6; and

                (c)     No amendment shall cause any funds contributed to this
                        Trust and Plan or any assets held under the Trust and
                        Plan to revert to or be made available to the Company to
                        an extent greater than is provided in Sections 27.3 and
                        28.6."




                                       2
<PAGE>   216

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 3 to be executed this 1st day of May, 1995.

                                                RPM, INC. ("Company")

                                                By: /s/ Richard E. Klar
                                                   -----------------------------

                                                And: /s/ Paul A. Granzier
                                                    ----------------------------














                                       3
<PAGE>   217



                                 AMENDMENT NO. 4

                                       TO

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

        This Amendment No. 4 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

        WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan (hereinafter called the "Trust and Plan"), effective June 1, 1992, by
completing and executing an Adoption Agreement (hereinafter called the "Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 of thereof; and

        WHEREAS, the Company desires to amend the Trust and Plan to secure a
favorable determination letter from the Internal Revenue Service;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends Section 18.3A of the Trust and Plan, effective as of June
1, 1992, as follows:

                "18.3A ANNUITY METHODS OF DISTRIBUTION. In lieu of receiving a
        single lump sum payment pursuant to Section 18.2A, or if the normal
        method of distribution selected in Section (28) of the Adoption
        Agreement is the Annuity Method, a participant, former participant or
        beneficiary of a deceased participant may elect to receive the amounts
        distributable to him pursuant to Articles XV, XVI and XVII in the form
        of an annuity contract, payable immediately, if so elected by the
        participant, purchased for him from an





<PAGE>   218

        insurance company by the Trustee pursuant to Section 18.11A hereof.
        Unless another form of annuity contract is selected under Section 18.4A,
        any such annuity contract shall normally provide by its terms for
        benefits to be paid:

                (a)     to a married participant or a married former participant
                        in the Spouse's Annuity Form described in Section 18.4A;
                        and

                (b)     to an unmarried participant, an unmarried former
                        participant or a beneficiary of a participant in the
                        Full Cash Refund Life Annuity Form described in Section
                        18.4A."

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 4 to be executed this 27th day of July, 1995.

                                               RPM,INC.

                                                     ("Company")

                                               By:  /s/ Thomas C. Sullivan
                                                  ------------------------------

                                               And:  /s/ Paul A. Granzier
                                                   -----------------------------







                                       2

<PAGE>   219

                                 AMENDMENT NO. 5

                                       TO

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

        This Amendment No. 5 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

        WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan (hereinafter called the "Trust and Plan"), effective June 1, 1992, by
completing and executing an Adoption Agreement (hereinafter called the "Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company previously amended the Adoption Agreement, removing
it from prototype status; and

        WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 of thereof;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Trust and Plan and the Adoption Agreement, effective
as hereinafter provided, as follows:

        1. Effective June 1, 1996, Section 12 of the Adoption Agreement is
hereby amended by the deletion of said Section and the substitution in lieu
thereof of the following:

                "(12) COVERED EMPLOYEES. Covered Employees under the Trust and
        Plan are all employees of Participating Companies, excluding the
        following:

                        [X]     aliens whose expected employment within the
                                United States will be less than 2 YEARS.






<PAGE>   220


                        [X]     employees covered by a collective bargaining
                                agreement to which a Participating Company is a
                                party, unless such collective bargaining
                                agreement provides for participation in the
                                Trust and Plan

                        [ ]     salaried employees

                        [ ]     hourly-paid employees

                        [X]     leased employees

                        [ ]     commissioned salesmen

                        [ ]     ______________________ job categories at the
                                ______________________ location

                        [ ]     other (specify):

                        [ ]     none

        The foregoing exclusions may only be elected to the extent that any such
        election will not cause the Trust and Plan to fail to satisfy the
        requirements set forth in Sections 401(a)(26) and 410(b) of the Code."

        2. Effective September 1, 1995, Sections 34 (f) and (g) of the Adoption
Agreement are hereby amended by the deletion of said Sections and the
substitution in lieu thereof of the following:

                "(f) WITHDRAWALS FROM AFTER TAX ACCOUNTS. Withdrawals from after
        tax accounts:

                        [X]     are permitted

                        [ ]     are not permitted

                (g) WITHDRAWALS FROM PRE-87 IRA ACCOUNTS. Withdrawals from
        Pre-87 IRA accounts:

                        [X]     are permitted

                        [X]     are permitted after age __________






                                       2
<PAGE>   221
                        [ ]     are permitted for hardship

                        [ ]     are not permitted"


        3. Effective January 1, 1996, Attachment A to the Adoption Agreement is
hereby amended by the addition thereto of the following affiliates:

                Dryvit Systems, Inc.

                Star Finishing Products, Inc.

        4. Effective January 1, 1996, Attachment B to the Adoption Agreement is
hereby amended by the addition thereto of the following affiliates and Adoption
Dates:

          Name                                   Adoption Date
          ----                                   -------------
          Dryvit Systems, Inc.                   January 1, 1996
          Star Finishing Products, Inc.          January 1, 1996

        5. Effective June 1, 1996, Attachment C to the Adoption Agreement is
hereby deleted.

        6. Effective June 1, 1992, Section 12.1 of the Trust and Plan is hereby
amended by the deletion of the first sentence of said Section and the
substitution in lieu thereof of the following:

        "If permitted under Section (32) of the Adoption Agreement, a
        participant or former participant, if such former participant is a party
        in interest, may apply to the Administrator for a loan from the Trust
        and Plan."

        7. Effective June 1, 1992, Section 12.4 of the Trust and Plan is hereby
amended by the deletion of said Section and the substitution in lieu thereof of
the following:

                "12.4 PARTY IN INTEREST DEFINED. For purposes of this Article,
        the words "party in interest" shall mean any person who is a party in
        interest within the meaning of Section 3(14) of ERISA. For purposes of
        determining whether a person is a party in



                                       3
<PAGE>   222

        interest under the loan provisions contained in this Article, the words
        "party in interest" generally refer to a former employee who is either
        an officer or director of the Company or an affiliate."

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 5 to be executed this 29th day of November, 1995.

                                        RPM, INC.

                                                ("Company")

                                         By: /s/ Thomas C. Sullivan
                                            ------------------------------------

                                         And: /s/ Paul A. Granzier
                                             -----------------------------------







                                       4
<PAGE>   223


                                 AMENDMENT NO. 6

                                       TO

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

        This Amendment No. 6 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   ----------

         WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan (hereinafter called the "Trust and Plan"), effective June 1, 1992, by
completing and executing an Adoption Agreement (hereinafter called the "Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

         WHEREAS, the Company previously amended the Adoption Agreement,
removing it from prototype status; and

         WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 of thereof;

         NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Trust and Plan and the Adoption Agreement, effective
as of June 1, 1996, unless otherwise provided herein, as follows:

                         AMENDMENT OF ADOPTION AGREEMENT
                         -------------------------------

         1. The Adoption Agreement is hereby amended by changing the name of the
Trust and Plan to the RPM, Inc. 401 (k) Trust and Plan.

         2. Section 17 (a) (ii) of the Adoption Agreement is hereby amended by
the deletion of said Section and the substitution in lieu thereof of the
following:

        [X] (ii) Matching Contributions. A matching contribution in an
                 amount equal to:





<PAGE>   224

         [X]      25 % of the first 6 0 of compensation contributed by an
                  eligible participant as pre-tax contributions. (The maximum
                  matching contribution shall be 1.5% of compensation)

         [ ]      a percentage of each eligible participant's pre-tax
                  contributions as determined by the Participating Company for a
                  match period up to a maximum matching contribution of
                  (percentage of participant's compensation or dollar amount)
         The match period for which matching contributions are made is:

         [ ]      week

         [X]      calendar month

         [ ]      calendar quarter

         [ ]      semi-annual

         [ ]      plan year

         [ ]      Company's pay period

         [ ]      each Participating Company's pay period

         3. Section (20)(b) the Adoption Agreement is hereby amended by the
deletion of said Section and the substitution in lieu thereof of the following:

         (b) VESTING OF MATCHING CONTRIBUTIONS. Matching contributions made by a
         Participating Company pursuant to Section 17 (a) (ii) of this Adoption
         Agreement become vested as follows:

         [X]      Vested Percentage is 100% at all times

         [ ]      Vested Percentage is determined in accordance with the vesting
                  schedule in Section (20) (a) above

         4. Section (32) of the Adoption Agreement is hereby amended by the
deletion of said Section and the substitution in lieu thereof of the following:








                                       2
<PAGE>   225

         (32) LOANS. Loans:

                  [X]      are permitted in any circumstances upon approval of
                           loan application

                  [ ]      are permitted only in the following limited
                           circumstance(s) and upon approval of the loan
                           application

                           [ ]      in the event the participant would otherwise
                                    qualify for a hardship distribution, but for
                                    the availability of a plan loan or other
                                    assets

                           [ ]      Other (specify)____________________________

                  [ ]      are not permitted

         If permitted, loans may be made from the following accounts: all
         accounts:

                  [ ]      all accounts

                  [X]      pre-tax account

                  [ ]      match account

                  [ ]      employer contribution account

                  [ ]      special ADP account

                  [ ]      personal account

         5. Section (34)(d) of the Adoption Agreement is hereby amended by the
deletion of said Section and the substitution in lieu thereof of the following;

         (d)      WITHDRAWALS FROM MATCH ACCOUNTS. Withdrawals from match
                  accounts:

                  [ ]      are permitted after:

                           Choose one:
                           ----------

                           [ ]      the amounts have been credited to such
                                    account for at least 2 years

                           [ ]      the participant has completed a minimum of 5
                                    years of service

                  [X]      are permitted after age 59-1/2




                                       3
<PAGE>   226

                  [ ]      are not permitted

                  [ ]      not applicable

         6. Section (41) of the Adoption Agreement is hereby amended by the
deletion of said Section (41) and the substitution in lieu thereof of the
following:

                  (41) EXCESS ANNUAL ADDITIONS. If a Participating Company
         maintains more than one qualified plan and the limitations set forth in
         Sections 24.1 and 24.2 of the Trust and Plan are exceeded, the benefits
         of a participant who participates in more than one such plan will be
         reduced in the following order:

                           (a)      FIRST, ALLOCATIONS MADE UNDER THIS TRUST AND
                                    PLAN SHALL BE REDUCED;

                           (b)      SECOND MATCHING CONTRIBUTIONS MADE UNDER
                                    THIS TRUST AND PLAN SHALL BE REDUCED;

                           (c)      THIRD PROJECTED BENEFITS UNDER THE RPM, INC.
                                    RETIREMENT PLAN SHALL BE REDUCED; AND

                           (d)      FOURTH ACCRUED BENEFITS UNDER THE RPM INC.
                                    RETIREMENT PLAN SHALL BE REDUCED

                      AMENDMENT OF TRUST AND PLAN DOCUMENT

         7. Article II of the Trust and Plan is hereby amended by the addition
thereto of new Sections 2.45 and 2.46 to read as follows:

                  2.45 AMOUNTS. The word "amounts" shall mean amounts of cash
         and Shares credited to participants' accounts.

                  2.46 SHARES. The word "Shares" shall mean shares of the
         Company's common stock.

         8. Section 6.3 of the Trust and Plan is hereby amended by the deletion
of said Section 6.3 and the substitution in lieu thereof of the following:




                                       4
<PAGE>   227

                  6.3 MATCHING CONTRIBUTIONS. If Section (17)(a) of the Adoption
         Agreement so provides, each Participating Company may make a matching
         contribution to this Trust and Plan for each period specified in
         Section (17) (a) of the Adoption Agreement. Such contribution shall be
         made in Shares. Such matching contribution, if any, shall be allocated
         to the match account of each participant on whose behalf it is made.


         9. Article IX of the Trust and Plan is hereby amended by the addition
thereto of new Sections 9.7 through 9.15 to read as follows:

                  9.7 MAINTENANCE OF PRE-TAX CONTRIBUTION STOCK FUND. Effective
         June 1, 1992, the Trustee established and continues to maintain a
         Pre-Tax Contribution Stock Fund within the Trust Fund. Prior to June 1,
         1996, pre-tax contributions made by the Participating Companies on a
         participant's behalf and contributed to the Trust and Plan pursuant to
         Section 5.4 hereof and all dividends and other amounts attributable to
         such pre-tax contributions that were made in cash and used to purchase
         Shares shall continue to be held and invested in the Pre-Tax
         Contribution Stock Fund. On and after June 1, 1996, participants may no
         longer direct the investment of pre-tax contributions made on their
         behalf into the Pre-tax Contribution Stock Fund.

                  9.8 MAINTENANCE OF MATCHING CONTRIBUTION STOCK FUND. Effective
         June 1, 1996, the Trustee shall establish and maintain a Matching
         Contribution Stock Fund within the Trust Fund. All matching
         contributions made by the Participating Companies with respect to post
         May 31, 1996 compensation contributed to the Trust and Plan pursuant to
         Section 6.3 hereof and all dividends and other amounts attributable to
         such matching contributions that either are made in Shares or are made
         in cash and used to purchase Shares shall be held and invested in the
         Matching Contribution Stock Fund.




                                       5
<PAGE>   228


                  9.9 INVESTMENT OF PRE-TAX AND MATCHING CONTRIBUTION STOCK
         FUNDS. The Pre-Tax Contribution Stock Fund and Matching Contribution
         Stock Fund shall be invested exclusively in Shares, except that the
         Trustee may retain an amount of cash sufficient to pay out any
         fractional Shares or small Share balances which participants may be
         entitled to on distribution of their accounts. Any monies, contributed
         by the Participating Companies or received pursuant to cash dividends
         paid on or cash distributions made with respect to Shares held by the
         Trustee, shall be invested in Shares as soon as reasonably possible
         after their receipt. The Company shall not be obligated to sell any
         Shares to the Trustee, but may do so in the sole discretion of its
         stockholders or Board, as the case may be, out of authorized but
         unissued Shares, treasury Shares or Shares previously issued and
         reacquired by the Company. In order to ensure the availability of
         Shares for purchase by the Trustee, the Trustee may, at the direction
         of the Company, enter into an agreement to purchase Shares with, or
         acquire an option to purchase Shares from, such person or persons,
         including the Company, its directors or officers, as the Company shall
         select.

                  Notwithstanding the foregoing provisions of this Section 9.9,
         the Pre-Tax Contribution Stock Fund and Matching Contribution Stock
         Fund shall be invested in Shares only while Shares (i) constitute
         "qualifying employer securities,' as such term is defined in Section
         4975 of the Code and Section 407 (d) of ERISA and (ii) are available
         and (iii) have not been disposed of pursuant to a participant vote or
         merger as provided in Section 9.10 hereof. At any such time such
         investment may constitute more than ten percent (l00) of the fair
         market value of the assets of the Trust Fund and as much as one


                                       6
<PAGE>   229

         hundred percent (1000) of the fair market value of the assets of the
         Pre-Tax Contribution Stock Fund and the Matching Contribution Stock
         Fund.

                  If the Shares cease to be "qualifying employer securities,"
         cease to be available, or are either sold pursuant to a participant
         vote or converted to cash in a merger described in Section 9.10 hereof,
         proceeds from the disposition of Shares, or amounts which otherwise
         would be invested in Shares, shall be invested in investment funds
         otherwise selected by the Company pursuant to Section 9.2 hereof.
         Initially, such amounts shall be invested as follows:


         (a)      if an affected participant, former participant or beneficiary
                  is directing the investment of his accounts pursuant to
                  Section 9.3 hereof, such amounts shall be invested in
                  accordance with the direction in effect for the investment of
                  new contributions or, if no such election is in effect with
                  respect to the investment of new contributions, but an
                  election is in effect with respect to the investment of
                  existing account balances, then in accordance with such
                  election; or

         (b)      if an affected participant, former participant or beneficiary
                  is not directing the investment of his accounts pursuant to
                  Section 9.3 hereof, such amounts shall be invested in the
                  default fund designated by the Company; or

         (c)      if the Company is not permitting participants, former
                  participants or beneficiaries to direct the investment of
                  their accounts pursuant to Section 9.3 hereof, then the
                  amounts shall be invested in the discretion of the person
                  directing such investment.

                  Following the initial investment of such amounts, the
         investment thereof shall be subject to the provisions otherwise
         applicable to the investment of accounts hereunder.

                  9.10 CONTRIBUTIONS CONDITIONED ON QUALIFICATION. This Trust
         and Plan has been established and contributions will be made hereto on
         the express condition that it initially be and. remain a qualified plan
         under Section 401(a) of the Code. It is intended that the Participating
         Companies, participants and beneficiaries be entitled to the benefits
         of the special provisions of the Code and ERISA which are applicable to
         qualified plans including:




                                       7
<PAGE>   230

         (a)      deduction of employer contributions pursuant to Section 404 of
                  the Code;

         (b)      deduction of 401(k) contributions pursuant to Section 401(k)
                  of the Code;

         (c)      deferral of tax to plan participants until receipt of
                  distributions from the Trust and Plan pursuant to Section 402
                  of the Code;

         (d)      special income averaging provisions applicable to lump sum
                  distributions from the Trust and Plan pursuant to Section 402
                  (e) of the Code; and

         (e)      exemption of the Trust Fund from taxation under Section 501
                  (a) of the Code;

         and this Trust and Plan is expressly conditioned upon the initial and
         continued qualification of this Plan for such benefits.

                  Because the sale or exchange of the Shares held by this Trust
         and Plan could result in the violation of Section 411 (d) (6) of the
         Code, disqualification of this Trust and Plan as a qualified plan and
         in the loss to the Participating Companies, participants and
         beneficiaries of the beneficial provisions of the Code and ERISA
         described above, the Trustee is hereby expressly forbidden from selling
         or exchanging any of the Shares held in the Trust Fund except as
         follows:

         (i)      the Trustee can sell Shares solely for the purpose of making
                  distributions of cash in lieu of fractional Shares or to
                  distribute Share balances pursuant to Section 18.2 or hereof;

         (ii)     except as provided in (i) above, the Trustee may sell or
                  exchange Shares only if:

                  (A)      the Board approves the sale or exchange of the
                           Shares; and

                  (B)      the participant to whose account the Shares are
                           allocated under this Trust and Plan votes in favor of
                           the sale or exchange of the Shares.

         In the event that a sale or exchange of Shares receives the approvals
         described in paragraph (ii) above, the Trustee shall sell or exchange
         the Shares allocated to the accounts of participants who voted in favor
         of the sale or exchange. The Trustee shall not be permitted to sell or
         exchange the Shares allocated to the accounts of participants who






                                       8
<PAGE>   231



         voted against the sale or exchange or abstained from the vote and such
         Shares shall continue to be held for the benefit of such participants
         until such time as they shall consent to the sale or exchange.

                  9.11 VOTING OF SHARES. Each participant, acting in the
         capacity of a named fiduciary (within the meaning of Section 402 of
         ERISA), shall be entitled to direct the Trustee with respect to the
         voting of the Shares allocated to his accounts on all issues which
         shall be brought to the stockholders of the Company. The Trustee shall
         provide each participant with a form by which the participant may
         direct the Trustee as to the voting of such Shares. In addition, the
         Trustee shall provide participants with copies of any proxy
         solicitation material of which it has been provided with sufficient
         copies. The directions- of participants as to the voting of the Shares
         allocated to their accounts shall be sent directly to the Trustee and
         shall be confidential. The Trustee shall vote any Shares with respect
         to which it receives timely directions from participants in accordance
         with such directions, after combining votes of fractional Shares to
         give effect to the greatest practicable extent of such directions. The
         Trustee shall vote, or abstain from voting, any Shares with respect to
         which it does not receive directions from the participants, as it deems
         appropriate. For the purposes of this Section and Section 9.12, the
         term participant shall include former participants, beneficiaries of
         deceased participants and alternate payees under qualified domestic
         relations orders.

                  9.12 APPRAISAL RIGHTS. In the event that the stockholders of
         the Company are requested to approve a transaction which gives rise to
         appraisal rights under applicable State law, the Trustee shall notify
         each participant to whose accounts Shares are credited which were not
         voted in favor of the transaction of the procedure required in order to



                                       9
<PAGE>   232

         perfect their appraisal rights and request directions with respect to
         whether they wish to exercise such appraisal rights, acting in the
         capacity of a named fiduciary (within the meaning of Section 402 of
         ERISA). The Trustee shall take such actions. as the Trustee deems
         appropriate to perfect and exercise appraisal rights for each
         participant who has timely directed the Trustee to exercise appraisal
         rights, provided that the Trustee does not determine, in its sole
         discretion, that the exercise of appraisal rights is imprudent. With
         respect to any Shares entitled to appraisal rights for which the
         Trustee receives no timely direction, the Trustee shall determine
         whether and in what manner to perfect and exercise such appraisal
         rights, in its sole discretion.

         To the extent that any such participants shall direct the Trustee to
         perfect their appraisal rights, the Trustee shall debit their accounts
         by the number of Shares credited to their accounts at the time of the
         transaction and shall segregate on their behalf an equivalent number of
         Shares. Such segregated Shares shall be surrendered to the Company upon
         the settlement of the claim for appraisal rights. The amount paid to
         the Trustee for the appraisal rights claim with respect to the
         segregated Shares of any participant shall be credited to the pre-tax
         account or match account, as applicable, of such participant. During
         any period during which appraisal rights are being pursued with respect
         to a participant, he shall continue to be a participant hereunder and
         shall be entitled to have matching contributions, including Shares if
         applicable, credited to his match account in accordance with Article VI
         hereof.

                  9.13 INTERIM INVESTMENTS. Pending investment in Shares
         pursuant to Section 9.9, the Trustee may invest and reinvest any monies
         received by it in short-term money market investments including
         short-term corporate, individual or government obligations,






                                       10
<PAGE>   233

         whether secured or unsecured, time or savings deposits of the Trustee
         or any parent or affiliate thereof if such deposits bear a reasonable
         rate of interest or of any bank, trust company, or savings and loan
         institution, which deposits may, but need not be, guaranteed by the
         Federal Deposit Insurance Corporation, or in shares of any Regulated
         Investment Company, in units of any common trust fund or in partnership
         interests of any partnership which Regulated Investment Company, common
         trust fund or partnership invests in such short-term money market
         instruments and deposits.

                  9.14 DIVERSIFICATION OF INVESTMENTS. Notwithstanding any other
         provision of this Trust and Plan to the contrary:

                  (a)      a participant who has attained the age of fifty-nine
                           and one-half (59-1/2) may elect to sell the Shares
                           credited to his match account and direct the
                           investment of the proceeds of such sale; and

                  (b)      a participant may elect to sell the Shares credited
                           to his pre-tax account at any time and to direct the
                           investment of the proceeds from such sale.

         Any such direction shall be made in accordance with the provisions of
Article IX hereof.

                  9.15 DISTRIBUTIONS IN CASH OR IN SHARES. Distributions from a
         participant's match account and pre-tax account shall be made in cash
         or in Shares, to the extent such accounts are invested in Shares at the
         time of distribution, as the participant or his beneficiary, in the
         event of such participant's death, shall elect; provided, however, that
         fractional Shares shall be distributed in cash. Distributions from any
         other account shall be made in cash.

         10. Section 12.2 of the Trust and Plan is hereby amended by the
addition thereto of the following subsection (g):

                           "(g) ADDITIONAL LOANS. Each borrower is limited to no
                           more than one (1) loan outstanding at any time;
                           provided, however, that if the amount of a borrower's
                           current loan is less than the limit provided in
                           Section 12.1 hereof, he may borrow additional
                           amounts, not to exceed such limit. Such



                                       11
<PAGE>   234
               additional borrowed amounts shall be aggregated with the current
               outstanding loan balance. The aggregate loan shall be subject to
               the term of the original loan. Interest on the aggregate
               outstanding amount shall be charged at a reasonable rate,
               comparable to the rate charged by a commercial lender for a
               similar loan at the time the additional amount is borrowed."

         IN WITNESS WHEREOF, the Company, by its duly authorized officers, as
caused this Amendment No. 6 to be executed this 9th day of Sept., 1996.

                                      RPM, INC.

                                                      ("Company")

                                      By: /s/ Paul A. Granzier
                                         --------------------------------------

                                      And:  /s/ Frank C. Sullivan
                                          -------------------------------------













                                       12
<PAGE>   235



                                 AMENDMENT NO. 7

                                       TO

                         RPM, INC. 401(K) TRUST AND PLAN

         This Amendment No. 7 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

         WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan, which is now known as the RPM, Inc. 401(k) Trust and Plan (hereinafter
called the "Trust and Plan"), effective June 1, 1992, by completing and
executing an Adoption Agreement (hereinafter called the "Adoption Agreement') to
the Calfee, Halter & Griswold Regional Prototype Plan; and

         WHEREAS, the Company previously amended the Adoption Agreement,
removing it from prototype status; and

         WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 thereof;

         NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Trust and Plan and the Adoption Agreement, effective
as of the dates indicated, as follows:

         1. Effective March 1, 1997, Section 17(a)(ii) of the Adoption Agreement
is hereby amended by the deletion of said Section and the substitution in lieu
thereof of the following:

   [X]  (ii)   MATCHING CONTRIBUTIONS. A matching contribution in an
               amount equal to:

                [X]     50% of the first 6% of compensation contributed by an
                        eligible participant as pre-tax contributions. (The
                        maximum matching contribution shall be 3.0% of
                        compensation)






<PAGE>   236

                [ ]     a percentage of each eligible participant's pre-tax
                        contributions as determined by the Participating Company
                        for a match period up to a maximum matching contribution
                        of ________ (percentage of participant's compensation or
                        dollar amount)


                The match period for which matching contributions are made is:

                [ ]     week

                [X]     calendar month

                [ ]     calendar quarter

                [ ]     semi-annual

                [ ]     plan year

                [ ]     Company's pay period

                [ ]     each Participating Company's pay period

        2. Effective June 1, 1996, Section (32) of the Adoption Agreement, which
is hereby amended by the deletion of said Section and the substitution in lieu
thereof the following:

        (32)    Loans. Loans:

                [X]     are permitted in any circumstances upon approval of loan
                        application

                [ ]     are permitted only in the following limited
                        circumstance(s) and upon approval of the loan
                        application

                        [ ]     in the event the participant would otherwise
                                qualify for a hardship distribution, but for the
                                availability of a plan loan or other assets

                        [ ]     Other
                                (specify):______________________________________
                                ________________________________________________

                        [ ]     are not permitted

        If permitted, loans may be made from the following accounts:

                [ ]     all accounts




                                       2
<PAGE>   237


                [X]     pre-tax account

                [ ]     match account

                [ ]     employer contribution account

                [ ]     special ADP account

                [X]     personal account

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 7 to be executed this 15th day of September, 1997.



                                                RPM, INC.

                                                           ("Company")

                                                By: /s/ Paul A. Granzier
                                                   -----------------------------

                                                And: /s/ Frank C. Sullivan
                                                    ----------------------------















                                       3
<PAGE>   238

                                AMENDMENT NO. 8

                                       TO

                         RPM, INC. 401(K) TRUST AND PLAN

        This Amendment No. 8 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

        WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan, which is now known as the RPM, Inc. 401(k) Trust and Plan (hereinafter
called the "Trust and Plan"), effective June 1, 1992, by completing and
executing an Adoption Agreement (hereinafter called the "Adoption Agreement") to
the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company previously amended the Adoption Agreement, removing
it from prototype status; and

        WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 thereof;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Trust and Plan and the Adoption Agreement, effective
as of February 1, 1997, as follows:

                         AMENDMENT TO ADOPTION AGREEMENT

        1. Attachment A to the Adoption Agreement is hereby amended by the
addition of Tremco Incorporated to the list of companies contained therein.

        2. Attachment B to the Adoption Agreement is hereby amended by the
addition thereto of the following Affiliate and Adoption Date:




<PAGE>   239

Name                       Adoption Date                        Cessation Date
- ----                       -------------                        --------------

Tremco Incorporated        February 1, 1997



                           AMENDMENT TO TRUST AND PLAN
                           ---------------------------

        3. Effective February 1, 1997, the Plan is hereby amended by the
addition thereto of a new Supplemental Agreement which is attached hereto in its
entirety.

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 8 to be executed this 24th day of December, 1997.

                                      RPM, INC.
                                                              ("Company")

                                      By:  /s/ Frank C. Sullivan
                                         --------------------------------------

                                      And: /s/ Keith R. Smiley
                                          -------------------------------------
















                                       2
<PAGE>   240



                             SUPPLEMENTAL AGREEMENT

                                      TO

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

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

                       RELATING TO FORMER PARTICIPANTS IN

             THE B.F. GOODRICH COMPANY RETIREMENT PLUS SAVINGS PLAN

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

        This Supplemental Agreement to the RPM, Inc. Retirement Savings Trust
and Plan, relating only to certain Participants as is set forth herein, will be
effective for all purposes as of February 1, 1997.

                                   Article I

                                   Definitions
                                   -----------

        1.1 The words "Goodrich Plan" shall mean The B.F. Goodrich Company
Retirement Plus Savings Plan.

        1.2 The words "Prior Goodrich Plan Participant" shall mean any employee
of Tremco Incorporated who, immediately prior to February 1, 1997, participated
in the Goodrich Plan.

                                   Article II

                      Prior Plan Service and Participation
                      ------------------------------------


        2.1 Notwithstanding anything to the contrary in the Trust and Plan, the
date of hire for determining whether an employee of Tremco Incorporated on
February 1, 1997 who is not a Prior Goodrich Plan Participant is eligible to
participate under Article IV of the Trust and








                                       3
<PAGE>   241

        Plan shall include any date on which such an employee commenced
        employment and worked at least one (1) hour for Tremco Incorporated.


        2.2 Notwithstanding anything to the contrary in the Trust and Plan, a
Prior Goodrich Plan Participant shall automatically become a participant under
the Trust and Plan on February 1, 1997.
















                                       4
<PAGE>   242


                                 AMENDMENT NO. 9

                                       TO

                         RPM, INC. 401(K) TRUST AND PLAN

        This Amendment No. 9 is executed as of the date set forth below by RPM,
Inc., an Ohio corporation (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

        WHEREAS, the Company adopted the RPM, Inc. Retirement Savings Trust and
Plan, which is now known as the RPM, Inc. 401(k) Trust and Plan (hereinafter
called the "Trust and Plan"), effective June 1, 1992, by completing and
executing an Adoption Agreement (hereinafter called the "Adoption Agreement") to
the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company previously amended the Adoption Agreement, removing
it from prototype status; and

        WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 thereof;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends Section (10) of the Adoption Agreement, effective as of
December 31, 1997, by the deletion of said Section (10) and the substitution in
lieu thereof of the following:

        "(10)   PLAN YEAR. The plan year is:

                (a)     for periods prior to June 1, 1997, the 12-month period
                        commencing on June 1 and ending on May 31;

                (b)     the 7-month period commencing on June 1, 1997 and ending
                        on December 31, 1997; and

                (c)     for periods after December 31, 1997, the calendar year."









<PAGE>   243

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 9 to be executed effective as of the 31st day of
December, 1997.

                               RPM, INC.
                                                       ("Company")

                               By:  /s/ Frank C. Sullivan
                                  ----------------------------------------------

                               And: /s/ Keith R. Smiley
                                   ---------------------------------------------


















                                       2
<PAGE>   244


                                AMENDMENT NO. 10
                                       TO
                         RPM, INC. 401(k) TRUST AND PLAN
                         -------------------------------


        This Amendment No. 10 is executed as of the date set forth below by RPM,
Inc. (hereinafter called the "Company");

                                   WITNESSETH:
                                   -----------

        WHEREAS, the Company established the RPM, Inc. 401(k) Trust and Plan
(hereinafter called the "Trust and Plan"), effective June 1, 1992, by completing
and executing an Adoption Agreement (hereinafter called the "Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company subsequently adopted an amendment to the Trust and
Plan, removing the Trust and Plan from prototype status; and

        WHEREAS, the Company reserved the right to amend the Adoption Agreement
and the Trust and Plan pursuant to Section 27.1 thereof; and

        WHEREAS, the Company desires to amend the Adoption Agreement and the
Trust and Plan in order to revise the provisions relating to involuntary
cashouts and mandatory distributions under Section 401(a)(9) of the Internal
Revenue Code;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Adoption Agreement and the Trust and Plan, effective
as of June 1, 1998, as follows:

                         AMENDMENT OF ADOPTION AGREEMENT
                         -------------------------------

        1. Section (29) of the Adoption Agreement is hereby amended by the
deletion of said Section (29) and the substitution in lieu thereof of the
following:





<PAGE>   245

                "(29) BENEFIT COMMENCEMENT DATE. In the event of the termination
        of employment of a participant for any reason other than his death,
        disability or retirement, distribution shall be made or shall commence
        to be made pursuant to Section 15.2 of the Trust and Plan as of the date
        specified below:

                (a)     if the value of his vested interest is $5,000 or less
                        (not more than $5,000):

                        [X]     as soon as reasonably possible following his
                                termination of employment

                        [ ]     as soon as reasonably possible following the
                                close of the plan year in which occurs his
                                termination of employment

                        [ ]     as soon as reasonably possible following the
                                close of the calendar quarter in which occurs
                                his termination of employment

                        [ ]     as soon as reasonably possible following the
                                close of the half-year in which occurs his
                                termination of employment

                        [ ]     as soon as reasonably possible following the
                                valuation date which next follows the date on
                                which occurs his termination of employment

                        [ ]     at the same time as indicated in (b) below if
                                his vested interest were a larger amount

                (b)     if the value of his vested interest is in excess of
                        $5,000:

                        [X]     as soon as reasonably possible following the
                                close of the plan year in which his normal
                                retirement date occurs, or as of such earlier
                                date as the participant shall select provided
                                such earlier date is not earlier than an
                                administratively reasonable period beyond the
                                date of his termination of employment

                        [ ]     as soon as reasonably possible following the
                                close of the plan year in which his normal
                                retirement date occurs, or as of such earlier
                                date as the participant shall select provided
                                such earlier date is not earlier than
                                ____________________________________

                        [ ]     as of the date specified below determined on the
                                basis of the amount of his vested interest:

                                (i)     if the value of his vested interest is
                                        greater than $_______ (not more than
                                        $5,000), but not in excess of
                                        $_________, the distribution shall be
                                        made or shall commence as soon as





                                       2
<PAGE>   246

                                        reasonably possible following the close
                                        of the plan year in which his normal
                                        retirement date occurs, or as of such
                                        earlier date as the participant shall
                                        select provided such earlier date is not
                                        earlier than an administratively
                                        reasonable period beyond the date of his
                                        termination of employment; or



                                (ii)    if the value of his vested interest is
                                        in excess of $________, the distribution
                                        shall be made or shall commence as soon
                                        as reasonably possible following the
                                        close of the plan year in which his
                                        normal retirement date occurs, or as of
                                        such earlier date as the participant
                                        shall select provided such earlier date
                                        is not earlier than an administratively
                                        reasonable period beyond __________

               Except as otherwise permitted by the Adoption Agreement pursuant
               to Section 18.1 or 18.1A of the Trust and Plan, and pursuant to
               the election of the participant, distributions must be made or
               commence to be made not later than sixty (60) days after the
               close of the plan year in which the participant's normal
               retirement date occurs."

                      AMENDMENT OF TRUST AND PLAN DOCUMENT
                      ------------------------------------

        2. Effective January 1, 1999, Section 12.2 of the Plan is hereby amended
by the addition of a new paragraph at the end of subparagraph (b) to read as
follows:

                "Participants who have a termination of employment on or after
                January 1, 1999 shall, within an administratively reasonable
                period established by the Administrator, pursuant to
                nondiscriminatory rules, pay the balance of their outstanding
                loans hereunder. In the event, such a participant does not pay
                the balance of his outstanding loan, such participant shall be
                in default in accordance with the provisions of subparagraph (f)
                below."

        3. Section 18.4 of the Plan is hereby amended by the deletion of said
Section 18.4 and the substitution in lieu thereof of the following:

                "18.4 LUMP SUM PAYMENT OF SMALL AMOUNTS. Notwithstanding any
        contrary provisions of this Trust and Plan, in the event that the vested
        interest and personal accounts of a retired, terminated or deceased
        participant have a value less than or equal to Five Thousand Dollars
        ($5,000.00), the Administrator shall direct the Trustee to



                                       3
<PAGE>   247

                distribute such vested interest and personal accounts in a
                single lump sum payment without the consent of the participant
                or his beneficiary."

        4. Effective January 1, 1999, Section 18.5 of the Trust and Plan is
hereby amended by the deletion of subparagraph (a)(i) of said Section 18.5 and
the substitution in lieu thereof of the following:

        "(i) distribution must commence on or before:

        (A)     with respect to a participant who is a five percent (5%) owner,
                as defined in Section 416(i) of the Code, distribution must
                commence on or before the April 1 following the end of the
                calendar year in which he attains age seventy and one-half
                (70-1/2);

        (B)     with respect to a participant who attains age seventy and
                one-half (70-1/2) after December 31, 1998 and who is not a five
                percent (5%) owner, as defined in Section 416(i) of the Code,
                the April 1 following the end of the calendar year in which he
                attains age seventy and one-half (70-1/2) or the date he
                actually retires, whichever is later; or

        (C)     with respect to a participant who attains age seventy and
                one-half (70-1/2) after December 31, 1996 but prior to January
                1, 1999 and who is not a five percent (5%) owner, as defined in
                Section 416(i) of the Code, distribution must commence on or
                before the April 1 following the end of the calendar year in
                which he attains age seventy and one-half (70-1/2); provided,
                however, that such a participant may elect at any time prior to
                his retirement and upon reasonable notice to the Company that
                minimum required distributions to be made to him following the
                date of his election shall cease and that distributions shall
                re-commence as of a date selected by such participant, which
                date shall not be later than the April 1 immediately following
                the end of the calendar year in which such participant actually
                retires."

        5. Section 18.7A of the Trust and Plan is hereby amended by the deletion
of said Section 18.7A and the substitution in lieu thereof of the following:

                "18.7A LUMP SUM PAYMENT OF SMALL AMOUNTS. Notwithstanding any
        contrary provision of this Trust and Plan, in the event that the vested
        interest and personal accounts of a retired, terminated or deceased
        participant have a value less than or equal to Five Thousand Dollars
        ($5,000.00), the Administrator shall direct the Trustee to






                                       4
<PAGE>   248

                distribute such vested interest and personal accounts in a
                single lump sum payment without the consent of the participant
                or beneficiary. Any such lump sum payment shall be in full
                settlement of such participant's or beneficiary's rights under
                this Trust and Plan."

        6. Effective January 1, 1997, Section 18.9A of the Trust and Plan is
hereby amended by the deletion of subparagraph (a)(i) of said Section 18.9A and
the substitution in lieu thereof of the following:

        "(i)    distribution must commence on or before:

        (A)     with respect to a participant who is a five percent (5%) owner,
                as defined in Section 416(i) of the Code, distribution must
                commence on or before the April 1 following the end of the
                calendar year in which he attains age seventy and one-half
                (70-1/2);

        (B)     with respect to a participant who attains age seventy and
                one-half (70-1/2) after December 31, 1996 but prior to January
                1, 1999 and who is not a five percent (5%) owner, as defined in
                Section 416(i) of the Code, distribution must commence on or
                before the April 1 following the end of the calendar year in
                which he attains age seventy and one-half (70-1/2); provided,
                however, that such a participant may elect at any time prior to
                his retirement and upon reasonable notice to the Company that
                minimum required distributions to be made to him following the
                date of his election shall cease and that distributions shall
                re-commence as of a date selected by such participant, which
                date shall not be later than the April 1 immediately following
                the end of the calendar year in which such participant actually
                retires; or

        (C)     with respect to a participant who attains age seventy and
                one-half after December 31, 1998 and who is not a five percent
                (5%) owner, as defined in Section 416 of the Code, the April 1
                following the end of the calendar year in which he attains age
                seventy and one-half (70-1/2) or the date he actually retires,
                whichever is later."

        7. Effective January 1, 1999, Section 16.1 of the Plan is hereby amended
by the addition to the listing of Participating Companies of the following:




                                       5
<PAGE>   249

Name                           Adoption Date                    Cessation Date
- ----                           -------------                    --------------

Flecto Company, Inc.                                            January 1, 1999

        8. Effective June 13, 1997, Section 16.1 of the Plan is hereby amended
by the addition of a Cessation Date of June 13, 1997 for Craft House
Corporation.

        9. Effective December 4, 1997, Section 16.1 of the Plan is hereby
amended by the addition of a Cessation Date of December 4, 1997 for AGR Company.

        10. Effective May 1, 1998, Section 16.1 of the Plan is hereby amended by
the addition of a Cessation Date of May 1, 1998 for Mameco International, Inc.

        11. Effective September 1, 1998, Section 16.1 of the Plan is hereby
amended by the addition of a Cessation Date of September 1, 1998 for Sentry
Polymers, Inc.

        12. Effective October 14, 1998, Section 16.1 of the Plan is hereby
amended by the addition of a Cessation Date of October 14, 1998 for
Floquil-Polly S Color Corp.

        13. Effective June 13, 1997, the Trust and Plan is hereby amended by the
addition thereto of a new Supplemental Agreement, which is attached hereto in
its entirety, relating to former employees of Craft House Corporation

        14. Effective February 27, 1998, the Trust and Plan is hereby amended by
the addition thereto of a new Supplemental Agreement, which is attached hereto
in its entirety, relating to former employees of Simian Company, Inc.

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 10 to be executed this 29th day of December, 1998.

                                           RPM, INC.
                                                           ("Company")

                                           By:    /s/ Ronald A. Rice
                                              ----------------------------------

                                           And: /s/ P. Kelly Tompkins
                                               ---------------------------------







                                       6



<PAGE>   250



                             SUPPLEMENTAL AGREEMENT

                                       TO

                   RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN

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

         RELATING TO CERTAIN FORMER EMPLOYEES OF CRAFT HOUSE CORPORATION

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

        This Supplemental Agreement to the RPM, Inc. Retirement Savings Trust
and Plan, relating only to certain Participants as is set forth herein, will be
effective for all purposes as of June 13, 1997.

                                   Article I

                                   Definitions
                                   -----------

        1.1 The words "Closing Date" shall mean June 13, 1997, which is the
Closing Date of the transactions set forth in the Stock Purchase Agreement
between RPM, Inc. and Brynwood Partners III L.P. dated as of May 9, 1997.

        1.2 The words "Former Craft House Participant" shall mean any
participant who is employed by Craft House Corporation or any subsidiary of
Craft House Corporation on the Closing Date.

                                   Article II

                          Eligibility and Participation
                          -----------------------------

        2.1 Notwithstanding anything contained in Article III of the Plan to the
contrary, all participants in the Trust and Plan who are Former Craft House
Participants shall cease to be participants under the Trust and Plan at the end
of the business day on the Closing Date.




                                       7
<PAGE>   251

                                  Article III

                                      Loans
                                      -----

        3.1 Notwithstanding anything contained in Article XII to the contrary,
all Former Craft House Employees who have outstanding loans under the Trust and
Plan on the Closing Date, shall pay the balances of said outstanding loans on or
before such administratively reasonable date, determined by the Administrator,
or be in default, in accordance with the provisions of Section 12.2(f) of the
Trust and Plan.














                                       8
<PAGE>   252



                             SUPPLEMENTAL AGREEMENT

                                      TO

                         RPM, INC. 401(k) TRUST AND PLAN

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

          RELATING TO CERTAIN FORMER EMPLOYEES OF SIMIAN COMPANY, INC.

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

        This Supplemental Agreement to the RPM, Inc. 401(k) Trust and Plan,
relating only to certain Participants as is set forth herein, will be effective
for all purposes as of February 27, 1998.

                                   Article I

                                   Definitions
                                   -----------

        1.1 The words "Closing Date" shall mean February 27, 1998, which is the
Closing Date of the transactions set forth in the Stock Purchase Agreement
between RPM, Inc. and SCI Acquisitions, Inc., dated February 27, 1998.

        1.2 The words "Former Simian Participant" shall mean any participant who
is employed by Simian Company or any subsidiary of Simian Company, Inc. on the
Closing Date.

                                   Article II

                          Eligibility and Participation
                          -----------------------------

        2.1 Notwithstanding anything contained in Article III of the Plan to the
contrary, all participants in the Trust and Plan who are Former Simian
Participants shall cease to be participants under the Trust and Plan as of the
end of the business day on the Closing Date.




                                       9
<PAGE>   253


                                  Article III
                                  -----------

                                      Loans
                                      -----

        3.1 Notwithstanding anything contained in Article XII to the contrary,
all Former Simian Employees who have outstanding loans under the Trust and Plan
on the Closing Date, may continue to make payments on the balances of their
loans pursuant to such procedures as are agreed to between the Company and the
Former Simian Participants pursuant to Section 12.2(d) of the Trust and Plan.


















                                       10
<PAGE>   254


                                AMENDMENT NO. 11
                                       TO
                         RPM, INC. 401(k) TRUST AND PLAN
                         -------------------------------


        This Amendment No. 11 is executed as of the date set forth below by RPM,
Inc. (hereinafter called the "Company");

                                   WITNESSETH:

        WHEREAS, the Company established the RPM, Inc. 401(k) Trust and Plan
(hereinafter called the "Trust and Plan"), effective June 1, 1992, by completing
and executing an Adoption Agreement (hereinafter called the "Adoption
Agreement") to the Calfee, Halter & Griswold Regional Prototype Plan; and

        WHEREAS, the Company subsequently adopted an amendment to the Trust and
Plan, removing the Trust and Plan from prototype status; and

        WHEREAS, the Company reserved the right to amend the Trust and Plan
pursuant to Section 27.1 thereof; and

        WHEREAS, the Company desires to amend the Trust and Plan in order to
correct certain references contained in Amendment No. 10 thereto;

        NOW, THEREFORE, pursuant to Section 27.1 of the Trust and Plan, the
Company hereby amends the Trust and Plan as follows:

                The references to "Section 16.1 of the Plan" contained in
        paragraphs 7, 8, 9, 10, 11 and 12 of Amendment No. 10 to the Trust and
        Plan are hereby deleted, effective as of the dates contained in the
        respective paragraphs, and "Attachment B to Adoption Agreement" shall be
        substituted therefor.










<PAGE>   255

        IN WITNESS WHEREOF, the Company, by its duly authorized officers, has
caused this Amendment No. 11 to be executed this 10th day of May, 1999.

                                        RPM, INC.

                                                        ("Company")

                                      By:  /s/ Ronald A. Rice
                                         ---------------------------------------

                                      And: /s/ Keith R. Smiley
                                          --------------------------------------


















                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>7
<FILENAME>l89965aex10-7.txt
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
<PAGE>   1
                                                                   Exhibit 10.7
                                    RPM, INC.

                            BENEFIT RESTORATION PLAN
                            ------------------------

                            Effective January 1, 1991




<PAGE>   2









                                TABLE OF CONTENTS
                                -----------------


                                    Preamble

Section I                           Definitions

Section II                          Supplemental Restoration Benefits

Section III                         Payment of Benefits

Section IV                          Miscellaneous

Section V                           Effective Date




<PAGE>   3



                                    RPM, INC.

                            BENEFIT RESTORATION PLAN

                                    PREAMBLE
                                    --------


                  The principal objective of this Benefit Restoration Plan is to
provide benefits to certain employees participating in the Basic Retirement Plan
(as defined in Section I) of the Company, whose benefits from the plan are
limited by the application of Internal Revenue Code Sections 415 and 401(a)(17).
Eligibility for participation in the Plan shall be limited to executives
selected by the Board of Directors. This Plan will be effective January 1, 1991
and will be effective as to each Participant on the date he or she is designated
as such hereunder. The Company intends and desires by the adoption of this
Benefit Restoration Plan to recognize the value to the Company of the past and
present services of such employees and to encourage their continued services to
the Company by making more adequate provisions for their retirement security.


                                       (i)

<PAGE>   4



                                    SECTION 1
                                    ---------
                                   DEFINITIONS
                                   -----------

                  1.1      ADMINISTRATOR means the Company or any person or
                           entity to which the authority to administer this Plan
                           and the Basic Retirement Plan has been delegated by
                           the Company.

                  1.2      AFFILIATE means any corporation, partnership or other
                           organization which, during any period of employment
                           of a Participant, was at least 50% controlled by the
                           Company or an affiliate of the Company.

                  1.3      BASIC RETIREMENT PLAN means the RPM, Inc. Retirement
                           Plan as originally effective on June 1, 1989 and as
                           such plan may be amended from time to time
                           thereafter.

                  1.4      BASIC DEATH BENEFIT means the amount of death benefit
                           payable from the Basic Retirement Plan to a
                           Participant's Surviving Spouse or Beneficiary, as
                           appropriate, determined by taking into account the
                           limitations contained in the Plan incorporating
                           Sections 415 and 401(a)(17) of the Code.


                                       1-1

<PAGE>   5



                  1.5      BASIC RETIREMENT BENEFIT means the amount of
                           retirement benefit payable from the Basic Retirement
                           Plan to a Participant determined by taking into
                           account the limitations contained in the Plan
                           incorporating Sections 415 and 401(a)(17) of the
                           Code.

                  1.6      BENEFICIARY means the beneficiary or beneficiaries
                           designated by the Participant to receive the Basic
                           Death Benefit under the Basic Retirement Plan.

                  1.7      CODE means the Internal Revenue Code of 1986, as
                           amended.

                  1.8      COMPANY means RPM, Inc., an Ohio corporation.

                  1.9      PARTICIPANT means an employee of the Company or an
                           Affiliate designated as a participant by the Board of
                           Directors. An employee shall become a Participant in
                           the Plan as of the date he or she is individually
                           selected by, and specifically named in the resolution
                           of the Board of Directors for inclusion in the Plan.
                           The Board of Directors may terminate the
                           participation of any Participant at any time. A
                           Participant shall automatically cease

                                       1-2

<PAGE>   6



                           to be a Participant on his date of termination of
                           employment.

                1.10       PLAN means this RPM, Inc. Benefit Restoration Plan.

                1.11       SUPPLEMENTAL DEATH RESTORATION BENEFIT means a death
                           benefit payable under this Plan to a Participant's
                           Surviving Spouse or Beneficiary, as appropriate,
                           equal to the Basic Death Benefit which would have
                           been payable to such Surviving Spouse or Beneficiary
                           under the Basic Retirement Plan without taking into
                           account the limitations contained in the Plan
                           incorporating Sections 415 and 401(a)(17) of the
                           Code, minus the Basic Death Benefit.

                1.12       SUPPLEMENTAL RETIREMENT RESTORATION BENEFIT means a
                           retirement benefit payable under this Plan to a
                           Participant equal to the Basic Retirement Benefit
                           which would have been payable to such Participant
                           under the Basic Retirement Plan without taking into
                           account the limitations contained in the Plan
                           incorporating Sections 415 and 401(a)(17) of the
                           Code, minus the Basic Retirement Benefit.

                1.13       SURVIVING SPOUSE means an individual who is a
                           surviving spouse as described in the Basic
                           Retirement Plan.

                                       1-3

<PAGE>   7




                1.14       The masculine gender, where appearing in the Plan,
                           will be deemed to include the feminine gender, and
                           the singular may include the plural, unless the
                           context clearly indicates the contrary.

                1.15       Words and phrases used herein with initial capital
                           letters or quotation marks which are defined in the
                           Basic Retirement Plan are used herein as so defined.

                                       1-4

<PAGE>   8



                                   SECTION II
                                   ----------
                        SUPPLEMENTAL RESTORATION BENEFITS
                        ---------------------------------

                  2.1      Subject to the other terms and conditions of this
                           Plan, the Company shall pay:

                           (a)      a Supplemental Retirement Restoration
                                    Benefit to each Participant who is eligible
                                    under this Plan; and

                           (b)      a Supplemental Death Restoration Benefit to
                                    the Surviving Spouse or Beneficiary, as
                                    applicable, of such a Participant.


                                       2-1

<PAGE>   9



                                  SECTION III
                                  -----------
                              PAYMENT OF BENEFITS
                              -------------------

                  3.1      UPON RETIREMENT

                           (a)      The Supplemental Retirement Restoration
                                    Benefit shall be payable to a Participant
                                    within a reasonable time after the
                                    Participant's retirement under the Basic
                                    Retirement Plan on or after his completion
                                    of five (5) years of vesting service and his
                                    attainment of age fifty-five (55).

                           (b)      Except as set forth below in Section 3.2, no
                                    benefit shall be payable to a Participant
                                    from this Plan unless a Participant has
                                    completed at least five (5) years of vesting
                                    service and has attained at least age
                                    fifty-five (55). In the event that a
                                    Participant has a termination of employment
                                    before the date on which he has completed
                                    five (5) years of vesting service and has
                                    attained age fifty-five (55), the retirement
                                    benefit payable under this Section 3.1 shall
                                    be forfeited and the Participant shall not
                                    be entitled to receive payment of any
                                    benefit whatsoever under this Plan.


                                       3-1

<PAGE>   10



                  3.2      UPON DEATH

                           (a)      The Supplemental Death Restoration Benefit
                                    shall be payable to the Participant's
                                    Surviving Spouse within a reasonable time
                                    after the death of a Participant who had not
                                    yet retired under the Basic Retirement Plan,
                                    or who had terminated employment on or after
                                    his completion of five (5) years of vesting
                                    service and his attainment of age fifty-five
                                    (55) and been eligible for a future
                                    retirement benefit under the Basic
                                    Retirement Plan, but died prior to the
                                    payment or commencement of payment thereof.

                           (b)      The Supplemental Death Restoration Benefit
                                    shall be payable to the Participant's
                                    Beneficiary within a reasonable time after
                                    the death of a Participant who had completed
                                    twenty (20) years of vesting service and had
                                    attained age sixty (60) but who had not yet
                                    retired under the Basic Retirement Plan or
                                    who had terminated employment on or after
                                    his completion of twenty (20) years of
                                    vesting service and attainment of age sixty
                                    (60) and been eligible for a future
                                    retirement benefit under the Basic
                                    Retirement Plan, but died

                                       3-2

<PAGE>   11



                                    prior to the payment or commencement of
                                    payment thereof.

                           (c)      Except as provided in paragraph (b) above,
                                    if a Participant has no Surviving Spouse at
                                    the time of his death, no Supplemental Death
                                    Restoration Benefit will be payable on his
                                    behalf.

                  3.3      LUMP SUM PAYMENT
                           The Supplemental Retirement Restoration Benefit or
                           the Supplemental Death Restoration Benefit shall be
                           payable in the form of a lump sum using the actuarial
                           assumptions set forth in the Basic Retirement Plan.


                                       3-3

<PAGE>   12



                                   SECTION IV
                                   ----------
                                  MISCELLANEOUS
                                  -------------

                  4.1      ADMINISTRATION. The operation of this Plan, in
                           respect of the Participants and their Surviving
                           Spouses and Beneficiaries, shall be administered by
                           the Administrator. The Administrator shall have the
                           same type and extent of authority to administer this
                           Plan and to make, amend and interpret all appropriate
                           rules and regulations for the administration of this
                           Plan as said Administrator has in respect of the
                           Basic Retirement Plan. Any determination of the
                           Administrator in respect of this Plan shall be final,
                           conclusive and binding on the Company, any
                           Participant, and his Surviving Spouse and any
                           Beneficiaries. Except as set forth herein, benefits
                           payable under this Plan shall be processed pursuant
                           to and shall be subject to the rules set forth in the
                           Basic Retirement Plan with respect to administrative
                           procedures including but not limited to the
                           administrative appeal procedures in the event a
                           benefit is denied hereunder.

                  4.2      TERMINATION.  This Plan may be terminated at any
                           time by the Board of Directors of the Company, in
                           which event the rights of Participants to their

                                       4-1

<PAGE>   13



                           accrued Supplemental Restoration Benefits established
                           under this Plan shall become nonforfeitable. Unless
                           the Board of Directors of the Company takes specific
                           action to continue this Plan, the Plan shall
                           automatically terminate on the same date that benefit
                           accruals cease under the Basic Retirement Plan. In
                           the event of termination of this Plan, the Company
                           shall remain obligated to pay benefits to those
                           employees who are Participants on the date of such
                           termination to the extent and on the same date as
                           such benefits would otherwise be payable under this
                           Plan as if it had not been terminated; provided,
                           however, that solely for the purpose of determining
                           the amount of the benefit payable to such
                           Participants upon actual retirement, such
                           Participants shall be deemed to have retired on the
                           date of such termination of this Plan.
                           Notwithstanding the above, the Company, in its sole
                           discretion, may, in lieu of making a future benefit
                           payment, make payment to any Participant on any date
                           before the payment date otherwise provided for under
                           this Plan.

                  4.3      NONASSIGNABILITY.  The right to receive any benefit
                           under this Plan may not be anticipated, alienated,
                           sold, transferred, assigned, pledged, encumbered or

                                       4-2

<PAGE>   14



                           subjected to any charge or legal process, and if any
                           attempt is made to do so, or a person eligible for
                           any benefit hereunder becomes bankrupt, the interest
                           hereunder of the person affected may be terminated by
                           the Company, and the Company may cause the same to be
                           held or applied for the benefit of such person or his
                           or her dependents in such manner as it deems proper.

                  4.4      RIGHTS. Nothing in this Plan shall be construed as
                           giving any employee the right to be retained in the
                           employ of the Company. The Company expressly reserves
                           the right to dismiss any employee at any time without
                           regard to the effect which such dismissal might have
                           upon him under the Plan. This Plan is not, and is not
                           to be construed as a contract of employment. Nothing
                           contained herein shall give or shall be construed to
                           give any Participant any right to continue in the
                           employ of the Company or to otherwise enlarge or
                           affect employment status or rights.

                  4.5      AMENDMENT.  This Plan may be amended at any time by
                           the Board of Directors of the Company, except that
                           no such amendment shall deprive any Participant of

                                       4-3

<PAGE>   15



                           his Supplemental Restoration Benefit accrued at the
                           time of such amendment.

                  4.6      FUNDING.  Benefits payable under this Plan shall
                           not be funded and payments shall be made out of the
                           general funds of the Company.

                  4.7      ACTUARY.  An actuary may be employed to advise the
                           Company and the Administrator as to the actuarial
                           matters relating to this Plan.

                  4.8      NATURE OF THIS PLAN. This Plan is not intended to be
                           a qualified pension plan or to be a benefit or
                           welfare plan subject to ERISA. Benefits payable
                           hereunder shall be a general, unsecured obligation to
                           be paid by the Company from its own funds, and no
                           liability for payments hereunder shall be imposed
                           upon any officer, director, employee or stockholder
                           of the Company. The adoption of this Plan and the
                           setting aside of any funds by the Company with which
                           to discharge its obligations hereunder shall not be
                           deemed to create a trust. Legal and equitable title
                           in any funds so set aside shall remain in the
                           Company, and no recipient of benefits hereunder shall
                           have any security or other interest in such funds.
                           Any and all such funds so

                                       4-4

<PAGE>   16



                           set aside shall remain subject to the claims of the
                           general creditors of the Company. Nothing herein
                           shall require the Company to set aside any funds for
                           purposes of this Plan, but the Company may do so if
                           it chooses.

                  4.9      EFFECT ON QUALIFIED PLAN.  The adoption,
                           administration, amendment or termination of the
                           Plan shall have no effect on the Basic Retirement
                           Plan.

                4.10       BINDING EFFECT.  This Plan shall be binding upon
                           and inure to the benefit of the Company, its
                           successors and assigns, and the Participants, their
                           heirs and legal representatives.

                4.11       PRIOR PLANS.  This Plan shall supersede any and all
                           other plans or agreements between the Company and
                           Participants hereunder relating to the provision of
                           supplemental retirement benefits or deferred
                           compensation.

                                       4-5

<PAGE>   17


                                    SECTION V
                                    ---------
                                 EFFECTIVE DATE
                                 --------------

                  5.1      This Plan shall be construed, administered and
                           enforced according to the laws of the State of
                           Ohio.

                  5.2      This Plan is effective January 1, 1991.

                  IN WITNESS WHEREOF, the Company has executed this document
this 1st day of January, 1991.

                                       RPM, INC.


                                       By: /s/ Thomas C. Sullivan
                                          __________________________
                                          Chairman of the Board


                                       And: /s/ Richard E. Klar
                                            _________________________
                                            Vice President, Treasurer




                                       5-1




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>8
<FILENAME>l89965aex10-10.txt
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
<PAGE>   1
                                                                  Exhibit 10.10


                     RPM, INC. INCENTIVE COMPENSATION PLAN


                SECTION 1.  PURPOSE.  The purpose of the RPM, Inc. Incentive
Compensation Plan  (the  "Plan")  is to provide incentives for
specified key employees whose performance in fulfilling the
responsibilities of their positions can have a major impact on the
profitability and future growth of RPM, Inc. (the "Company") and
its subsidiaries.

                SECTION 2.  DEFINITIONS.  For the purposes of the Plan, the
        following terms shall have the meanings indicated:

                     (a) "Aggregate Bonus Pool" shall mean with respect to any
                Fiscal Year an amount equal to one and three-tenths percent
                (1.3%) of the Income Before Income Taxes.

                     (b) "Applicable Law" shall mean 26 U.S.C. section 162(m)
                and regulations and rulings lawfully promulgated thereunder by
                an agency of the federal government.

                     (c) "Base Salary" shall mean for any Covered Employee in
                respect of any Fiscal Year the base salary the Covered Employee
                receives from the Company for such Fiscal Year.

                     (d) "Board of Directors"  shall mean the Board of
                Directors of the Company.

                     (e) "Bonus Award" shall mean the amount payable to a
                Covered Employee under the Plan in respect of any Fiscal Year.

                     (f) "Committee" shall mean the Compensation Committee of
                the Board of Directors, which shall be comprised solely of two
                or more Outside Directors.

<PAGE>   2


                     (g) "Covered Employee" shall mean in respect of any
                Fiscal Year one of the five individuals who is a covered
                employee under the Applicable Law.

                     (h) "Fiscal Year" shall mean any fiscal year of the
                Company, commencing with the Fiscal Year which began on June 1,
                1995.

                     (i) "Income Before Income Taxes" shall mean, for any Fiscal
                Year, income before income taxes as shown on the Company's
                financial statement as certified by the Company's independent
                certified public accountants.

                     (j) "Outside Director" shall mean an outside director
                under the Applicable Law.

                     (k) "Plan"  shall  mean  the  RPM, Inc. Incentive
                Compensation Plan as set forth in this document and as later
                amended in accordance with the terms hereof.

                SECTION 3.  ADMINISTRATION.

                (a) COMMITTEE. The Plan shall be administered by the Committee.
The Committee shall have full authority to interpret the Plan and from time to
time to adopt such rules and regulations for carrying out the Plan as it may
deem best.

                (b) COMMITTEE DETERMINATIONS. All determinations by the
Committee shall be made by the affirmative vote of a majority of its members,
but any determination reduced to writing and signed by all of its members shall
be fully as effective as if it had been made by a majority vote at a meeting
duly called and held. All decisions by the Committee pursuant to the provisions
of the Plan and all orders or resolutions of the Committee pursuant thereto
shall be final, conclusive and binding on all persons, including


                                       2
<PAGE>   3

the Covered Employees (and their heirs, personal representatives, successors or
permitted assigns), the Company, its subsidiaries, and its shareholders.

                SECTION 4.  BONUS AWARDS.

                (a) DETERMINATION OF BONUS AWARDS. Subject to the next sentence,
the Bonus Award of any Covered Employee for any Fiscal Year shall be such
percentage share of the Aggregate Bonus Pool as determined by resolution of the
Committee adopted no later than the ninetieth day of such Fiscal Year.
Notwithstanding the preceding sentence:

                  (i)      the sum of the Bonus Awards of all Covered Employees
                           for any Fiscal Year shall not exceed the Aggregate
                           Bonus Pool for the Fiscal Year;

                  (ii)     the Bonus Award of any Covered Employee may be less
                           than the amount otherwise determined pursuant to the
                           preceding sentence if, at any time prior to informing
                           the Covered Employee of his Bonus Award, the
                           Committee in its sole and absolute discretion so
                           determines; and

                  (iii)    in no event shall a Bonus Award exceed $1,500,000.

                (b) ANNOUNCEMENT OF BONUS AWARDS. No later than ninety days
after the close of a Fiscal Year, the Committee shall promptly inform each
Covered Employee of his or her respective Bonus Award for the Fiscal Year.

                (c) PAYMENT OF BONUS AWARDS.  Bonus Awards shall be paid to
the Covered Employees at such times as are determined by the Committee.


                                       3
<PAGE>   4

                (d) CERTIFICATION OF BONUS AWARDS. Prior to paying any Bonus
Award in respect of any Fiscal Year, the Committee shall certify in writing to
the Board of Directors the amount of such Bonus Award and that such Bonus Award
was determined in accordance with the terms of the Plan. For this purpose,
approved minutes of the Committee meeting in which the certification is made
shall be treated as a written certification.

                SECTION 5. EFFECTIVE DATE AND SHAREHOLDER APPROVAL. The Plan
shall become effective for the Fiscal Year commencing on June 1, 1995; PROVIDED,
however, that the Plan shall be of no force and effect unless it is approved by
the Company's shareholders as provided in the Applicable Law at the Company's
1995 annual meeting of shareholders.

                SECTION 6. GENERAL PROVISIONS.

                (a) NO ASSIGNMENT.  No portion of any Bonus Award may be
assigned or transferred otherwise than by will or by the laws of
descent and distribution prior to the payment thereof.

                (b) TAX REQUIREMENTS.  All payments of Bonus Awards shall be
subject to withholding in respect of income and other taxes
required by law to be withheld, in accordance with the Company's
customary procedures.

                (c) NO ADDITIONAL RIGHTS. A Covered Employee shall not have any
right to be retained in the employ of the Company or any of its subsidiaries,
and the right of the Company or any such subsidiary to dismiss or discharge any
such Covered Employee or to terminate any arrangement pursuant to which any such
Covered Employee provides services to the Company or a subsidiary is
specifically reserved.

                                       4
<PAGE>   5

                (d) LIABILITY. The Board of Directors and the Committee shall be
entitled to rely on the advice of counsel and other experts, including the
independent certified public accountants for the Company. No member of the Board
of Directors or of the Committee or any officers of the Company or its
subsidiaries shall be liable for any act or failure to act under the Plan,
except in circumstances involving bad faith on the part of such member or
officer.

                (e) OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the
Plan shall prevent the Company or any subsidiary or affiliate of the Company
from adopting or continuing in effect other compensation arrangements, which
arrangements may be either generally applicable or applicable only to designated
individuals including the Covered Employees.

                SECTION 7.  AMENDMENT AND TERMINATION OF THE PLAN.  The Board
of Directors may at any time terminate, in whole or in part, or
from time to time amend the Plan; PROVIDED, that no such amendment
or termination shall adversely affect the rights of any Covered
Employee with respect to Bonus Awards announced by the Committee.
The Board of Directors may at any time and from time to time
delegate to the Committee any or all of its authority under this
Section 7.  Any amendment to the Plan shall be approved by the
Company's shareholders if required under the Applicable Law.


                                       5

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>9
<FILENAME>l89965aex10-12.txt
<DESCRIPTION>EXHIBIT 10.12
<TEXT>
<PAGE>   1
                                                                Exhibit 10.12
                            INDEMNIFICATION AGREEMENT


                  THIS AGREEMENT is made to be effective the _____th day of
___________, _____ between RPM, Inc., an Ohio corporation ("Corporation"), and
________________________ ("Director").

                                 WITNESSETH THAT:

                  WHEREAS, Director is a director of Corporation and in
such capacity is performing a valuable service for Corporation and
its shareholders; and

                  WHEREAS, the shareholders of Corporation have adopted a Code
of Regulations (the "Regulations") providing for the indemnification of the
officers, directors, agents, trustees and employees of Corporation; and

                  WHEREAS, Section 1701.13(E) of the Ohio Revised Code (the
"Ohio Statute") also provides for the indemnification of directors, officers,
employees or agents of Corporation; and

                  WHEREAS, such Regulations (Article VI, Section 6) and the Ohio
Statute (1701.13(E)(6)) specifically provide that they are not exclusive, and
also specifically contemplate that agreements may be entered into between
Corporation and the members of its Board of Directors and officers with respect
to indemnification of such directors and officers; and

                  WHEREAS, in accordance with the authorization provided by the
Regulations (Article VI, Section 7) and the Ohio Statute (1701.13(E)(7)),
Corporation has purchased and presently maintains an Executive Liability and
Defense Coverage insurance policy ("D&O Insurance"), insuring Corporation and
its directors and officers against certain liabilities which may be incurred by
its directors and officers in the performance of their services for Corporation;
and

                  WHEREAS, recent developments with respect to the terms,
coverage and availability of director and officer insurance and with respect to
the application, amendment and enforcement of statutory and corporate
indemnification provisions generally have raised questions concerning the
adequacy and reliability of the protection afforded to directors and officers
thereby; and

                  WHEREAS, in order to resolve such questions and thereby induce
Director to continue to serve as a director of Corporation, Corporation has
determined and agreed to enter into this Agreement with Director;

                  NOW, THEREFORE, in consideration of Director's continued
service as a director after the date hereof, the mutual covenants herein
contained, and for other good and valuable consideration the receipt and
adequacy of which hereby is mutually acknowledged, the parties hereto agree as
follows:


<PAGE>   2




                  1. INDEMNITY OF DIRECTOR. Corporation hereby agrees to
indemnify and hold harmless Director from loss or liability, including any and
all fees and expenses (including attorneys' fees), judgments, fines, penalties
and amounts paid in settlement actually and reasonably incurred by Director or
his spouse in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, investigative or
otherwise (including specifically an action by or in the right of Corporation)
to which Director is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Director is, was or at any time becomes
a director, officer, employee or agent of Corporation, or is or was serving or
at any time serves at the request of Corporation as a director, officer,
employee, trustee, or agent of another corporation, partnership, joint venture,
trust or other enterprise, to the maximum extent now authorized or permitted by
the provisions of the Regulations and Ohio Statute, or by any subsequent
amendment(s) thereto or other Regulations or statutory provisions authorizing or
permitting such indemnification which are adopted after the date hereof by the
shareholders of Corporation or the State of Ohio, respectively. It is the intent
of this Agreement that the Director shall be fully and completely indemnified by
either Corporation or the D&O Insurance (or a combination thereof) to the
absolute maximum permitted by law and except to the extent absolutely prohibited
by law on the grounds of illegality as finally determined by a court of
competent jurisdiction after all presumptions are made in favor of the Director
and from which no appeal is or can be taken by Director.

                  2. MAINTENANCE OF INSURANCE AND SELF INSURANCE.

                  (a) Corporation represents that it presently has in force and
effect a policy of D&O Insurance, a copy of which has been delivered to
Director. Subject only to the provisions of Section 2(c) hereof, Corporation
hereby agrees that, so long as Director shall continue to serve as a director of
Corporation (or shall continue at the request of Corporation to serve as a
director, officer, employee, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and thereafter so long as
Director shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal or investigative
by reason of the fact that Director was a director of Corporation (or served in
any of said other capacities), Corporation will purchase and maintain in effect
for the benefit of Director one or more valid, binding and enforceable policy or
policies of director and officer insurance providing, in all respects, coverage
at least comparable to that presently provided pursuant to the D&O Insurance.

                  (b) The D&O Insurance currently contains deductible amounts
and certain exclusions. Therefore, Corporation shall indemnify and hold harmless
Director with respect to the following:


                                        2

<PAGE>   3



                           (i) any deductible amount set forth in the D&O
                  Insurance, or any similar deductible amount in any
                  replacement director and officer insurance policy; and

                           (ii) any loss to or liability of Director by reason
                  of any Exclusions set forth in, or any of the Endorsements to,
                  the D&O Insurance, except for liabilities arising from
                  Director's intentional fraud, actual dishonesty, or willful
                  misconduct as finally determined by a court of competent
                  jurisdiction, and except for claims under Section 16(b) of the
                  Securities Exchange Act of 1934 for so-called six (6) months
                  "short swing profits".

                  (c) Corporation shall not be required to maintain the D&O
Insurance or other director and officer insurance if said insurance is not
reasonably available or if, in the reasonable business judgment of the then
directors of Corporation, either (i) the premium cost for such insurance is
substantially disproportionate to the amount of coverage or (ii) the coverage
provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance.

                  3. ADDITIONAL INDEMNITY. "Loss to or liability of Director" as
used in this Agreement shall include any and all fees and expenses (including
attorneys' fees), judgments, fines, penalties and amounts paid in settlement
actually and reasonably incurred by Director or his spouse in connection with
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise (including specifically an
action by or in the right of Corporation) to which Director is, was or at any
time becomes a party, or is threatened to be made a party, by reason of the fact
that Director is, was or at any time becomes a director, officer, employee or
agent of Corporation, or is or was serving or at any time serves at the request
of Corporation as a director, officer, employee, trustee, or agent of another
corporation, partnership, joint venture, trust or other enterprise.

                  4. LIMITATION ON INDEMNITY.

                  (a) Notwithstanding anything contained herein to the contrary,
except as is provided in Section 8 hereof, Corporation shall not be required
hereby to indemnify Director with respect to any action, suit, or proceeding
against Corporation that was initiated, directly or indirectly, by Director.

                  (b) Corporation shall not be liable under this Agreement to
make any payment in connection with any claim made against Director to the
extent Director has actually received payment (under any insurance policy, the
Regulations, the Ohio Statute, or otherwise) of the amounts otherwise payable
hereunder.

                  5. CONTINUATION OF INDEMNITY. All agreements and obligations
of Corporation contained herein shall continue during

                                        3

<PAGE>   4



the period Director is a director, officer, employee or agent of Corporation (or
is or was serving at the request of Corporation as a director, officer,
employee, trustee, or agent or another corporation, partnership, joint venture,
trust or other enterprise) and shall continue thereafter so long as Director
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether, civil, criminal, investigative or
otherwise, by reason of the fact that Director was a director of Corporation or
serving in any other capacity referred to herein.

                  6. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt
by Director of notice of the commencement of any action, suit or proceeding,
Director will, if a claim in respect thereof is to be made against Corporation
under this Agreement, notify Corporation in writing of the commencement thereof;
but the omission so to notify Corporation will not relieve it from any liability
which it may have to Director otherwise than under this Agreement. With respect
to any such action, suit or proceeding as to which Director notifies Corporation
of the commencement thereof:

                  (a) Corporation will be entitled to participate therein at its
own expense;

                  (b) Except as otherwise provided below, to the extent that it
may wish, Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
satisfactory to Director. After notice from Corporation to Director of its
election so to assume the defense thereof, Corporation will not be liable to
Director under this Agreement for any legal or other expenses subsequently
incurred by Director in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. Director shall
have the right to employ his own counsel in such action, suit or proceeding but
the fees and expenses of such counsel incurred after notice from Corporation of
its assumption of the defense thereof shall be at the expense of Director unless
(i) the employment of counsel by Director has been authorized by Corporation,
(ii) Director shall have reasonably concluded that there may be a conflict of
interest between Corporation and Director in the conduct of such defense of such
action, or (iii) Corporation shall not in fact have employed counsel to assume
the defense of such action, in each of which cases the fees and expenses of
counsel shall be at the expense of Corporation. Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above;

                  (c) Corporation shall not be liable to indemnify Director
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. Corporation shall not settle any action or
claim in any manner which would impose any penalty or limitation on Director
without Director's written consent. Neither Corporation or Director will
unreasonably withhold consent to any proposed settlement; and

                                        4

<PAGE>   5




                  (d) Director will reasonably cooperate with Corporation with
respect to the defense of any action, suit or proceeding in connection with
which Director is seeking to be indemnified and held harmless by Corporation.

                  7. PAYMENT AND REPAYMENT OF EXPENSES.

                  (a) At Director's request, Corporation shall pay all expenses
as and when incurred by Director after receipt of written notice pursuant to
Section 6 hereof. That portion of the expenses which represents attorneys' fees
and other costs incurred in defending any civil or criminal action, suit or
proceeding shall be paid by Corporation to Director, or at his direction
directly to his attorneys, within 30 days of Corporation's receipt of such
request, together with reasonable documentation evidencing the amount and nature
of such expenses.

                  (b) Director agrees that he will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
that it shall be finally determined by a court of competent jurisdiction from
which no appeal is or can be taken by Director that he is not entitled to be
indemnified by Corporation for such expenses under the provisions of the Ohio
Statute, the Regulations, this Agreement or otherwise.

                  8. ENFORCEMENT.

                  (a) Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on Corporation
hereby in order to induce Director to continue as a director of Corporation, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.

                  (b) In the event any dispute or controversy shall arise under
this Agreement between Director and Corporation with respect to whether the
Director is entitled to indemnification hereunder, Director may seek to enforce
this Agreement with respect to such dispute or controversy through legal action
or, at Director's sole option and written request, through arbitration. If
arbitration is requested, such dispute or controversy shall be submitted by the
parties to binding arbitration in the City of Cleveland, State of Ohio, before a
single arbitrator agreeable to both parties. If the parties cannot agree on a
designated arbitrator within 15 days after arbitration is requested in writing
by Director, the arbitration shall proceed in the City of Cleveland, State of
Ohio, before an arbitrator appointed by the American Arbitration Association. In
either case, the arbitration proceeding shall commence promptly under the rules
then in effect of that Association and the arbitrator agreed to by the parties
or appointed by that Association shall be an attorney other than an attorney who
has, or is associated with a firm having associated with it an attorney which
has been retained by or performed services for Corporation or Director at any
time during the five years preceding the commencement of the arbitration. The
award

                                        5

<PAGE>   6



shall be rendered in such form that judgment may be entered thereon in any court
having jurisdiction thereof.

                  (c) In the event Director is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is successful
in such action, Corporation shall reimburse Director for all of Director's
reasonable fees and expenses (including attorneys' fees) in bringing and
pursuing such action.

                  (d) Corporation is aware that upon the occurrence of a Change
in Control (as defined in paragraph 8(e) below) the Board of Directors or a
shareholder of Corporation may then cause or attempt to cause Corporation to
refuse to comply with its obligations under this Agreement or may cause or
attempt to cause Corporation to institute, or may institute, litigation seeking
to have this Agreement declared unenforceable, or may take, or attempt to take,
other action to deny Director the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be frustrated. It is
the intent of Corporation that Director 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 Director hereunder, nor be
bound to negotiate any settlement of his rights hereunder under threat of
incurring such expenses. Accordingly, if following a Change in Control it should
appear to Director that Corporation has failed to comply with any of its
obligations under this Agreement or in the event that Corporation or any person
takes any action to declare this Agreement void or unenforceable, or institutes
any litigation or other legal action designed to deny, diminish or to recover
from, Director the benefits intended to be provided to Director hereunder, and
that Director has complied with all of his obligations under this Agreement,
Corporation irrevocably authorizes Director from time to time to retain counsel
of his choice at the expense of Corporation as provided in this Section 8(d), to
represent Director in connection with the initiation or defense of any
litigation or other legal action, whether by or against Corporation or any
director, officer, shareholder or other person affiliated with Corporation, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between Corporation and such counsel, and in that connection
Corporation and Director agree that a confidential relationship shall exist
between Director and such counsel. The reasonable fees and expenses of counsel
selected from time to time by Director as hereinabove provided shall be paid or
reimbursed to Director by Corporation on a regular, periodic basis upon
presentation by Director of a statement or statements prepared by such counsel
in accordance with its customary practices, up to a maximum aggregate amount of
$500,000.

                  (e) For the purpose of this Agreement, the term "Change in
Control" shall mean a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated
under the Securities Act of 1934 as

                                        6

<PAGE>   7



in effect on the date of this Agreement; provided that, without limitation, such
a change in control shall be deemed to have occurred if and when (a) any
"person" (as such term is used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) is or becomes a beneficial owner, directly or indirectly,
of securities of Corporation representing 20% or more of the combined voting
power of Corporation's then outstanding securities or (b) during any period of
twelve (12) consecutive months, commencing before or after the date of this
Agreement, individuals who, at the beginning of such twelve (12) month period
were directors of Corporation for whom Director, as a shareholder, shall have
voted cease for any reason to constitute at least a majority of the Board of
Directors of Corporation.

                  9. SEVERABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid, illegal or unenforceable for any
reasons, such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of the other provisions hereof.

                  10. EXTRAORDINARY TRANSACTION. Corporation agrees that, in the
event of any merger, consolidation or reorganization in which Corporation is not
the surviving entity, any sale of all or substantially all of the assets of
Corporation or any liquidation of Corporation (each such event is hereinafter
referred to as an "extraordinary transaction"), Corporation shall:

                  (a) Have the obligations of Corporation under this Agreement
expressly assumed by the survivor, purchaser or successor, as the case may be,
in such extraordinary transaction; or

                  (b) Provide a trust fund, letter of credit, or otherwise
provide for the satisfaction of Corporation's obligations under this Agreement
in a manner reasonably acceptable to Director.

                  11. NO PERSONAL LIABILITY. Director agrees that no director,
officer, employee, representative or agent of Corporation shall be personally
liable for the satisfaction of Corporation's obligations under this Agreement,
and Director shall look solely to the assets of Corporation and any director and
officer insurance referred to in Section 2 hereof for satisfaction of any claims
hereunder.

                  12. ALLOWANCE FOR COMPLIANCE WITH SEC REQUIREMENTS. Director
acknowledges that the Securities and Exchange Commission ("SEC") has expressed
the opinion that indemnification of directors and officers from liabilities
under the Securities Act of 1933 ("Act") is against public policy as expressed
in the Act and, is therefore, unenforceable. Director hereby agrees that it will
not be a breach of this Agreement for Corporation to undertake with the
Commission in connection with the registration for sale of any stock or other
securities of Corporation from time to time that, in the event a claim for
indemnification against such liabilities

                                        7

<PAGE>   8



(other than the payment by Corporation of expenses incurred or paid by a
director or officer of Corporation in the successful defense of any action, suit
or proceeding) is asserted in connection with such stock or other securities
being registered, Corporation will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of competent
jurisdiction on the questions of whether or not such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue. Director further agrees that such submission to a
court of competent jurisdiction shall not be a breach of this Agreement.

                  13. SUBROGATION. This Agreement is separate and distinct from
the D&O Insurance, and nothing contained herein shall diminish or otherwise
modify Director's separate and distinct rights and obligations thereunder.
However, in the event of any payment under this Agreement, Corporation shall be
subrogated to the extent thereof to all rights to indemnification or
reimbursement against any insurer or other entity or person vested in Director,
who shall execute all instruments and take all other actions as shall be
reasonably necessary for Corporation to enforce such rights.

                  14. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION.

                  (a) This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Ohio.

                  (b) This Agreement shall be binding upon Director and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Director, his heirs, personal representatives and assigns and to the benefit of
Corporation, its successors and assigns.

                  (c) No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by both parties
hereto. Any amendment or modification of this Agreement which is approved in
good faith by the Board of Directors of Corporation need not be submitted to the
shareholders for subsequent approval or ratification.


                                        8

<PAGE>   9


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

                                          RPM, INC.


                                        By:
                                            -----------------------------
                                            Thomas C. Sullivan
                                            Chairman of the Board and
                                            Chief Executive Officer



                                          _______________________________
                                          _____________________, Director




                                        9


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11.1
<SEQUENCE>10
<FILENAME>l89965aex11-1.txt
<DESCRIPTION>EXHIBIT 11.1
<TEXT>
<PAGE>   1
                           RPM, INC. AND SUBSIDIARIES
                           --------------------------
               CONSOLIDATED STATEMENTS OF COMPUTATIONS OF EARNINGS
               ---------------------------------------------------
                  PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
                  ---------------------------------------------

                                                                    EXHIBIT 11.1
                                                                    ------------

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                               Year Ended May 31
                                                           --------------------------------------------------------
                                                                  2001                 2000               1999
                                                           -------------------   -----------------   --------------
<S>                                                         <C>                  <C>                 <C>
NET INCOME
     Net income applicable to common shares for basic
         earnings per share                                 $        62,961      $       40,992      $       94,546
           Add back interest net of tax on convertible
           securities assumed to be converted                                                                 1,005
                                                            ---------------      --------------      --------------
     Net income applicable to common shares for diluted
         earnings                                           $        62,961      $       40,992      $       95,551
                                                            ===============      ==============      ==============
SHARES OUTSTANDING
     Weighted average shares for basic
       earnings per share                                           102,202             107,221             108,731

     Net issuable common share equivalents                               10                 163                 567

     Additional shares issuable assuming
       conversion of convertible securities                                                                   2,078
                                                            ---------------      --------------      --------------

         Total shares for diluted earnings per
           share                                            $       102,212      $      107,384      $      111,376
                                                            ===============      ==============      ==============

Basic Earnings Per Common Share                             $           .62      $          .38      $          .87
                                                            ===============      ==============      ==============

Diluted Earnings Per Common Share                           $           .62      $          .38      $          .87
                                                            ===============      ==============      ==============
</TABLE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>11
<FILENAME>l89965aex13-1.txt
<DESCRIPTION>EXHIBIT 13.1
<TEXT>
<PAGE>   1
                                                                    Exhibit 13.1

MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

REPORTABLE SEGMENT AND
GEOGRAPHIC AREA INFORMATION
The Company has determined that it has two operating segments - Industrial and
Consumer - based on the nature of business activities, products and services;
the structure of management; and the structure of information as presented to
the Board of Directors. Within each division, individual operating companies or
groups of companies generally address common markets, utilize similar
technologies, and can share manufacturing or distribution capabilities. The
Company evaluates the profit performance of the two divisions based on earnings
before interest and taxes since interest expense is essentially related to
corporate acquisitions, as opposed to segment operations.

The Industrial Division has operations throughout North America and accounts for
most of the Company's sales in Europe, South America, Asia, South Africa,
Australia and the Middle East. The Industrial product line is primarily sold to
distributors, contractors and to end users, such as industrial manufacturing
facilities, educational and governmental institutions and commercial
establishments. Industrial Division products reach their markets through a
combination of direct sales, sales representative organizations, distributor
sales and sales of licensees and joint ventures.

The Consumer Division's products are sold throughout North America by mass
merchandisers, home centers, hardware stores, paint stores, automotive supply
stores and craft shops. Major customers include Ace Hardware Stores, Cotter &
Company, The Home Depot, Kmart, Lowe's Home Centers, Sherwin-Williams and
Wal-Mart. Consumer Division products are sold to retailers through a combination
of direct sales, sales representative organizations and distributor sales.

Sales to the seven largest customers represent approximately 19%, 16% and 12% of
consolidated net sales for the years ended May 31, 2001, 2000 and 1999,
respectively. These sales are predominantly within the Consumer Division and
comprise approximately 41%, 37% and 32% of the division's sales for the
respective periods.

In addition to the two operating segments, there are certain business
activities, referred to as Corporate/Other, that do not constitute an operating
segment, including corporate headquarters and related administrative expenses,
results of the Company's captive insurance company, gains or losses on the sales
of certain assets and other expenses not directly associated with either
operating segment. Related assets consist primarily of investments, prepaid
expenses, deferred pension assets, and headquarters property and equipment.
These corporate and other assets and expenses reconcile operating segment data
to total consolidated net sales, earnings before interest and taxes,
identifiable assets, capital expenditures, and depreciation and amortization, as
follows on page 7.

Sales for the years ended May 31, 2001, 2000 and 1999 do not include sales of
Company products by joint ventures and licensees, amounting to approximately
$37,000,000, $35,000,000, and $72,000,000, respectively. The Company reflects
income from joint ventures on the equity method and receives royalties from its
licensees. Export sales were less than 10% of net sales for each of the three
years presented.

6

<PAGE>   2


SEGMENT AND GEOGRAPHIC INFORMATION

<TABLE>
<CAPTION>
SEGMENT INFORMATION
- --------------------------------------------------------------------------------------------
(In thousands)
Year Ended May 31,                              2001            2000(1,2)          1999(2)
- --------------------------------------------------------------------------------------------
<S>                                         <C>              <C>              <C>
Net sales
     Industrial Division                    $ 1,100,682      $ 1,092,976      $ 1,062,785
     Consumer Division                          907,080          869,434          657,843
     Corporate/Other
- --------------------------------------------------------------------------------------------
         TOTAL                              $ 2,007,762      $ 1,962,410      $ 1,720,628
============================================================================================
Earnings before interest and taxes
     Industrial Division                    $   122,034      $    98,980      $   135,632
     Consumer Division                           62,662           47,907           71,294
     Corporate/Other                            (18,006)         (23,333)         (14,548)
- --------------------------------------------------------------------------------------------
         TOTAL                              $   166,690      $   123,554      $   192,378
============================================================================================
Identifiable assets
     Industrial Division                    $ 1,002,209      $   993,239      $ 1,102,531
     Consumer Division                        1,016,067        1,041,896          586,846
     Corporate/Other                             60,214           64,068           47,859
- --------------------------------------------------------------------------------------------
         TOTAL                              $ 2,078,490      $ 2,099,203      $ 1,737,236
============================================================================================
Capital expenditures
     Industrial Division                    $    30,123      $    34,331      $    35,779
     Consumer Division                           23,629           27,929           26,648
     Corporate/Other                                366              925              979
- --------------------------------------------------------------------------------------------
         TOTAL                              $    54,118      $    63,185      $    63,406
============================================================================================
Depreciation and amortization
     Industrial Division                    $    38,579      $    38,519      $    32,668
     Consumer Division                           41,627           39,862           28,387
     Corporate/Other                              1,288              769            1,080
- --------------------------------------------------------------------------------------------
         TOTAL                              $    81,494      $    79,150      $    62,135
============================================================================================
GEOGRAPHIC INFORMATION
(In thousands)
Year Ended May 31,                                 2001          2000(2)            1999(2)
- --------------------------------------------------------------------------------------------
Net sales (based on shipping locations)
     United States                          $ 1,614,112      $ 1,572,919      $ 1,362,722
- --------------------------------------------------------------------------------------------
     Foreign
       Canada                                   140,009          135,641          115,201
       Europe                                   164,517          172,662          171,825
       Other Foreign                             89,124           81,188           70,880
- --------------------------------------------------------------------------------------------

     Total Foreign                              393,650          389,491          357,906
- --------------------------------------------------------------------------------------------
           TOTAL                            $ 2,007,762      $ 1,962,410      $ 1,720,628
============================================================================================
Assets employed
     United States                          $ 1,732,238      $ 1,740,882      $ 1,445,599
- --------------------------------------------------------------------------------------------
     Foreign
       Canada                                   128,159          130,064           88,965
       Europe                                   144,619          155,330          144,636
       Other Foreign                             73,474           72,927           58,036
- --------------------------------------------------------------------------------------------
     Total Foreign                              346,252          358,321          291,637
- --------------------------------------------------------------------------------------------
           TOTAL                            $ 2,078,490      $ 2,099,203      $ 1,737,236
============================================================================================
</TABLE>

(1)  Includes restructuring and asset impairment charges and related costs
     totaling $59.8 million, before taxes.
(2)  Net sales for fiscal years 1999-2000 have been restated for the prescribed
     accounting changes adopted in the 2001 fiscal year (see Note A [16] to
     Consolidated Financial Statements).

                                                                               7
<PAGE>   3

RESULTS OF OPERATIONS

FISCAL 2001 COMPARED TO FISCAL 2000
Fiscal 2001 net sales were ahead of fiscal 2000 by $45 million, or 2%, resulting
in the 54th consecutive year of business growth for RPM.

On August 3, 1999, RPM acquired DAP Products Inc. and DAP Canada Corp.
(collectively "DAP"). DAP, with annual sales of approximately $220 million, is a
leading manufacturer and marketer of caulks and sealants, spackling and glazing
compounds, contact cements, and other specialty adhesives. Brand names DAP, Alex
Plus and Kwik Seal are well known throughout the U.S. and Canada.

On a consolidated basis, the extra two months of DAP sales this year, reported
within the Consumer Division, offset the loss of sales from Industrial Division
product lines divested during fiscal 2000. On a segment basis, comparable base
sales, including small product line additions, grew by 4% in the Industrial
Division, while base sales in the Consumer Division were flat year-over-year.
The Industrial growth of 4% reflects a combination of greater unit volume [2-3%]
and higher pricing [1-2%] to counter increased raw material and packaging costs
during the year. In addition, foreign exchange differences had a negative impact
on primarily Industrial sales between years, suppressing sales by approximately
$20 million, or 1%.

The general slowdown in the economy impacted sales in both divisions during the
past year, causing spending in areas such as protective maintenance, which our
products and services provide, to be deferred. The severe cold this past winter
extended much further south than usual, and Europe was hit hard as well, causing
sales to those regions to be much weaker than usual during our fiscal third
quarter, the seasonally slowest time of the year. Furthermore, several of the
Consumer Division's major accounts were aggressively de-stocking their
inventories this past year, especially impacting sales to those accounts during
the months of December and March. It is management's view that this de-stocking
activity is now largely completed and that sales to these accounts will
normalize, all other factors being equal, as we progress through 2002.

Gross profit margin this year of 43.8% matches closely with last year's 44%. The
Industrial Division margin improved to 46.4% from 45.7%, from the divested
product lines during fiscal 2000, which carried lower margins and, to a lesser
extent, the leveraged benefits from higher sales volume. Timely pricing
initiatives in this division successfully offset rising material costs,
principally oil-related, during the year, and these material costs now appear to
have stabilized. The Consumer Division gross margin, in contrast, dipped to
40.7% from 41.8%, reflecting principally this division's less timely ability to
gain price relief during periods of rising material costs, typically having
servicing agreements with their accounts that renew annually. As these
agreements are being renewed, pricing relief is generally being successfully
negotiated. There were also two more months of lower-margin DAP this year than
last in this division, as well as premium costs incurred to outsource certain
products in order to seamlessly service customers during brief periods of
insufficient capacity during information systems conversions. During 2000, this
division had incurred $7 million in inventory discontinuation costs associated
with the comprehensive restructuring program initiated in August 1999.

Selling, general and administrative ("SG&A") expenses amounted to 35.5% of sales
this year, compared with 35% last year. The Industrial Division expenses
increased to 35.3% from 34.7% a year ago, mainly as the divested product lines
during fiscal 2000 had carried relatively much lower SG&A expenses, plus
additional, related costs of approximately $3 million were incurred this year
toward completion of the restructuring program. The Consumer Division expenses
increased to 33.8% from


8
<PAGE>   4

33.4%, principally from incurring approximately $5 million in additional costs
related to the restructuring program, tempered slightly by two more months of
DAP, with its comparatively lower SG&A expense structure. This division also
incurred higher freight costs in the form of oil-driven fuel surcharges,
premiums to expedite certain shipments during restructuring, and increased
handling costs to service more frequent shipments. Additional costs related to
the conclusion of the restructuring program initiated during 2000 are scheduled
to be fully incurred by the end of calendar 2001, and will be much lower than
those incurred during fiscal 2001.

Industrial and Consumer Division 2001 earnings before interest and taxes (EBIT)
were both well ahead of their reported EBIT for 2000. Excluding the
restructuring and asset impairment charges and all related costs from 2000,
totaling $59.8 million, pro forma EBIT results [000s] for Industrial, Consumer
and Corporate/Other were $121,312; $79,761; and ($17,672), respectively, or
$183,401 in total. On that basis, Industrial EBIT year-over-year appears flat
[$122,034 vs. $121,312], but considering the loss of EBIT from the divestitures
during 2000 and the additional $3 million spent this year toward completion of
the restructuring program, Industrial EBIT during 2001 would have been $7
million ahead of 2000, or up 6% on the 4% higher sales. On the same pro forma
basis, Consumer EBIT was off $17 million [$62,662 vs. $79,761], or 21%, for the
reasons discussed above. Lastly, on the same pro forma basis, Corporate/Other
costs were flat year-over-year [($18,006) vs. ($17,672)] as certain lower costs
offset higher costs for e-commerce infrastructure development, which is now
completed.

In August 1999, the Company announced a comprehensive restructuring program to
generate manufacturing, distribution and administrative efficiencies, and to
better position the Company for increased profitability and long-term growth.
Pre-tax restructuring and asset impairment charges of $45 million and $7 million
were taken during the first and fourth quarters of fiscal 2000, respectively.
Through year-end 2001, the Company had incurred all of these charges (refer to
Note I to the Consolidated Financial Statements).

Net interest expense increased $13.4 million in 2001 (refer to Note A [12]),
reflecting higher average interest rates, year-over-year, on the variable rate
portion (approximately 80%) of outstanding borrowings (refer to Note B), two
additional months of indebtedness related to the August 1999 DAP acquisition,
and higher average indebtedness associated with the repurchase of 8,970,100 RPM
common shares between January 1999 and July 2000 (refer to Note D). The Federal
Reserve Board cuts in interest rates that began early in calendar 2001 are now
translating into lower rates on the variable portions of the Company's
outstanding borrowings, resulting in comparably lower interest costs.

The effective income tax rate this year of 38% compares favorably with last
year's 42.9% rate. The 2000 rate had been impacted by the restructuring and
asset impairment charges plus related costs that year. Excluding those charges
and costs, the pro forma tax rate for 2000 would have been 40.3%, still higher
than this year's 38%. This year's rate reduction mainly reflects an improved mix
of foreign income, including fewer unusable foreign tax losses this year than
last, which management expects will be sustainable.

This year's net income of $63 million, or $.62 per diluted share, compares
favorably with last year's $41 million, or $.38 per diluted share. Excluding the
$59.8 million pre-tax restructuring and asset impairment charges plus related
costs, pro forma net income for 2000 would have been $78.6 million, or $.73 per
diluted share. Against pro forma 2000, 2001 net income and EPS are off 20% and
15%, respectively, as a result of the factors


                                                                               9
<PAGE>   5

discussed above. In addition, the difference in pro forma decline year-over-year
between net income and EPS reflects the net benefit from the shares repurchased,
which added $.01 per diluted share to 2001 results.

FISCAL 2000 COMPARED TO FISCAL 1999
Fiscal 2000 net sales were ahead of fiscal 1999 by $241.2 million, or 14%,
representing the 53rd consecutive year of business growth for RPM. The vast
majority of this increase came as a net result of the August 1999 DAP
acquisition plus several product line additions, net of divestitures. DAP
accounted for the majority of the year 2000 sales increase, adjusted for
divestitures during 2000 and for unfavorable foreign exchange differences from
year-to-year. Growth within the Industrial and Consumer Divisions' base
businesses, before acquisitions, divestitures, and exchange differences,
amounted to approximately 3% and 4%, respectively. These growth rates included
several product line additions and are generally reflective of real unit volume
increases, as price levels year-to-year remained fairly stable.

Gross profit margin in 2000 declined 2.1%, ending at 44%, compared to 1999's
46.1% performance. The Industrial Division margin of 45.7% compared with 46.5%
in 1999. The key influence to this change was the difficulties experienced in
reorganizing to combine certain businesses, most notably outside the U.S.
Additionally, there were sales mix differences and minor raw material price
increases during 2000. Management believes that such cost increases can be
effectively managed, prospectively, as productive activities of its Purchasing
Action Group continue. This group focuses on purchasing major common raw and
packaging materials used across multiple business units, and will continue its
effort to identify and expand into other select procurement opportunities going
forward. The Consumer Division year 2000 margin of 41.8% compared with 45.5%
1999.

The majority of this margin reduction resulted from the DAP acquisition. DAP's
entire cost structure generally differs among the Consumer Division companies,
having much lower gross margins, but requiring lower support levels in the SG&A
expense areas. The Consumer Division also incurred $7 million in inventory
discontinuation costs during 2000 associated with the restructuring program. In
addition, the Consumer Division experienced raw material cost movements similar
to those described for the Industrial Division.

SG&A expenses were essentially unchanged from 1999 to 2000 as a percentage of
sales, ending both years at the 35% level. Industrial and Consumer expenses
amounted to 34.7% and 33.4% in 2000 compared with 33.7% and 34.7%, respectively,
in 1999. The Industrial Division increase was almost totally driven by the
divestiture of business units, which carried much lower SG&A expense levels.
Conversely, the Consumer Division, spending difference was the result of the
lower SG&A structure of DAP.

Excluding the restructuring and asset impairment charges of $52 million, and the
related $7.9 million of additional cost of sales, EBIT amounted to $183.4
million in fiscal 2000 (see above), compared with $192.4 million in fiscal 1999.
As set forth, within the Industrial Division, the earnings benefits of modest
volume increases were principally offset by costs incurred in reorganizing to
combine certain businesses and other cost increases not recovered by price
increases. The Consumer Division year-over-year comparisons disclose similar
occurrences; however, the DAP acquisition helped to more than offset the
earnings reduction. Weaker performance at certain business units, and general
cost increases not timely covered by pricing actions, drove a net cost increase
which exceeded the benefit from modest sales growth. General corporate and other
expenses increased just over 10%, with the investment initiative for e-commerce
infrastructure development driving the remainder of this cost increase.



10
<PAGE>   6


Two non-core product lines, with annual sales of $65 million, were divested for
a net gain during 2000. Non-recurring expenses offset this net gain during the
year.

Net interest expense increased $19.0 million in 2000 (refer to Note A [12]),
reflecting primarily the additional indebtedness to acquire DAP and smaller
acquisitions throughout the year, and to repurchase RPM common shares. These
increases were partly offset by interest expense saved from the August 10, 1998
redemption of convertible debt securities, which reduced interest expense by
$1.3 million, and from debt paydowns during 2000. Fractionally higher interest
rates in 2000 further increased net interest expense.

The effective income tax rate in 2000 was 42.9%, compared to a 1999 rate of
40.8%. The higher 2000 rate is totally attributable to the restructuring and
asset impairment charges and related costs referred to above, totaling $59.8
million, pre-tax. Excluding those charges and costs, the pro forma tax rate for
2000 would have been 40.3%, or just slightly improved from the 1999 rate.

The much lower net income in the year 2000 than in 1999 was again largely
attributable to the $59.8 million of pre-tax restructuring and asset impairment
charges and related costs taken and incurred during 2000. Excluding such costs,
pro forma 2000 net income would have been $78.6 million, or $0.73 per diluted
share, with this pro forma difference attributable to the lower comparable
performances in both operating segments, higher corporate expenses and the
higher interest costs discussed above.

LIQUIDITY AND CAPITAL RESOURCES

CASH PROVIDED FROM OPERATIONS
The Company generated $74.5 million in cash from operations during 2001, $28.1
million less than during 2000. The major difference between years occurred with
working capitals, particularly accounts receivable and inventory, where there
was considerable, yet temporary, net consumption of cash this past year tied to
the restructuring program and to certain information systems conversions during
the year. These levels will be brought back in line now that these activities
have been essentially completed.

The Company expects to continue to generate strong free cash flow from its
operations, which remains its primary source of financing internal growth with
limited use of short-term credit.

INVESTING ACTIVITIES
The Company is not capital intensive, and capital expenditures generally do not
exceed depreciation and amortization in a given year. Other than to make
ordinary repairs and replacements, capital expenditures are made to accommodate
the Company's continued growth through improved production and distribution
efficiencies and capacity, and to enhance administration. Capital expenditures
in 2001 of $54.1 million compare with depreciation and amortization of $81.5
million. Approximately $10 million of this year's expenditures were made to
accommodate the restructuring program, which is now completed, and $12 million
were information technology (IT) related, including the completion of several
major IT platform conversions. As previously indicated, capital spending in the
IT area is expected to trend downward for the next several years.

The Company's captive insurance company invests in marketable securities in the
ordinary course of conducting its operations, and this activity will continue.
The differences between years are attributable to the timing and performance of
its investments.

During 2001, the Company sold or divested certain non-core assets, generating
total proceeds of $31.7 million.



11
<PAGE>   7





FINANCING ACTIVITIES
On January 22, 1999, the Company announced the authorization of a share
repurchase program, allowing the repurchase of up to 5 million RPM common shares
over a period of 12 months. On October 8, 1999, the Company announced the
authorized expansion of this repurchase program to a total of 10 million shares.
As of May 31, 2001, the Company had repurchased 8,970,100 of its common shares
at an average price of $11.11 per share. No further share repurchases under this
program are anticipated at this time.

On July 14, 2000, the Company had refinanced its then-existing $300 million and
$400 million revolving credit facilities with a $200 million, 364-day revolving
credit facility and a $500 million, 5-year revolving credit facility. These new
facilities have been available to back up the Company's $700 million commercial
paper program to the extent these facilities are not drawn upon. As of May 31,
2001, the Company had drawn $655.7 million against these facilities and had no
outstanding commercial paper. Due to the Company's current public debt ratings,
access to the commercial paper market is presently limited. Subsequent to year
end, the Company refinanced its $200 million facility with a one-year term loan
due July 12, 2002. The debt to capital ratio was 60% at May 31, 2000 and 2001.

The stronger dollar effect on the Company's foreign net assets reduced
shareholders' equity this past year, a trend that could continue if the dollar
strengthens further and foreign net assets continue to grow.

The Company maintains excellent relations with its banks and other financial
institutions to support its existing businesses and to provide access to
financing for future growth opportunities.

OTHER MATTERS

ENVIRONMENTAL MATTERS
Environmental obligations continue to be appropriately addressed and, based upon
the latest available information, it is not anticipated that the outcome of such
matters will materially affect the Company's results of operations or financial
condition (refer to Note H to the Consolidated Financial Statements).

MARKET RISK
The Company is exposed to market risk from changes in interest rates and foreign
currency exchange rates since it funds its operations through long- and
short-term borrowings and denominates its business transactions in a variety of
foreign currencies. A summary of the Company's primary market risk exposures is
presented below.

INTEREST RATE RISK
The Company's primary interest rate risk exposure results from floating rate
debt including various revolving credit and other lines of credit. At May 31,
2001, approximately 83% of the Company's total long-term debt consisted of
floating rate debt. If interest rates were to increase 100 basis points (1%)
from May 31, 2001 rates, and assuming no changes in long-term debt from the May
31, 2001 levels, the additional annual expense would be approximately $8.0
million on a pre-tax basis. The Company currently does not hedge its exposure to
floating interest rate risk.

FOREIGN CURRENCY RISK
The Company's foreign sales and results of operations are subject to the impact
of foreign currency fluctuations. As most of the Company's foreign operations
are in countries with fairly stable currencies, such as the United Kingdom,
Belgium and Canada, this effect has not been material. In addition, foreign debt
is denominated in the respective foreign currency, thereby eliminating any
related translation impact on earnings.


12
<PAGE>   8

If the dollar continues to strengthen, the Company's foreign results of
operations will be negatively impacted, but the effect is not expected to be
material. A 10% adverse change in foreign currency exchange rates would not have
resulted in a material impact in the Company's net income for the year ended May
31, 2001. The Company does not currently hedge against the risk of exchange rate
fluctuations.

EURO CURRENCY CONVERSION
On January 1, 1999, eleven of the fifteen members of the European Union adopted
a new European currency unit (the "euro") as their common legal currency. The
participating countries' national currencies will remain legal tender as
denominations of the euro from January 1, 1999 through January 1, 2002, and the
exchange rates between the euro and such national currency units will be fixed.
The Company has assessed the potential impact of the euro currency conversion on
its operating results and financial condition. The impact of pricing differences
on country-to-country indebtedness is not expected to be material. The Company
converted its European operations to the euro currency basis effective June 1,
1999.

FORWARD-LOOKING STATEMENTS
The foregoing discussion includes forward-looking statements relating to the
business of the Company. These forward-looking statements, or other statements
made by the Company, are made based on management's expectations and beliefs
concerning future events impacting the Company and are subject to uncertainties
and factors (including those specified below) which are difficult to predict
and, in many instances, are beyond the control of the Company. As a result,
actual results of the Company could differ materially from those expressed in or
implied by any such forward-looking statements. These uncertainties and factors
include (a) the price and supply of raw materials, particularly titanium
dioxide, certain resins, aerosols and solvents; (b) continued growth in demand
for the Company's products; (c) environmental liability risks inherent in the
chemical coatings business; (d) the effect of changes in interest rates; (e) the
effect of fluctuations in currency exchange rates upon the Company's foreign
operations; (f) the potential impact of the euro currency conversion; (g) the
effect of non-currency risks of investing in and conducting operations in
foreign countries, including those relating to political, social, economic and
regulatory factors; (h) future acquisitions and the Company's ability to
effectively integrate such acquisitions; (i) liability risks and insurance
coverage inherent in the Company's EIFS and asbestos litigation; and (j) the
ability of the Company to realize the projected pre-tax savings associated with
the restructuring and consolidation program, and to divest non-core product
lines.


                                                                              13
<PAGE>   9

CONSOLIDATED BALANCE SHEETS RPM, Inc. and Subsidiaries
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
May 31                                                                               2001             2000
- ---------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>              <C>
ASSETS
CURRENT ASSETS
     Cash and short-term investments (Note A)                                    $    23,926      $    31,340
     Trade accounts receivable (less allowances of
         $17,705 in 2001 and $16,248 in 2000)                                        411,718          399,683
     Inventories (Note A)                                                            277,494          244,559
     Prepaid expenses and other current assets                                       106,282          109,510
- ---------------------------------------------------------------------------------------------------------------
         TOTAL CURRENT ASSETS                                                        819,420          785,092
- ---------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST (NOTE A)
     Land                                                                             21,713           24,055
     Buildings and leasehold improvements                                            188,590          190,658
     Machinery and equipment                                                         412,751          384,966
- ---------------------------------------------------------------------------------------------------------------
                                                                                     623,054          599,679
     Less allowance for depreciation and amortization                                261,018          233,451
- ---------------------------------------------------------------------------------------------------------------
         PROPERTY, PLANT AND EQUIPMENT, NET                                          362,036          366,228
- ---------------------------------------------------------------------------------------------------------------
OTHER ASSETS
     Goodwill, net of amortization (Note A)                                          571,276          595,106
     Other intangible assets, net of amortization (Note A)                           300,372          320,631
     Other                                                                            25,386           32,146
- ---------------------------------------------------------------------------------------------------------------
         TOTAL OTHER ASSETS                                                          897,034          947,883
- ---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                     $ 2,078,490      $ 2,099,203
===============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
     Notes and accounts payable                                                  $   152,307      $   154,256
     Current portion of long-term debt (Note B)                                        7,379            4,987
     Accrued compensation and benefits                                                74,888           76,314
     Accrued loss reserves (Note H)                                                   55,416           64,765
     Accrued restructuring reserve (Note I)                                              -0-           13,540
     Other accrued liabilities                                                        75,022           61,326
     Income taxes payable (Notes A and C)                                             10,756            1,014
- ---------------------------------------------------------------------------------------------------------------
         TOTAL CURRENT LIABILITIES                                                   375,768          376,202
- ---------------------------------------------------------------------------------------------------------------
LONG-TERM LIABILITIES
  Long-term debt, less current maturities (Note B)                                   955,399          959,330
     Other long-term liabilities                                                      53,479           57,381
     Deferred income taxes (Notes A and C)                                            54,134           60,566
- ---------------------------------------------------------------------------------------------------------------
         TOTAL LONG-TERM LIABILITIES                                               1,063,012        1,077,277
- ---------------------------------------------------------------------------------------------------------------
         TOTAL LIABILITIES                                                         1,438,780        1,453,479
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
     Common shares, stated value $.015 per share; authorized 200,000 shares;
         issued 111,153 and outstanding 102,211 in 2001; issued 110,947 and
         outstanding 103,134 in 2000 (Note D)                                          1,619            1,616
     Paid-in capital                                                                 430,015          424,077
     Treasury shares, at cost (Note D)                                               (99,308)         (88,516)
     Accumulated other comprehensive loss (Note A)                                   (53,074)         (39,555)
     Retained earnings                                                               360,458          348,102
- ---------------------------------------------------------------------------------------------------------------
         TOTAL SHAREHOLDERS' EQUITY                                                  639,710          645,724
- ---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                       $ 2,078,490      $ 2,099,203
===============================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements



14
<PAGE>   10


CONSOLIDATED STATEMENTS OF INCOME RPM, Inc. and Subsidiaries
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
Year Ended May 31                                         2001           2000           1999
- -------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>
NET SALES                                              $2,007,762     $1,962,410     $1,720,628
Cost of sales                                           1,127,787      1,099,637        927,110
- -------------------------------------------------------------------------------------------------
Gross profit                                              879,975        862,773        793,518
Selling, general and administrative expenses              713,285        687,249        601,140
Restructuring and asset impairment charge (Note I)            -0-         51,970            -0-
Interest expense, net                                      65,203         51,793         32,781
- -------------------------------------------------------------------------------------------------
Income before income taxes                                101,487         71,761        159,597
Provision for income taxes (Note C)                        38,526         30,769         65,051
- -------------------------------------------------------------------------------------------------
NET INCOME                                             $   62,961     $   40,992     $   94,546
=================================================================================================
Average shares outstanding (Note D)                       102,202        107,221        108,731
=================================================================================================
Basic earnings per common share (Note D)               $      .62     $      .38     $      .87
=================================================================================================
Diluted earnings per common share (Note D)             $      .62     $      .38     $      .86
=================================================================================================
Cash dividends per common share                        $     .498     $     .485     $     .465
=================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY RPM, Inc. and Subsidiaries
(In thousands)

<TABLE>
<CAPTION>
                                                   Common Shares                            Accumulated
                                                   -------------                               Other
                                             Number                                        Comprehensive
                                            Of Shares   Stated      Paid-In   Treasury         Loss       Retained
                                            (Note D)     Value      Capital     Shares       (Note A)     Earnings      Total
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>        <C>         <C>          <C>           <C>         <C>
BALANCE AT MAY 31, 1998                      100,254    $1,460    $264,508   $              $(14,542)     $314,911    $566,337
                                                                                                                     ---------
     Comprehensive income
         Net income                                                                                         94,546      94,546
         Reclassification adjustments                                                            (65)                      (65)
         Other comprehensive loss                                                             (9,301)                   (9,301)
                                                                                                                     ---------
              Comprehensive income                                                                                      85,180
     Dividends paid                                                                                        (50,446)    (50,446)
     Debt conversion                          10,135       148      156,896                                            157,044
     Business combinations                       (24)                  (417)                                              (417)
     Repurchase of shares                     (1,296)                           (17,044)                               (17,044)
     Stock option exercises                      281         4        2,218                                              2,222
     Restricted share awards                      93         1           (1)
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 31, 1999                      109,443     1,613      423,204     (17,044)     (23,908)      359,011     742,876
                                                                                                                     ---------
     Comprehensive income
         Net income                                                                                         40,992      40,992
         Reclassification adjustments                                                            738                       738
         Other comprehensive loss                                                            (16,385)                  (16,385)
                                                                                                                     ---------
              Comprehensive income                                                                                      25,345
     Dividends paid                                                                                        (51,901)    (51,901)
     Repurchase of shares                     (6,517)                           (71,472)                               (71,472)
     Stock option exercises                      100         1          875                                                876
     Restricted share awards                     108         2           (2)
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 31, 2000                      103,134     1,616      424,077     (88,516)     (39,555)      348,102     645,724
                                                                                                                     ---------
     Comprehensive income
         Net income                                                                                         62,961      62,961
         Reclassification adjustments                                                          1,015                     1,015
         Other comprehensive loss                                                            (14,534)                  (14,534)
              Comprehensive income                                                                                      49,442
     Dividends paid                                                                                        (50,605)    (50,605)
     Repurchase of shares                     (1,157)                           (11,101)                               (11,101)
     Stock option exercises                       59         1          101         309                                    411
     Restricted share awards                     175         2        5,837                                              5,839
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 31, 2001                      102,211    $1,619     $430,015    $(99,308)    $(53,074)     $360,458    $639,710
===============================================================================================================================
</Table>

See Notes to Consolidated Financial Statements


                                                                              15
<PAGE>   11
CONSOLIDATED STATEMENTS OF CASH FLOWS RPM, Inc. and Subsidiaries
(In thousands)

<Table>
<Caption>

Year Ended May 31                                                                    2001           2000           1999
- ----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                    $  62,961      $  40,992      $  94,546
     Adjustments to reconcile net income to net
         cash provided by operating activities:
              Depreciation                                                            43,035         42,290         34,803
              Amortization of goodwill                                                19,694         18,352         13,625
              Other amortization                                                      18,765         18,508         13,707
              Asset impairment charge, net of gains                                    3,354          6,940
              (Decrease) in deferred liabilities                                      (6,432)       (31,081)        (4,189)
              (Earnings) of unconsolidated affiliates                                   (275)          (435)        (2,332)
     Changes in assets and liabilities, net of effect from purchases and sales
         of businesses:
              (Increase) decrease in accounts receivable                             (11,095)         6,251        (27,828)
              (Increase) decrease in inventory                                       (37,578)         4,716         11,089
              (Increase) in prepaid and other assets                                  (9,735)       (13,484)       (11,523)
              Increase (decrease) in accounts payable                                 (2,812)         1,615         (6,349)
              Increase (decrease) in accrued restructuring                           (13,540)        13,540
              Increase (decrease) in accrued liabilities                              12,373        (11,285)         7,639
              Other                                                                   (4,220)         5,659         (5,467)
- ----------------------------------------------------------------------------------------------------------------------------
                  Cash From Operating Activities                                      74,495        102,578        117,721
- ----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                                            (54,118)       (63,185)       (63,406)
     Acquisition of businesses, net of cash acquired                                  (2,645)      (323,033)       (34,551)
     Purchase of marketable securities                                               (21,906)       (19,816)       (31,666)
     Proceeds from marketable securities                                              28,283         13,142         29,895
     Joint ventures (investments) and distributions                                      647           (500)         1,063
     Proceeds from sale of assets and businesses                                      31,694         55,290            565
- ----------------------------------------------------------------------------------------------------------------------------
                  Cash From (Used For) Investing Activities                          (18,045)      (338,102)       (98,100)
- ----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Additions to long-term and short-term debt                                      708,850        937,077        494,127
     Reductions of long-term and short-term debt                                    (710,389)      (566,610)      (469,022)
     Cash dividends                                                                  (50,605)       (51,901)       (50,446)
     Exercise of stock options                                                           411            876          2,222
     Repurchase of shares                                                            (11,101)       (71,472)       (17,044)
- ----------------------------------------------------------------------------------------------------------------------------
                  Cash From (Used For) Financing Activities                          (62,834)       247,970        (40,163)
- ----------------------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                               (1,030)          (835)          (512)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                                                       (7,414)        11,611        (21,054)
- ----------------------------------------------------------------------------------------------------------------------------
CASH AT BEGINNING OF YEAR                                                             31,340         19,729         40,783
- ----------------------------------------------------------------------------------------------------------------------------
CASH AT END OF YEAR                                                                $  23,926      $  31,340      $  19,729
============================================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
     Cash paid during the year for:

         Interest                                                                  $  60,027      $  55,253      $  36,155
         Income taxes                                                              $  35,216      $  70,086      $  71,904
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
     AND FINANCING ACTIVITIES:
         Shares issued for restricted stock plan                                   $   1,459      $   1,202      $   1,385
         Receivables (debt) from business combinations                                            $  (6,724)     $  (1,557)
         Interest accreted on convertible securities                                                             $   1,696
         Shares (returned) in business combinations                                                              $    (417)
         Conversion of debt to equity                                                                            $ 157,044
</TABLE>


See Notes to Consolidated Financial Statements




16
<PAGE>   12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001, 2000 and 1999

NOTE A - A SUMMARY OF SIGNIFICANT
ACCOUNTING PRINCIPLES

(1) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of RPM, Inc. and its
majority owned subsidiaries. The Company accounts for its investment in less
than majority owned joint ventures under the equity method. Intercompany
accounts, transactions and unrealized profits and losses are eliminated in
consolidation.

Certain reclassifications have been made to prior year amounts to conform with
the current year presentation.

(2) BUSINESS COMBINATIONS
During the two year period ended May 31, 2001, the Company completed several
acquisitions which have been accounted for by the purchase method of accounting.
The $199,435,000 difference between the fair value of net assets acquired and
the purchase consideration of $354,810,000 has been allocated to goodwill. The
assets, liabilities and operating results of these companies are reflected in
the Company's financial statements from their respective dates of acquisition
forward.

The Company also completed several divestitures of businesses and product lines
during the past two years, realizing proceeds of $74,262,000. The resulting net
gains of $823,000 for the year ended May 31, 2001 and $11,993,000 for the year
ended May 31, 2000, when netted against non-recurring costs, had an immaterial
effect on net income.

Pro forma results of operations, reflecting the acquisitions and divestitures
for the years ended May 31, 2001 and May 31, 2000, were not materially different
from reported results.

(3) FOREIGN CURRENCY
The functional currency of foreign subsidiaries is their local currency.
Accordingly, for the periods presented, assets and liabilities have been
translated using exchange rates at year end while income and expense for the
periods have been translated using an annual average exchange rate. The
resulting translation adjustments have been recorded in other comprehensive
loss, a component of shareholders' equity, and will be included in net earnings
only upon the sale or liquidation of the underlying foreign investment, which is
not contemplated at this time. Transaction gains and losses have been immaterial
during the past three fiscal years.


                                                                              17
<PAGE>   13

(4) COMPREHENSIVE INCOME
Accumulated other comprehensive loss (which is shown net of taxes) consists of
the following components:

<TABLE>
<CAPTION>
                                                    Foreign        Minimum      Unrealized
                                                   Currency        Pension      Gain (Loss)
                                                  Translation     Liability         On
(In thousands)                                    Adjustments    Adjustments    Securities     Total
- -------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>           <C>           <C>
Balance at May 31, 1998                            $(13,821)     $   (786)     $     65      $(14,542)
     Reclassification adjustments for
         (gains) losses included in net income                                      (65)          (65)
     Other Comprehensive Loss                        (8,496)          (67)         (738)       (9,301)
- -------------------------------------------------------------------------------------------------------
Balance at May 31, 1999                             (22,317)         (853)         (738)      (23,908)
     Reclassification adjustments for
         (gains) losses included in net income                                      738           738
     Other Comprehensive Loss                       (16,223)          853        (1,015)      (16,385)
- -------------------------------------------------------------------------------------------------------
Balance at May 31, 2000                             (38,540)                     (1,015)      (39,555)
     Reclassification adjustments for
         (gains) losses included in net income                                    1,015         1,015
     Other Comprehensive Loss                       (14,552)         (102)          120       (14,534)
- -------------------------------------------------------------------------------------------------------
BALANCE AT MAY 31, 2001                            $(53,092)     $   (102)     $    120      $(53,074)
=======================================================================================================
</TABLE>

(5) CASH AND SHORT-TERM INVESTMENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents. The Company does not believe it is exposed to any significant
credit risk on cash and short-term investments.

(6) MARKETABLE SECURITIES
Marketable securities, all of which are classified as available for sale, total
$24,480,000 and $29,277,000 at May 31, 2001 and 2000, respectively. The
estimated fair values of these securities are included in other current assets
and are based on quoted market prices.

(7) FINANCIAL INSTRUMENTS
The Company's financial instruments recorded on the balance sheet include cash
and short-term investments, accounts receivable, notes and accounts payable and
debt. The carrying amount of cash and short-term investments, accounts
receivable and notes and accounts payable approximates fair value because of
their short-term maturity.

The carrying amount of the Company's debt instruments approximates fair value
based on quoted market prices, variable interest rates or borrowing rates for
similar types of debt arrangements.

(8) INVENTORIES
Inventories are stated at the lower of cost or market, cost being determined
substantially on a first-in, first-out (FIFO) basis and market being determined
on the basis of replacement cost or net realizable value. Inventory costs
include raw material, labor and manufacturing overhead. Inventories were
composed of the following major classes:

May 31                                2001         2000
- -----------------------------------------------------------
(In thousands)
Raw material and supplies           $ 89,071     $ 86,755
Finished goods                       188,423      157,804
- -----------------------------------------------------------
Total Inventory                     $277,494     $244,559
===========================================================


18
<PAGE>   14

(9) DEPRECIATION
Depreciation is computed over the estimated useful lives of the assets primarily
using the straight-line method. Depreciation expense charged to operations for
the three years ended May 31, 2001 was $43,035,000, $42,290,000 and $34,803,000,
respectively. The annual depreciation rates are based on the following ranges of
useful lives:

Land improvements                          10 to 50 years
Buildings and improvements                  5 to 50 years
Machinery and equipment                     3 to 20 years


(10) INTANGIBLES
The excess of cost over the underlying value of the net assets of companies
acquired is being amortized on the straight-line basis, primarily over 40 years.
Amortization expense charged to operations for the three years ended May 31,
2001 was $19,694,000, $18,352,000 and $13,625,000, respectively. Goodwill is
shown net of accumulated amortization of $103,494,000 at May 31, 2001
($88,060,000 at May 31, 2000).

Intangible assets also represent costs allocated to formulae, trademarks and
other specifically identifiable assets arising from business acquisitions. These
assets are being amortized using the straight-line method principally over
periods of 7 to 40 years. The Company assesses the recoverability of the excess
of cost over the assigned value of net assets acquired by determining whether
the amortization of the balance over its remaining life can be recovered through
undiscounted future operating cash flows of the acquired operations.
Amortization expense charged to operations for the three years ended May 31,
2001 was $16,602,000, $17,084,000 and $12,504,000, respectively.

Other intangible assets consist of the following major classes:

May 31                                   2001        2000
- ----------------------------------------------------------
(In thousands)
Formulae                             $167,845    $170,146
Trademarks                            105,466     106,363
Distributor networks                   39,034      39,076
Workforce                              38,107      40,589
Other                                  30,627      34,635
- ----------------------------------------------------------
                                      381,079     390,809
Accumulated amortization               80,707      70,178
- ----------------------------------------------------------
OTHER INTANGIBLE ASSETS, NET         $300,372    $320,631


(11) RESEARCH AND DEVELOPMENT
Research and development costs are charged to operations when incurred and are
included in operating expenses. The amounts charged for the three years ended
May 31, 2001 were $21,841,000, $22,328,000 and $18,022,000, respectively. The
customer sponsored portion of such expenditures was not significant.

(12) INTEREST EXPENSE, NET
Interest expense is shown net of investment income which consists of interest,
dividends and capital gains. Investment income for the three years ended May 31,
2001 was $3,682,000, $2,643,000 and $4,880,000, respectively.

(13) INCOME TAXES
The Company and its wholly owned domestic subsidiaries file a consolidated
federal income tax return. The tax effects of transactions are recognized in the
year in which they enter into the determination of net income, regardless of
when they are recognized for tax purposes. As a result, income tax expense
differs from actual taxes payable. The accumulation of these differences at May
31, 2001 is shown as a noncurrent liability of $54,134,000 (net of a noncurrent
asset of $74,268,000). At May 31, 2000, the noncurrent liability was $60,566,000
(net of a noncurrent asset of $72,323,000). The Company does not intend to



                                                                              19
<PAGE>   15

distribute the accumulated earnings of consolidated foreign subsidiaries
amounting to $102,847,000 at May 31, 2001, and $92,706,000 at May 31, 2000, and
therefore no provision has been made for the taxes which would result if such
earnings were remitted to the Company.

(14) ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

(15) REPORTABLE SEGMENTS
Reportable segment information appears on pages 6 and 7 of this report.

(16) CHANGES IN ACCOUNTING POLICIES
DERIVATIVES
The Company adopted Statement of Financial Accounting Standards No. 133
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133")
beginning June 1, 2001. SFAS No. 133, as amended by SFAS No. 138, establishes
accounting and reporting standards that require derivative instruments to be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 also requires that changes in the derivative's fair
value be recognized currently in earnings unless specific hedge accounting
criteria are met. The Company has only limited involvement with derivative
financial instruments and does not use them for trading purposes. The adoption
of SFAS No. 133 will not have a material impact on the Company's consolidated
results of operations, financial position or cash flows.

REVENUE RECOGNITION
The Company's subsidiaries recognize revenue when title and risk of loss passes
to customers. Staff Accounting Bulletin No. 101, "Revenue Recognition," issued
by the Securities and Exchange Commission, did not have an impact on the
Company's operating revenues for any of the years presented.

The Financial Accounting Standards Board's Emerging Issues Task Force
pronouncements issued during the current year covering shipping and handling
costs and certain sales incentives have been adopted. The net impact of these
accounting changes resulted in modest increases in net sales with offsets to
selling, general and administrative expenses. This change has no effect on the
dollar amount of the Company's net income. Prior year net sales and selling,
general and administrative expenses have been reclassified to conform to current
period presentation.

Shipping costs paid to third party shippers for transporting products to
customers are included in selling, general and administrative expense. For the
years ended May 31, 2001, 2000 and 1999, shipping costs were $75,400,000,
$66,100,000 and $56,000,000, respectively.

GOODWILL AND OTHER INTANGIBLES

The Company adopted Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets" effective June 1, 2001. The Standard
replaces the requirement to amortize goodwill and certain other intangible
assets with an impairment test requirement. The Company is in the process of
evaluating this Standard and its impact on net income.


                                                                              20
<PAGE>   16

NOTE B - Borrowings

A description of long-term debt follows:

<TABLE>
<CAPTION>
May 31                                                                                2001         2000
- -------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                                                  <C>          <C>
Revolving credit agreement for $500,000,000 with a syndicate of banks through
July 14, 2005. Interest, which is tied to LIBOR, averaged 6.09% at May 31, 2001.
The Chairman of the Board and Chief Executive Officer of the Company is a
director of one of the banks providing this facility.                                $500,000     $    -0-

Revolving 364-day credit agreement for $200,000,000 with a syndicate of banks.
Interest, which is tied to LIBOR, averaged 5.62% at May 31, 2001.                     155,700          -0-

Commercial Paper refinanced with proceeds from the credit agreements
described above.                                                                          -0-      604,000

Short-term borrowings with a bank bearing interest of 5.63% at May 31, 2001.
These obligations along with other short-term borrowings have been reclassified
as long-term debt reflecting the Company's intent and ability, through unused
credit facilities, to refinance these obligations.                                     33,000       75,000

7.00% unsecured senior notes due June 15, 2005.                                       150,000      150,000

Unsecured notes due March 1, 2008, interest, which is tied to LIBOR, averaged
5.10% at May 31, 2001.                                                                100,000      100,000

Revolving multi-currency credit agreement for $15,000,000 with a bank through
December 31, 2002. Interest, which is tied to one of various rates, averaged
5.67% at May 31, 2001.                                                                  9,827          -0-

Revolving 364-day multi-currency credit agreement for $23,445,000 with a bank.
Interest, which is tied to one of various rates, averaged 5.30% at May 31, 2000.          -0-       17,553

6.75% unsecured senior notes due to an insurance company in annual
installments through 2003                                                               5,143        6,857

Other notes and mortgages payable at various rates of interest due in
installments through 2008, substantially secured by property.                           9,108       10,907
- -------------------------------------------------------------------------------------------------------------
                                                                                      962,778      964,317
Less current portion                                                                    7,379        4,987
- -------------------------------------------------------------------------------------------------------------
TOTAL LONG-TERM DEBT, LESS CURRENT MATURITIES                                        $955,399     $959,330
=============================================================================================================
</TABLE>

Subsequent to year end, the Company refinanced the $200,000,000 credit agreement
with a one-year term loan due July 12, 2002.

At May 31, 2001, the Company had additional unused short-term lines of credit
with several banks totalling $51,600,000, in addition to the $44,300,000
available under the $200 million, 364-day revolving credit agreement.

The aggregate maturities of long-term debt for the five years subsequent to May
31, 2001 are as follows: 2002 - $7,379,000; 2003 - $202,075,000; 2004 -
$2,960,000; 2005 - $269,000; 2006 - $650,030,000.


                                                                              21
<PAGE>   17

NOTE C - Income Taxes

Consolidated income before taxes consists of the following:

<TABLE>
<CAPTION>
Year Ended May 31                                                                      2001            2000            1999
- -------------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                                                  <C>             <C>             <C>
     United States                                                                   $  81,853       $  41,424       $ 124,965
     Foreign                                                                            19,634          30,337          34,632
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                     $ 101,487       $  71,761       $ 159,597
===============================================================================================================================
Provision for income taxes consists of the following:
Current:
     U.S. federal                                                                    $  38,991       $  43,174       $  48,609
     State and local                                                                     3,829           3,547           7,448
     Foreign                                                                             2,138          15,129          13,183
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                        44,958          61,850          69,240
- -------------------------------------------------------------------------------------------------------------------------------
Deferred:
     U.S. federal                                                                       (4,831)        (29,028)         (6,238)
     Foreign                                                                            (1,601)         (2,053)          2,049
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                        (6,432)        (31,081)         (4,189)
- -------------------------------------------------------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES                                                           $  38,526       $  30,769       $  65,051
===============================================================================================================================

A reconciliation between the actual income tax expense provided and the income tax expense computed by applying the statutory
federal income tax rate of 35% to income before tax is as follows:

Income taxes at U.S. statutory rate                                                  $  35,520       $  25,116       $  55,859
Difference in foreign taxes versus the U.S. statutory rate                              (1,563)          2,458           1,032
State and local income taxes net of federal income tax benefit                           2,489           2,306           4,841
Tax credits                                                                               (676)           (340)           (660)
Amortization of goodwill                                                                 4,530           4,285           3,326
Tax benefits from foreign sales corporation                                             (1,675)         (1,725)         (1,860)
Other                                                                                      (99)         (1,331)          2,513
- -------------------------------------------------------------------------------------------------------------------------------
ACTUAL TAX EXPENSE                                                                   $  38,526       $  30,769       $  65,051
- -------------------------------------------------------------------------------------------------------------------------------
ACTUAL TAX RATE                                                                          37.96%          42.88%          40.76%
===============================================================================================================================
</TABLE>

Deferred income taxes result from timing differences in recognition of revenue
and expense for book and tax purposes, primarily from the tax timing differences
relating to business combinations.

NOTE D - Common Shares

There are 200,000,000 common shares authorized with a stated value of $.015 per
share. At May 31, 2001 and 2000, there were 102,211,000 and 103,134,000 shares
outstanding, respectively, each of which is entitled to one vote.

Basic earnings per share is computed by dividing income available to common
shareholders, the numerator, by the weighted average number of common shares
outstanding during each year, the denominator (102,202,000 in 2001, 107,221,000
in 2000 and 108,731,000 in 1999). In computing diluted earnings per share, the
net income was increased in 1999 by the add back of interest expense, net of
tax, on convertible securities assumed to be converted. In addition, the number
of common shares was increased by common stock options with exercisable prices
lower than the average market prices of common shares during each year and
reduced by the number of shares assumed to have been purchased with proceeds
from the exercised options. In 1999 the number of common shares was also
increased by additional shares issuable assuming conversion of convertible
securities.


22
<PAGE>   18

In April 1997, the Company adopted a Restricted Stock Plan. The Plan is intended
to replace, over a period of time, the Company's existing cash based Benefit
Restoration Plan. Under the terms of the Plan, up to 1,563,000 shares may be
awarded to certain employees through May 2007. For the year ended May 31, 2001,
175,000 shares were awarded under this Plan, net of forfeitures (108,000 shares
in 2000). Substantially, none of these awards, which generally are subject to
forfeiture until the completion of five years of service, were vested at May 31,
2001 or 2000.

In 1999, the Company authorized the repurchase of up to 10,000,000 of its common
shares. The repurchase of shares under this program were made in the open market
or in private transactions, at times and in amounts and prices that management
deemed appropriate. The Company terminated the repurchase program in July 2000,
through which time the Company had repurchased 8,970,000 shares (7,813,000
through May 31, 2000) at an aggregate cost of $99,617,000 ($88,516,000 at May
31, 2000). The Company has subsequently reissued 28,000 of these shares in
connection with its Stock Option program, bringing the balance to 8,942,000 in
treasury shares. Shares repurchased under this program are held at cost and are
included in Shareholders' Equity as treasury shares.

In April 1999, the Company adopted a Shareholder Rights Plan and declared a
dividend distribution of one right for each outstanding common share. The Plan
provides existing shareholders the right to purchase shares of the Company at a
discount in certain circumstances as defined by the Plan. The rights are not
exercisable at May 31, 2001 and expire in May 2009.

The Company has options outstanding under two stock option plans, the 1989 Stock
Option Plan and the 1996 Key Employees Stock Option Plan, which provide for the
granting of options for up to 9,000,000 shares (4,500,000 shares in 2000 and
1999). These options are generally exercisable cumulatively in equal annual
installments commencing one year from the grant date and have expiration dates
ranging from July 2001 to April 2011. At May 31, 2001, 3,589,000 shares (291,000
at May 31, 2000) were available for future grant.

Transactions during the last two years are summarized as follows:


Shares Under Option                                            2001      2000
- --------------------------------------------------------------------------------
(In thousands)
Outstanding, beginning of year (weighted average price of
$13.01 ranging from $5.84 to $17.25 per share)                 6,243     4,708

Granted (weighted average price of $9.21 ranging from
$8.69 to $9.26 per share)                                      1,202     1,843

Cancelled (weighted average price of $13.26 ranging from
$8.81 to $17.25 per share)                                      (369)     (208)

Exercised (weighted average price of $6.92 ranging from
$5.84 to $8.42 per share)                                        (59)     (100)

- --------------------------------------------------------------------------------
OUTSTANDING, END OF YEAR (WEIGHTED AVERAGE PRICE OF
$12.39 RANGING FROM $8.42 TO $16.35 PER SHARE)                 7,017     6,243
================================================================================
EXERCISABLE, END OF YEAR (WEIGHTED AVERAGE PRICE OF
$13.17 RANGING FROM $8.42 TO $16.35 PER SHARE)                 3,947     3,103
================================================================================


 23
<PAGE>   19
<Table>
<Caption>
                                               Options Outstanding                               Options Exercisable
                                                 at May 31, 2001                                   at May 31, 2001
                                 ------------------------------------------------          -----------------------------
                                                    Weighted
                                                    Average            Weighted                                Weighted
     Range of                     Shares           Remaining            Average            Shares               Average
  Exercise Prices                 (000's)             Life               Price             (000's)               Price
<S>                                <C>                <C>              <C>                    <C>              <C>
$   5.00- $  9.99                  2,364              8.5               $ 9.36                445               $ 9.41
$  10.00- $ 14.99                  2,523              4.9               $12.64              2,110               $12.43
$  15.00- $ 17.25                  2,130              6.7               $15.46              1,392               $15.50
                                  ------                                                   ------
                                   7,017              6.6               $12.39              3,947               $13.17
                                  ======                                                   ======
</TABLE>

The Company is accounting for its stock option plans under the provisions of the
Accounting Principle Board's Opinion No. 25 and, accordingly, no compensation
cost has been recognized. If compensation cost had been determined based on the
fair value at the grant date for awards under this plan consistent with the
method prescribed by Statement of Financial Accounting Standards No. 123, the
Company's net income and earnings per share for the years ended May 31, 2001 and
2000, would have been reduced to the pro forma amounts indicated in the
following table:

                                            2001                     2000
- --------------------------------------------------------------------------------
(In thousands except per share amounts)
Pro Forma Net Income                      $59,956                  $38,169
================================================================================
Pro Forma Earnings Per Share:
     Basic                                $   .59                  $   .36
================================================================================
     Diluted                              $   .59                  $   .36
================================================================================

The fair value of each option is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions. The expected volatility rate is 32.5% for shares granted in 2001
and 28.9% for 2000. The expected life is 7.0 and 7.5 years, with dividend yields
of 3.5% and 3.3% and risk-free interest rates of 5.1% and 6.4%, for 2001 and
2000, respectively.

NOTE E - Leases

At May 31, 2001, certain property, plant and equipment were leased by the
Company under long-term leases. Certain of these leases provide for increased
rental based upon an increase in the cost-of-living index. Future minimum lease
commitments as of May 31, 2001 for all non-cancelable leases are as follows:

May 31                                                           (In thousands)
- --------------------------------------------------------------------------------
2002                                                               $ 13,572
2003                                                                 10,627
2004                                                                  6,445
2005                                                                  4,766
2006                                                                  4,241
Thereafter                                                           18,400
- --------------------------------------------------------------------------------
TOTAL MINIMUM LEASE COMMITMENTS                                    $ 58,051
================================================================================

Rental expenses for all operating leases totalled $20,523,000 in 2001,
$17,183,000 in 2000 and $13,934,000 in 1999. Capitalized leases were
insignificant for the three years ended May 31, 2001.

NOTE F - Retirement Plans

The Company sponsors a non-contributory defined benefit pension plan (The
Retirement Plan) covering substantially all domestic non-union employees.
Pension coverage for employees of the Company's foreign subsidiaries is
provided, to the extent deemed appropriate, through separate plans, many of
which are governed by local statutory requirements. In addition, benefits for
domestic union employees are provided by separate plans.

The Retirement Plan provides benefits that are based upon years of service and
average compensation with accrued benefits vesting after five years. Benefits
for union employees are generally based upon years of service. The Company's
funding policy is to contribute annually an amount that can be deducted for
federal income tax purposes using a different actuarial cost method and
different assumptions from those used for financial reporting.


24
<PAGE>   20

Net periodic pension cost (income) consisted of the following for the three
years ended May 31, 2001:

<TABLE>
<CAPTION>
                                                             U.S. Plans                          Non-U.S. Plans
                                                ------------------------------------   -----------------------------------------
                                                  2001         2000         1999         2001         2000         1999
- --------------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                              <C>          <C>          <C>          <C>          <C>          <C>
Service cost                                     $ 7,742      $ 6,650      $ 7,247      $ 1,112      $ 1,122      $ 1,041
Interest cost                                      6,470        5,678        5,253        2,314        2,176        2,263
Expected return on plan assets                    (9,157)      (6,123)      (6,071)      (3,396)      (3,026)      (3,183)
Amortization of:
     Prior service cost                              164          132          114
     Net gain on adoption of SFAS No. 87             (87)         (96)        (100)
Net actuarial (gains) losses recognized              (62)         439           71          (85)          91            1
Curtailment/settlement (gains) losses               (722)         103       (1,728)                      (24)        (308)
- --------------------------------------------------------------------------------------------------------------------------------
NET PENSION COST                                 $ 4,348      $ 6,783      $ 4,786      $   (55)     $   339      $  (186)
================================================================================================================================
</TABLE>


The changes in benefit obligations and plan assets, as well as the funded status
of the Company's pension plans at May 31, 2001 and 2000 were as follows:

<TABLE>
<CAPTION>
                                                                           U.S. Plans                        Non-U.S. Plans
                                                               ------------------------------    -------------------------------
                                                                     2001              2000              2001              2000
- --------------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                             <C>               <C>               <C>               <C>
Benefit obligation at beginning of year                         $  81,892         $  76,328         $  32,343         $  33,006
Service cost                                                        7,742             6,650             1,112             1,122
Interest cost                                                       6,470             5,678             2,314             2,176
Benefits paid                                                     (12,785)           (3,820)           (1,641)           (1,376)
Participant contributions                                                                                 428               404
Actuarial (gains) losses                                            4,156            (5,884)            2,219            (3,520)
Currency exchange rate changes                                                                         (2,600)              683
Curtailment/settlement (gains) losses                                (721)          (11,184)                               (152)
Plan amendments                                                                       2,786
Acquisitions                                                          445            11,338
- --------------------------------------------------------------------------------------------------------------------------------
BENEFIT OBLIGATION AT END OF YEAR                               $  87,199         $  81,892         $  34,175         $  32,343
================================================================================================================================
Fair value of plan assets at beginning of year                  $ 101,502         $  61,715         $  40,921         $  36,469
Actual return on plan assets                                       (2,543)           22,675               186             4,138
Employer contributions                                              7,202             9,772               500               421
Participant contributions                                                                                 428               404
Benefits paid                                                     (12,785)           (3,820)           (1,641)           (1,376)
Currency exchange rate changes                                                                         (2,837)              865
Curtailment/settlement gains (losses)                                                (6,092)
Acquisitions                                                          523            17,252
- --------------------------------------------------------------------------------------------------------------------------------
FAIR VALUE OF PLAN ASSETS AT END OF YEAR                        $  93,899         $ 101,502         $  37,557         $  40,921
================================================================================================================================
Excess of plan assets versus benefit
     obligations at end of year                                 $   6,700         $  19,610         $   3,382         $   8,577
Contributions after measurement date                                2,537                15                93               108
Unrecognized actuarial (gains) losses                               2,715           (13,191)            3,514            (1,811)
Unrecognized prior service cost                                     1,568             1,732
Unrecognized net transitional asset                                  (198)             (285)
- --------------------------------------------------------------------------------------------------------------------------------
NET AMOUNT RECOGNIZED                                           $  13,322         $   7,881         $   6,989         $   6,874
================================================================================================================================
</TABLE>


                                                                              25
<PAGE>   21

<TABLE>
<CAPTION>
                                                                 U.S. Plans                        Non-U.S. Plans
                                                           -------------------------        --------------------------
                                                            2001             2000              2001            2000
- -----------------------------------------------------------------------------------------------------------------------
(In thousands)
Amounts recognized in the consolidated
        balance sheets consist of:
<S>                                                         <C>              <C>               <C>             <C>
Prepaid benefit cost                                        $ 14,057         $  9,401          $  7,973        $  7,874
Accrued benefit liability                                       (781)          (1,520)           (1,041)         (1,000)
Accumulated other comprehensive loss                              46                                 56
- -----------------------------------------------------------------------------------------------------------------------
NET AMOUNT RECOGNIZED                                       $ 13,322         $  7,881          $  6,988        $  6,874
=======================================================================================================================
</TABLE>

For domestic plans with accumulated benefit obligations in excess of plan
assets, the projected benefit obligation, accumulated benefit obligation and
fair value of assets were $781,000, $781,000 and $ -0-, respectively, as of May
31, 2001 and $1,243,000, $1,243,000 and $ -0-, respectively, as of May 31, 2000.
For foreign plans with accumulated benefit obligations in excess of plan assets,
the projected benefit obligation, accumulated benefit obligation and fair value
of assets were $1,145,000, $1,042,000 and $ -0-, respectively, as of May 31,
2001 and $1,088,000, $944,000 and $ -0-, respectively, as of May 31, 2000.

The following weighted average assumptions were used to determine the Company's
obligations under the plans:

<TABLE>
<CAPTION>
                                                                 U.S. Plans                        Non-U.S. Plans
                                                           -------------------------         --------------------------
                                                            2001             2000              2001             2000
- -----------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>               <C>              <C>               <C>
Discount rate                                               7.50%             8.00%            6.63%             6.17%
Expected return on plan assets                              9.00%             9.00%            8.25%             8.25%
Rate of compensation increase                               4.00%             4.50%            4.00%             4.25%
</TABLE>

The plans' assets consist primarily of stocks, bonds and fixed income
securities.

The Company also sponsors an employee savings plan under Section 401(k) of the
Internal Revenue Code, which covers substantially all non-union employees in the
United States. The Plan provides for matching contributions in Company shares
based upon qualified employee contributions. Matching contributions charged to
income were $5,170,000, $4,925,000 and $4,304,000 for years ending May 31, 2001,
2000 and 1999, respectively.


26
<PAGE>   22

NOTE G - Postretirement Health Care Benefits

In addition to the defined benefit pension plan, the Company also provides
health care benefits to certain of its retired employees through unfunded plans.
Employees become eligible for these benefits if they meet minimum age and
service requirements. The components of this expense for the three years ended
May 31, 2001 were as follows:

<TABLE>
<CAPTION>
                                                                               2001               2000               1999
- -----------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                                           <C>                <C>                <C>
Service cost - Benefits earned during this period                             $  81              $ 110              $  99
Interest cost on the accumulated obligation                                     918                890                784
Amortization of unrecognized (gains)                                           (124)               (55)               (40)
- -----------------------------------------------------------------------------------------------------------------------------
NET PERIODIC POSTRETIREMENT EXPENSE                                           $ 875              $ 945              $ 843
=============================================================================================================================
</TABLE>

The changes in the benefit obligations of the plans at May 31, 2001 and 2000,
were as follows:

<TABLE>
<CAPTION>
                                                                                                  2001               2000
- -----------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                                                           <C>                <C>
Accumulated postretirement benefit obligation at beginning of year                            $ 11,928           $ 11,548
Service cost                                                                                        81                110
Interest cost                                                                                      918                890
Settlement/curtailment (gains) losses                                                                                (221)
Acquisitions                                                                                                        1,629
Benefit payments                                                                                  (972)              (902)
Actuarial (gains) losses                                                                           791             (1,238)
Currency exchange rate changes                                                                    (131)               112
- -----------------------------------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation at end of year                                    12,615             11,928
Unrecognized actuarial gains (losses)                                                            1,874              2,881
- -----------------------------------------------------------------------------------------------------------------------------
ACCRUED POSTRETIREMENT HEALTH CARE BENEFITS                                                   $ 14,489           $ 14,809
=============================================================================================================================
</TABLE>



A 7.5% general discount rate was used in determining the accumulated
postretirement benefit obligation as of May 31, 2001 (8.0% for May 31, 2000). A
7.0% increase in the cost of covered health care benefits was generally assumed
for fiscal 2001 (8.0% for fiscal 2000). This trend rate in all cases is assumed
to decrease to 5.0% after several years and remain at that level thereafter
except for various union plans which will cap at alternate benefit levels. A
1.0% increase in the health care costs trend rate would have increased the
accumulated postretirement benefit obligation as of May 31, 2001 by $1,275,000
and the net postretirement expense by $113,000. A 1.0% decrease in the health
care costs trend rate would have decreased the accumulated postretirement
benefit obligation as of May 31, 2001 by $1,116,000 and the net postretirement
expense by $94,000.



                                                                              27
<PAGE>   23

NOTE H - Contingencies and Loss Reserves

Accrued loss reserves consisted of the following classes:

May 31                                                     2001           2000
- --------------------------------------------------------------------------------
(In thousands)
Accrued product liability reserves                      $39,054        $41,176
Accrued warranty reserves - Current                       5,170          7,908
Accrued environmental reserves                            9,557         14,116
Accrued other                                             1,635          1,565
- --------------------------------------------------------------------------------
Accrued loss reserves - Current                          55,416         64,765
Accrued warranty reserves - Long-term                    11,959         13,740
- --------------------------------------------------------------------------------
Total Accrued Loss Reserves                             $67,375        $78,505
================================================================================


The Company, through its wholly owned insurance subsidiary, provides certain
insurance coverage, primarily product liability, to the Company's other domestic
subsidiaries. Excess coverage is provided by outside carriers. The reserves
reflected above provide for these potential losses as well as other uninsured
claims. Provision for estimated warranty costs is recorded at the time of sale
and periodically adjusted to reflect actual experience.

In addition, the Company, like others in similar businesses, is involved in
several proceedings relating to environmental matters. It is the Company's
policy to accrue remediation costs when it is probable that such efforts will be
required and the related costs can be reasonably estimated. These liabilities
are undiscounted and do not take into consideration any possible recoveries of
future insurance proceeds or claims against third parties.

Due to the uncertainty inherent in the loss reserve estimation process, it is at
least reasonably possible that actual costs will differ from estimates, but,
based upon information presently available, such future costs are not expected
to have a material adverse effect on the Company's competitive or financial
position or its ongoing results of operations. However, such costs could be
material to results of operations in a future period.


28
<PAGE>   24

NOTE I - Restructuring and
Asset Impairment Charge

For the year ended May 31, 2000, the Company recorded a restructuring charge of
$51,970,000. Included in this charge were severance and other employee related
costs of $21,986,000, contract exit and termination costs of $2,059,000,
facility closures and write-downs of property, plant and equipment of
$22,342,000 and write-downs of intangibles of $5,583,000.

In addition to the $51,970,000 restructuring charge, related costs were incurred
during the May 31, 2000 year primarily to account for inventory of certain
product lines that were being discontinued, totalling $7,876,000, and these
costs were charged to earnings and classified as a component of cost of sales.

Through May 31, 2001, the Company has paid or incurred all of the $51,970,000
restructuring charge as reflected below:

                                                            Paid or Incurred in
                                                             Year Ended May 31
                                                 Total      -------------------
                                                Charge       2001       2000
- --------------------------------------------------------------------------------
(In thousands)
Severance costs                                 $21,986    $12,058    $ 9,928
Exit and termination costs                        2,059      1,482        577
Property, plant and equipment                    22,342                22,342
Intangibles                                       5,583                 5,583
- --------------------------------------------------------------------------------
RESTRUCTURING AND ASSET IMPAIRMENT CHARGE       $51,970    $13,540    $38,430
================================================================================

The severance and other employee related costs provided for a reduction of
approximately 780 employees related to facility closures and streamlining of
operations for cost reduction initiatives. The costs of exit and contract
termination were comprised primarily of non-cancelable lease obligations on the
closed facilities. The charge for property, plant and equipment represents
write-downs to net realizable value of less efficient and duplicate facilities
and machinery and equipment no longer needed in the combined restructured
manufacturing operations.

                                                                              29
<PAGE>   25

NOTE J - Interim Financial Information (Unaudited)

The following is a summary of the quarterly results of operations for the years
ended May 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                             Three Months Ended
                                                       -----------------------------------------------------------------
                                                         August 31       November 30       February 28        May 31
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>              <C>               <C>
(In thousands except per share amounts)
2001
- ------------------------------------------------------------------------------------------------------------------------
Net sales                                                $554,923          $499,904         $405,400          $547,535
- ------------------------------------------------------------------------------------------------------------------------
Gross profit                                             $249,252          $219,102         $167,537          $244,084
- ------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                        $ 28,850          $ 16,868         $ (7,018)         $ 24,261
- ------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS (LOSS) PER SHARE                          $    .28          $    .17         $   (.07)         $    .24
========================================================================================================================
DILUTED EARNINGS (LOSS) PER SHARE                        $    .28          $    .17         $   (.07)         $    .24
========================================================================================================================
DIVIDENDS PER SHARE                                      $  .1225          $  .1250         $  .1250          $  .1250
========================================================================================================================

<CAPTION>

                                                                             Three Months Ended
                                                       -----------------------------------------------------------------
                                                         August 31       November 30       February 29        May 31
- ------------------------------------------------------------------------------------------------------------------------
(In thousands except per share amounts)
2000
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>              <C>               <C>
Net sales                                                $497,869          $502,450         $413,178          $548,913
- ------------------------------------------------------------------------------------------------------------------------
Gross profit                                             $228,290          $216,309         $176,063          $242,111
- ------------------------------------------------------------------------------------------------------------------------
Net income                                               $  7,264          $ 20,364         $  3,731          $  9,633
- ------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE                                 $    .07          $    .19         $    .04          $    .09
========================================================================================================================
DILUTED EARNINGS PER SHARE                               $    .07          $    .19         $    .04          $    .09
========================================================================================================================
DIVIDENDS PER SHARE                                      $  .1175          $  .1225         $  .1225          $  .1225
========================================================================================================================
</TABLE>


Quarterly earnings per share do not total to the yearly earnings per share due
to the weighted average number of shares outstanding in each quarter.


30
<PAGE>   26

INDEPENDENT AUDITOR'S REPORT


To The Board of Directors and Shareholders
RPM, Inc. and Subsidiaries
Medina, Ohio

We have audited the accompanying consolidated balance sheets of RPM, Inc. and
Subsidiaries as of May 31, 2001 and 2000, and the related consolidated
statements of income, shareholders' equity and cash flows for each of the years
in the three year period ended May 31, 2001. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of RPM, Inc. and
Subsidiaries at May 31, 2001 and 2000, and the results of their operations and
their cash flows for each of the years in the three year period ended May 31,
2001, in conformity with accounting principles generally accepted in the United
States.


/s/  CIULLA, SMITH & DALE, LLP

Cleveland, Ohio
July 2, 2001


                                                                              31

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>12
<FILENAME>l89965aex21-1.txt
<DESCRIPTION>EXHIBIT 21.1
<TEXT>
<PAGE>   1
                                                                    EXHIBIT 21.1
                                                                    ------------

The following is a list of subsidiaries of RPM, Inc.(1) as of June 27, 2001.


                                                              JURISDICTION OF
NAME                                                          INCORPORATION
- ----                                                          -------------

American Emulsions Co., Inc.                                  Georgia
         Select Dye & Chemical, Inc.                          Georgia
Bondex International, Inc.                                    Ohio
Bondo Corporation                                             Ohio
Carboline Company                                             Delaware
         Carboline International Corporation(2)               Delaware
                  Carboline Dubai Corporation                 Missouri
Chemical Coatings, Inc.                                       North Carolina
Chemical Specialties Manufacturing Corp.                      Maryland
Consolidated Coatings Corporation                             Ohio
DAP Products Inc.(3)                                          Delaware
Day-Glo Color Corp.                                           Ohio
Dryvit Holdings, Inc.                                         Delaware
         Dryvit Systems, Inc.(4)                              Rhode Island
                  Dryvit Systems New Zealand Limited          New Zealand
                  Metro Clean Systems, Inc.                   Delaware
                  Tech 21 Panel Systems, Inc.                 Rhode Island
                  Ultra-Tex Surfaces, Inc.                    California
Fibergrate Composite Structures Incorporated                  Delaware
         Chemgrate (Asia), Inc.(5)                            Washington
         Chemgrate Corporation                                Washington
         Chem-Grate Corporation                               Tennessee
         Chemgrate (PRC), Inc.(6)                             Washington
         Fibergrate Corporation(7)                            Texas
First Colonial Insurance Company, Inc.                        Vermont
Former DC, Inc.                                               Illinois
Guardian Products, Inc.                                       Delaware
K-C Divestiture Corp. of Delaware                             Delaware
Kop-Coat, Inc.                                                Ohio
         K-C Divestiture Corp.                                New York
         Kop-Coat New Zealand Limited                         New Zealand
                  Agpro (N.Z.) Limited                        New Zealand
Mohawk Finishing Products, Inc.                               New York
Republic Powdered Metals, Inc.                                Ohio
RPM Asia Pte. Ltd.                                            Singapore
         Alumanation (M) Sdn. Bhd.                            Malaysia
         Espan Corporation Pte. Ltd.                          Singapore
         RPM China Pte. Ltd.                                  Singapore



<PAGE>   2




                   Magnagro Industries Pte. Ltd.(8)         Singapore
                         Dryvit Wall Systems (Suzhou)
                           Co. Ltd.                         China
RPM Consumer Group, Inc.                                    Ohio
RPM-e/c, Inc.                                               Ohio
RPM Enterprises, Inc.                                       Delaware
RPM of Mass, Inc.                                           Massachusetts
         Haartz-Mason, Inc.                                 Massachusetts
         Westfield Coatings Corporation                     Massachusetts
RPM Wood Finishes Group, Inc.(9)                            Nevada
RPM World Trade, Inc.                                       Delaware
RPM World Trade, Ltd.                                       Virgin Islands
Rust-Oleum Corporation(10)                                  Illinois
         ROC Sales, Inc.(11)                                Illinois
         Rust-Oleum Holding, Inc.(12)                       Delaware
         Rust-Oleum International Corporation(13)           Delaware
         Rust-Oleum Sales Company, Inc.                     Ohio
StonCor Group, Inc.(14)                                     Delaware
         Parklin Management Group, Inc.(15)                 New Jersey
         StonCor Distribution, Inc.(16)                     Delaware
         Stonhard Agencia en Chile                          Chile
         Stonhard South America Ltda.                       Brazil
TCI, Inc.                                                   Georgia
The Euclid Chemical Company(17)                             Ohio
         Euclid Chemical International Sales Corp.(18)      Ohio
         Grandcourt N.V.(19)                                Netherlands Antilles
         Redwood Transport, Inc.(20)                        Ohio
The Flecto Company, Inc.(21)                                California
The Testor Corporation                                      Ohio
         Testor Australia Pty. Limited                      Australia
Tremco  Incorporated(22)                                    Ohio
         Paramount Technical Products, Inc.                 South Dakota
         Tremco A.B.                                        Sweden
         Tremco Asia Pacific Pty. Limited                   Australia
                  PABCO Products Pty. Limited               Australia
                  Tremco Pty. Limited                       Australia
         Tremco Asia Pte. Ltd.                              Singapore
         Tremco GmbH                                        Germany
         Weatherproofing Technologies, Inc.(23)             Delaware
William Zinsser & Co. Incorporated(24)                      New Jersey
         CPC Modern Masters, Inc.                           California
         Mantrose-Haeuser Co., Inc.                         Massachusetts
         Richard E. Thibaut, Inc.                           New York
         Zinsser Distribution, Inc.(25)                     Delaware



<PAGE>   3


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

(1) RPM, Inc. owns 2.4% of the outstanding shares of RPM Holdco Corp., a
Delaware corporation. The remaining outstanding shares of RPM Holdco Corp. are
held by Dryvit Systems, Inc., RPM Wood Finishes Group, Inc., StonCor Group, Inc.
and Tremco Incorporated.

RPM Holdco Corp. owns 100% of the outstanding shares of RPM Canada Company, a
Canadian unlimited liability company.

RPM Canada Company owns 100% of the outstanding shares of RPM Canada Investment
Company, a Canadian unlimited liability company.

RPM Canada Company is a 99% partner in RPM Canada, a General Partnership, an
Ontario partnership. RPM Canada Investment Company is a 1% partner in RPM
Canada, a General Partnership.

RPM Canada Company owns 21% of the outstanding shares of Harry A. Crossland
Investments, Ltd., a Nevada corporation. The remaining 79% of the outstanding
shares of Harry A. Crossland Investments, Ltd. are held by The Flecto Company,
Inc.

Harry A. Crossland Investments, Ltd. owns 100% of the outstanding shares of
Crossland Distributors Ltd., a Canadian corporation.

RPM Canada, a General Partnership owns 100% of the outstanding shares of Tremco
Limited, a United Kingdom corporation.

Tremco Limited owns 100% of the outstanding shares of OY Tremco Ltd., a Finnish
corporation and 100% of the outstanding shares of each of Tretolbond Limited.,
Tretol Group Limited and Tretol Limited, all United Kingdom corporations.

RPM Canada Company owns 10% of the outstanding shares of DAP Chile S.A., a
Chilean corporation. The remaining 90% of the outstanding shares of DAP Chile
S.A. are held by DAP Products Inc.

RPM Canada Company owns 100% of the outstanding shares of RPM/Europe B.V., a
Netherlands corporation.

RPM/Europe B.V. owns 100% of the outstanding shares of Rust-Oleum Netherlands
B.V., StonCor Benelux B.V., and Tremco B.V., all Netherlands corporations, and
RPOW U.K. Limited, a United Kingdom corporation.

RPM/Europe B.V. owns 96.04% of the outstanding shares of RPM/Belgium N.V., a
Belgian corporation. The remaining 3.96% of the outstanding shares of
RPM/Belgium N.V. are held by Tremco Incorporated.

RPM/Belgium N.V. owns 99.8% of the outstanding shares of Monile France S.A.R.L.,
a French corporation. The remaining .2% of the outstanding shares of Monile
France S.A.R.L. are held by RPM/Lux Consult S.A.


<PAGE>   4

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


RPM/Belgium N.V. owns 96% of the outstanding shares of Alteco Chemical S.A., a
Portuguese corporation. Of the remaining outstanding shares of Alteco Chemical
S.A., 1% is held by Alteco Technik GmbH and 3% are held by three directors of
Alteco Chemical S.A.

RPM/Europe B.V. owns 99.99% of the outstanding shares of RPOW France S.A., a
French corporation. The remaining outstanding .01% of the outstanding shares of
RPOW France S.A. are held by the directors of RPOW France S.A.

RPOW France S.A. owns 99.40% of the outstanding shares of Corroline France S.A.,
a French corporation. The remaining .60% of the outstanding shares of Corroline
France S.A. are held by the directors of Corroline France S.A.

RPOW France S.A. owns 95% of the outstanding shares of RPM Italy S.R.L, an
Italian corporation. The remaining 5% of the outstanding shares of RPM Italy
S.R.L. are held by RPM/Europe B.V.

RPM Italy S.R.L. owns 100% of the outstanding shares of APSA S.p.A., an Italian
corporation.

RPOW France S.A. owns 99.90% of the outstanding shares of Rust-Oleum France
S.A., a French corporation. The remaining .10% of the outstanding shares of
Rust-Oleum France S.A. are held by the directors of Rust-Oleum France S.A.

RPOW France S.A. owns 99.90% of the outstanding shares of Stonhard France
S.A.S., a French corporation. The remaining .10% of the outstanding shares are
held by the directors of Stonhard France S.A.S.

RPOW U.K. Limited owns 100% of the outstanding shares of each of Bondo U.K.
Limited, Carboline U.K. Limited, Chemspec Europe Limited, Dryvit U.K. Limited,
Fibergrate Composite Structures Limited, Mantrose U.K. Limited, RPM Holdings UK
Limited, Rust-Oleum U.K. Limited and Stonhard U.K. Limited, all United Kingdom
corporations, and Stonhard (Ireland) Limited, an Irish corporation.

Mantrose U.K. Limited owns 100% of the outstanding shares of each of Agricoat
Industries Limited and Wm. Zinsser Limited, both United Kingdom corporations.

RPM Holdings UK Limited owns 100% of the outstanding shares of Dore Holdings
Limited, a United Kingdom corporation.

Dore Holdings Limited owns 100% of the outstanding shares of each of Amtred
Limited and Nullifire Limited, both United Kingdom corporations.

Nullifire Limited owns 100% of the outstanding shares of Intumescent
Technologies Limited, a Cyprus Corporation.


<PAGE>   5

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

RPM Canada Company owns 94% of the outstanding shares of Stonhard (Deutschland)
GmbH, a German corporation. The remaining 6% of the outstanding shares of
Stonhard (Deutschland) GmbH are held by Parklin Management Group, Inc.

Stonhard (Deutschland) GmbH owns 100% of the outstanding shares of Alteco
Technik GmbH, a German corporation.

Alteco Technik GmbH owns 1% of the outstanding shares of Alteco Chemical S.A., a
Portuguese company. Of the remaining outstanding shares of Alteco Chemical S.A.,
96% is held by RPM/Belgium N.V. and 3% are held by three directors of Alteco
Chemical S.A.

RPM, Inc. owns .32% of the outstanding shares of Radiant Color N.V., a Belgian
corporation. The remaining 99.68% of the outstanding shares of Radiant Color
N.V. are held by RPM/Europe B.V.

Radiant Color N.V. owns 99.99% of the outstanding shares of Martin Mathys N.V.,
a Belgian corporation. The remaining .01% of the outstanding shares of Martin
Mathys N.V. are held by RPM/Belgium N.V.

RPM, Inc. owns 88% of the outstanding shares of RPM/Lux Consult S.A., a
Luxembourg corporation. The remaining 12% of the outstanding shares of RPM/Lux
Consult S.A. are held by Tremco Incorporated.

RPM/Lux Consult S.A. owns .2% of the outstanding shares of Monile France
S.A.R.L., a French corporation. The remaining 99.8% of the outstanding shares of
Monile France S.A.R.L. are held by RPM/Belgium N.V.

(2) Carboline International Corporation owns 89.2683% of StonCor Africa (Pty.)
Ltd., a South African corporation; 49% of Carboline Korea Ltd.; 45% of Carboline
Norge AS; 49% of Carboline Middle East LLC; 33.33% of Japan Carboline Company
Ltd.; and 40% of CDC Carboline (India) Ltd.

StonCor Africa (Pty.) Ltd. owns 100% of Chemrite Equipment Systems (Pty.) Ltd.
and StonCor Namibia (Pty.) Ltd., both South African corporations.

(3) DAP Products Inc. owns 90% of the outstanding shares of DAP Chile S.A., a
Chilean corporation. The remaining 10% of the outstanding shares of DAP Chile
S.A. are held by RPM Canada Company.

DAP Products Inc. owns 99% of the outstanding shares of Portazul, S.A., a
Dominican Republic corporation. The remaining 1% of the outstanding shares of
Portazul, S.A. are held by the directors of Portazul, S.A.

(4) Dryvit Systems, Inc. owns 12.6% of the outstanding shares of RPM Holdco
Corp., a Delaware corporation. The remaining outstanding shares of RPM Holdco
Corp. are held by RPM, Inc., RPM Wood Finishes Group, Inc., StonCor Group, Inc.
and Tremco Incorporated.



<PAGE>   6

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

Dryvit Systems, Inc. is a 51% joint venture partner in Beijing Dryvit Chemical
Building Materials Co., Ltd., a Peoples Republic of China company and a 72.96%
joint venture partner in Dryvit Systems USA (Europe) sp z.oo., a Polish company.

(5) Chemgrate (Asia), Inc. owns 50% of the outstanding shares of Chemgrate
Shanghai FRP Co., Ltd., a Chinese corporation. The remaining 50% of the
outstanding shares of Chemgrate Shanghai FRP Co., Ltd. are held by Chemgrate
(PRC), Inc.

(6) Chemgrate (PRC), Inc. owns 50% of the outstanding shares of Chemgrate
Shanghai FRP Co., Ltd., a Chinese corporation. The remaining 50% of the
outstanding shares of Chemgrate Shanghai FRP Co., Ltd. are held by Chemgrate
(Asia), Inc.

(7) Fibergrate Corporation owns 50% of Fibergrate B.V., a Netherlands
corporation.

(8) Magnagro Industries Pte. Ltd. owns 90% of the outstanding shares of Shanghai
Ban Lee Heng Construction Co., Ltd., a Chinese corporation.

(9) RPM Wood Finishes Group, Inc. owns 8.5% of the outstanding shares of RPM
Holdco Corp., a Delaware corporation. The remaining outstanding shares of RPM
Holdco Corp. are held by RPM, Inc., Dryvit Systems, Inc., StonCor Group, Inc.
and Tremco Incorporated.

(10) Rust-Oleum Corporation owns 99% of Rust-Oleum (Chile) Ltda, a Chilean
limited liability company. The remaining 1% of the outstanding shares of
Rust-Oleum (Chile) Ltda. are held by ROC Sales, Inc.

Rust-Oleum Corporation owns 99.992% of the outstanding shares of Rust-Oleum
Argentina S.A., an Argentine corporation. The remaining .008% of the outstanding
shares of Rust-Oleum Argentina S.A. are owned by a resident director of
Rust-Oleum Argentina S.A.

(11) ROC Sales, Inc. owns 1% of the outstanding shares of Rust-Oleum (Chile)
Ltda., a Chilean limited liability company. The remaining 99% of the outstanding
shares of Rust-Oleum (Chile) Ltda. are held by Rust-Oleum Corporation.

(12) Rust-Oleum Holding, Inc. is the 1% general partner of ROC, Limited
Partnership, a Delaware limited partnership. Rust-Oleum International
Corporation is the 99% limited partner of ROC, Limited Partnership.

(13) Rust-Oleum International Corporation is the 99% limited partner of ROC,
Limited Partnership, a Delaware limited partnership. Rust-Oleum Holding, Inc. is
the 1% general partner of ROC, Limited Partnership.

(14) StonCor Group, Inc. owns 9.5% of the outstanding shares of RPM Holdco
Corp., a Delaware corporation. The remaining outstanding shares of RPM Holdco
Corp. are held by RPM, Inc., Dryvit Systems, Inc., RPM Wood Finishes Group, Inc.
and Tremco Incorporated.


<PAGE>   7

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

StonCor Group, Inc. owns 99% of the outstanding shares of Stonhard S.A., a
Luxembourg corporation. The remaining 1% of the outstanding shares of Stonhard
S.A. are held by Parklin Management Group, Inc.

StonCor Group, Inc. owns 99.25% of the outstanding shares of Stonhard S.A. de
C.V. Mexico, a Mexican corporation, and 99.99% of the outstanding shares of
Stonhard de Mexico S.A. de C.V., a Mexican corporation.

Stonhard S.A. de C.V. Mexico owns 100% of the outstanding shares of Plasite S.A.
de C.V. Mexico, a Mexican corporation, and 100% of the outstanding shares of
Stonhard S.A. de C.V., a Columbian corporation.

Stonhard de Mexico S.A. de C.V. owns 100% of the outstanding shares of Juarez
Immobiliaria S.A. de C.V., a Mexican corporation.

StonCor Group, Inc. owns 80% of the outstanding shares of Multicolor S.A.
Argentina I.yC., an Argentine corporation.

StonCor Group, Inc. is a 50% joint venture partner in Stonhard Distribuidora de
Suelos Industriales S.A., a Spanish corporation.

StonCor Group, Inc. is the 1% general partner of Stonhard, L.P., a Delaware
limited partnership. StonCor Distribution, Inc. is the 99% limited partner of
Stonhard, L.P.

(15) Parklin Management Group, Inc. owns 6% of the outstanding shares of
Stonhard (Deutschland) GmbH, a German corporation. The remaining 94% of the
outstanding shares of Stonhard (Deutshland) GmbH are held by RPM Canada Company.

Parklin Mangement Group, Inc. owns 1% of the outstanding shares of Stonhard
S.A., a Luxembourg corporation. The remaining 99% of the outstanding shares of
Stonhard S.A. are held by StonCor Group, Inc.

(16) StonCor Distribution, Inc. is the 99% limited partner of Stonhard, L.P., a
Delaware limited partnership. StonCor Group, Inc. is the 1% general partner of
Stonhard, L.P.

(17) The Euclid Chemical Company is a 51% joint venture partner in Euclid
Admixture Canada, Inc., a Canadian corporation and a 51% joint venture partner
in Euclid Admixture Missippi, LLC, a Mississippi limited liability company.

The Euclid Chemical Company owns 99.997% of the outstanding shares of Eucomex
S.A. de C.V., a Mexican corporation. The remaining .003% of the outstanding
shares of Eucomex S.A. de C.V. are held by Redwood Transport, Inc.


<PAGE>   8

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

The Euclid Chemical Company owns 49% of the outstanding shares of Toxement S.A.,
a Columbian corporation. Redwood Transport, Inc. and Euclid Chemical
International Sales Corp. each own .0025% of the outstanding shares of Toxement
S.A. Grandcourt N.V. owns 50.99% of the outstanding shares of Toxement S.A.

(18) Euclid Chemical International Sales Corp. owns .0025% of the outstanding
shares of Toxement S.A., a Columbian corporation.

(19) Grandcourt N.V. owns 50.99% of the outstanding shares of Toxement S.A., a
Columbian corporation.

(20) Redwood Transport, Inc. owns .003% of the outstanding shares of Eucomex
S.A. de C.V., a Mexican corporation. The remaining 99.997% of the outstanding
shares of Eucomex S.A. de C.V. are held by The Euclid Chemical Company.

Redwood Transport, Inc. owns .0025% of the outstanding shares of Toxement S.A.,
a Columbian corporation.

(21) The Flecto Company, Inc. owns 79% of the outstanding shares of Harry A.
Crossland Investments, Ltd., a Nevada corporation. The remaining 21% of the
outstanding shares of Harry A. Crossland Investments, Ltd. are owned by RPM
Canada Company.

Harry A. Crossland Investments, Ltd. owns 100% of the outstanding shares of
Crossland Distributors Ltd., a Canadian corporation.

(22) Tremco Incorporated owns 67% of the outstanding shares of RPM Holdco Corp.,
a Delaware corporation. The remaining outstanding shares of RPM Holdco Corp. are
held by RPM, Inc., Dryvit Systems, Inc., RPM Wood Finishes Group, Inc. and
StonCor Group, Inc.

Tremco Incorporated owns 3.96% of the outstanding shares of RPM/Belgium N.V., a
Belgian corporation. The remaining 96.04% of the outstanding shares of
RPM/Belgium N.V. are held by RPM/Europe B.V.

RPM/Belgium N.V. owns 99.8% of the outstanding shares of Monile France S.A.R.L.,
a French corporation. The remaining .2% of the outstanding shares of Monile
France S.A.R.L. are held by RPM/Lux Consult S.A.

RPM/Belgium N.V. owns 96% of the outstanding shares of Alteco Chemical S.A., a
Portuguese corporation. Of the remaining outstanding shares of Alteco Chemical
S.A., 1% is held by Alteco Technik GmbH and 3% are held by three directors of
Alteco Chemical S.A.

Tremco Incorporated and Weatherproofing Technologies, Inc. each own .0025% of
the outstanding shares of Toxement S.A., a Columbian corporation.



<PAGE>   9

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

Tremco Incorporated owns 50% of the outstanding shares of Sime Tremco Sdn. Bhd.,
a Malaysian corporation.

Sime Tremco Sdn. Bhd. Owns 100% of the outstanding shares of each of Sime Tremco
(Malaysia) Sdn. Bhd. and Sime Tremco Specialty Chemicals Sdn, Bhd., both
Malaysian corporations.

Tremco Incorporated owns 99.999% of the outstanding shares of Tremco Far East
Limited, a Hong Kong corporation. The remaining .001% of the outstanding shares
of Tremco Far East Limited is owned by a director of Tremco Far East Limited.

Tremco Far East Limited owns 100% of the outstanding shares of Tremco (Malaysia)
Sdn. Bhd., a Malaysian corporation.

Tremco Incorporated owns 12% of the outstanding shares of RPM/Lux Consult S.A.,
a Luxembourg corporation. The remaining 88% of the outstanding shares of RPM/Lux
Consult S.A. are held by RPM, Inc.

RPM/Lux Consult S.A. owns .2% of the outstanding shares of Monile France
S.A.R.L., a French corporation. The remaining 99.8% of the outstanding shares of
Monile France S.A.R.L. are held by RPM/Belgium N.V.

(23) Weatherproofing Technologies, Inc. owns .0025% of the outstanding shares of
Toxement S.A., a Columbian corporation.

(24) William Zinsser & Co. Incorporated is the 1% general partner of Zinsser,
L.P., a Delaware limited partnership. Zinsser Distribution, Inc. is the 99%
limited partner of Zinsser, L.P.

(25) Zinsser Distribution, Inc. is the 99% limited partner of Zinsser, L.P., a
Delaware limited partnership. William Zinsser & Co. Incorporated is the 1%
general partner of Zinsser, L.P.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>13
<FILENAME>l89965aex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>   1
                                                                    Exhibit 23.1


                       Consent of Independent Accountants


         As independent public accountants, we hereby consent to the
incorporation by reference of our report dated July 2, 2001 in the Annual Report
on Form 10-K for the year ending May 31, 2001, in RPM, Inc.'s Registration
Statements on Form S-3 (333-19305, acquisition of Marson Automotive Division,
and 333-51371 acquisition of The Flecto Company, Inc.) and Registration
Statements on Form S-8 (Reg. Nos. 33-32794, 1989 Stock Option Plan and 333-35967
and 333-60104, 1996 Stock Option Plan).


                                           /s/ Ciulla, Smith & Dale LLP
                                          ------------------------------
                                          Ciulla, Smith & Dale, LLP



August 28, 2001


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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