Edit in JSFiddle

$("#editor").kendoEditor({
    tools: [
        "formatting", "foreColor", "bold", "italic", "underline", "strikethrough",
        "justifyLeft", "justifyCenter", "justifyRight", "justifyFull",
        "insertUnorderedList", "insertOrderedList", "indent", "outdent",
        "createTable", "addRowAbove", "addRowBelow", "addColumnLeft", "addColumnRight", "deleteRow", "deleteColumn",
        "createLink", "unlink", "insertImage",
        {
            name: 'clearformatting',
            tooltip: 'Clear formatting',
            exec: function(e) {
                var editor = jQuery(this).data('kendoEditor'),
                	selectedTools = editor.toolbar.element.find('a.k-state-selected'),
                	stateBefore;

                // deselect all active buttons
                selectedTools.each(function () {
                    jQuery(this).trigger('click');
                });
                
                // keep history before call exec
                stateBefore = editor.undoRedoStack.stack;
                editor.exec('foreColor', { value: '' });
                editor.exec('backColor', { value: '' });
                editor.exec('fontSize', { value: '' });
                editor.exec('fontName', { value: '' });
                //editor.exec('formatBlock', { value:'p' });
                
                // set history state
                editor.undoRedoStack.stack = stateBefore;
                editor.undoRedoStack.currentCommandIndex = stateBefore.length - 1;

                // clear selection
                setTimeout(function () {
                    editor.getSelection().collapseToEnd();
                }, 1);
            }
        }
    ]
});

<textarea id="editor"><h1>Kendo UI Editor allows your users to edit HTML in a familiar, user-friendly way.</h1><p>In this version, the <strong><span style="color:#ff0000;">Editor provides</span></strong> the core HTML editing engine, which includes basic text formatting, hyperlinks, lists, and image handling. The widget <strong>outputs identical HTML</strong> across all major browsers, follows accessibility standards and provides API for content manipulation. </p></textarea>

body{
		font: 12px/1.4 arial;
	}
	.k-clearformatting,
	.k-clearformatting.k-state-hover{
		background-image: url(http://4.bp.blogspot.com/-Fg-fnico1ao/UpQ1qNnSkmI/AAAAAAAABL0/A240S9TYrPM/s1600/icon_clearformat.png);
		background-position: center center;
	}