SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
KATY INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)
KATY INDUSTRIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
$125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously.
Identify the previous filing by registration statement number, or the
form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
KATY INDUSTRIES, INC.
6300 S. Syracuse Way, Suite 300, Englewood, Colorado 80111
(303) 290-9300
_________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held
On June 8, 1995
To the Stockholders:
The Annual Meeting of Stockholders of Katy Industries, Inc. will be
held at The Metropolitan Club, 7800 E. Orchard Road, Greenwood Village,
Colorado at 10:00 a.m. local time to consider and act upon the following
matters:
1. The election of eleven members of the Board of Directors to
serve for a term of one year.
2. The approval and adoption of the Katy Industries, Inc. Long-
Term Incentive Plan for the Company's employees and other key
individuals contributing to the success of the Company.
3. The approval and adoption of the Katy Industries, Inc.
Nonemployee Director Stock Option Plan.
4. The approval and adoption of the Katy Industries, Inc. 1994
Key Employee and Director Stock Purchase Plan.
5. The ratification of the selection by the Board of Directors of
the firm of Deloitte & Touche LLP as independent auditors of
Katy Industries, Inc. for the current year.
6. The transaction of such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed April 26, 1995 as the record date
for determining stockholders entitled to be notified of and to vote at the
meeting.
Whether or not you expect to attend the meeting, you are urged to
read the proxy statement, sign and date the enclosed proxy card and return
it promptly in the enclosed envelope.
By Order of the Board of Directors
Paul Kurowski
Secretary
May 8, 1995 THIS PAGE
INTENTIONALLY
LEFT BLANK
KATY INDUSTRIES, INC.
6300 S. Syracuse Way, Suite 300, Englewood, Colorado 80111
(303) 290-9300
_________________________________________
PROXY STATEMENT RELATING TO
ANNUAL MEETING OF STOCKHOLDERS
To Be Held
On June 8, 1995
_________________________________________
INTRODUCTION
This proxy statement is furnished in connection with the
solicitation of proxies in the accompanying form by the Board of Directors
of Katy Industries, Inc. ("Katy" or the "Company"), for the Annual Meeting
of Stockholders to be held on June 8, 1995 (the "Annual Meeting"). This
proxy statement and accompanying proxy card are being mailed to
stockholders commencing on or about May 8, 1995. The Annual Report to
Stockholders for the year ended December 31, 1994 (the "Annual Report"),
which includes audited financial statements of Katy and its consolidated
subsidiaries, accompanies this Proxy Statement.
PURPOSES OF THE ANNUAL MEETING
Election of Directors
At the Annual Meeting, stockholders entitled to vote will be
asked to consider and vote on the election of eleven members of the Board
of Directors to serve for a one year term. See "Solicitation and Voting
Information" and "Election of Directors."
Katy Industries, Inc. Long-Term Incentive Plan
At the Annual Meeting, stockholders will be asked to consider
and vote on the approval and adoption of the Katy Industries, Inc. Long-
Term Incentive Plan for the Company's employees and other key individuals
contributing to the success of the Company. See "Proposal to Approve and
Adopt the Katy Industries, Inc. Long-Term Incentive Plan."
Katy Industries, Inc. Nonemployee Director Stock Option Plan
At the Annual Meeting, stockholders will be asked to consider
and vote on the approval and adoption of the Katy Industries, Inc.
Nonemployee Director Stock Option Plan. See "Proposal to Approve and
Adopt the Katy Industries, Inc. Nonemployee Director Stock Option Plan."
Katy Industries, Inc. 1994 Key Employee and Director Stock Purchase Plan
At the Annual Meeting, stockholders will be asked to consider
and vote on the approval and adoption of the Katy Industries, Inc. 1994
Key Employee and Director Stock Purchase Plan. See "Proposal to Approve
and Adopt the Katy Industries, Inc. 1994 Key Employee and Director Stock
Purchase Plan."
Selection of Independent Auditors
At the Annual Meeting, stockholders also will be asked to
consider and ratify the selection of the firm of Deloitte & Touche LLP as
the Company's independent auditors for the current year. See
"Ratification of Independent Auditors."
Other Business
At the Annual Meeting, stockholders may also be asked to
consider and act upon such other matters as may properly come before the
meeting or any adjournment thereof. As of the date of this Proxy
Statement, the Board of Directors is not aware of any other matters that
will be presented for action at the Annual Meeting other than those
matters described above.
SOLICITATION AND VOTING INFORMATION
Record Date; Outstanding Shares
Stockholders of record at the close of business on April 26,
1995 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting. As of the Record Date, there were outstanding and
entitled to vote 9,076,387 shares of the Company's Common Stock, $1.00 par
value per share (the "Common Stock").
Quorum and Voting
The presence in person or by proxy of holders of a majority of
the outstanding shares of Common Stock will constitute a quorum for the
Annual Meeting. Abstentions and "broker non-votes" will be treated as
present in determining whether the quorum requirement is satisfied. A
"broker non-vote" occurs when a broker holding shares for a beneficial
owner votes on one proposal pursuant to discretionary authority or
instructions from the beneficial owner, but does not vote on another
proposal because the broker has not received instructions from the
beneficial owner and does not have discretionary power.
Each share of Common Stock is entitled to one vote on each
matter to come before the Annual Meeting. With regard to the election of
directors, votes may be cast in favor or withheld. Directors will be
elected by a plurality of the shares present in person or by proxy and
entitled to vote on the election of directors. "Plurality" means that the
individuals who receive the largest number of votes cast are elected as
directors up to the maximum number of directors to be elected at the
Annual Meeting. Consequently, any shares not voted (whether by
abstention, broker non-vote or withholding authority) have no impact on
the election of directors except to the extent the failure to vote for an
individual results in another individual receiving a larger number of
votes.
The other matters identified above which are to be voted upon
by stockholders at the Annual Meeting require for approval the affirmative
vote of the holders of a majority of the shares present and entitled to
vote at the meeting, provided a quorum is present. With respect to such
other matters, a stockholder may (i) vote "For" the matter, (ii) vote
"Against" the matter or (iii) "Abstain" from voting on the matter. A vote
to abstain from voting on such matter has the same effect as of a vote
against such matter. Broker non-votes will be treated as shares which are
not present and entitled to vote with respect to such matters, although
they will be counted for purposes of determining a quorum as described
above. Accordingly, broker non-votes will not be counted in determining
the required number of votes cast with respect to a particular proposal
and will have no effect on the outcome of the voting on such proposal.
Proxies
All shares represented by effective proxies will be voted as
specified therein, or if no direction is indicated, they will be voted
"For" the election of directors nominated by the Board of Directors and
"For" each of the proposals set forth in the notice attached to this Proxy
Statement. Each of such proposals is more fully described in this Proxy
Statement. A stockholder executing and returning a proxy has the power to
revoke it by notice to the Secretary of the Company prior to the Annual
Meeting, by executing and returning a proxy bearing a later date or by
attending the Annual Meeting and voting in person.
Expenses of soliciting proxies will be borne by the Company.
Solicitation will be by mail except for any incidental solicitation by
telephone, telegram and personal calls by directors, officers and regular
employees of the Company. The Company will also reimburse brokers and
certain other persons for their charges and expenses in forwarding proxy
materials to beneficial owners.
ELECTION OF DIRECTORS
Eleven directors are to be elected at the Annual Meeting, each
to serve for a one year term ending at the time of the 1996 Annual Meeting
or until their successors shall be duly elected and qualified. The
persons named in the accompanying proxy intend to vote the shares
represented by the proxy for the election of the following eleven
nominees: Philip E. Johnson, John R. Prann, Jr., William F. Andrews,
Daniel B. Carroll, Wallace E. Carroll, Jr., Arthur R. Miller, William H.
Murphy, Lutz R. Raettig, Charles W. Sahlman, Jacob Saliba and Glenn W.
Turcotte. All of the nominees are currently directors of the Company.
For information concerning these nominees for director, see "Information
Concerning Directors and Executive Officers", "Security Ownership of
Management" and "Security Ownership of Certain Beneficial Owners". All of
the nominees have indicated their willingness to serve as directors.
IT IS THE INTENTION OF THE PERSONS NAMED IN THE ENCLOSED FORM
OF PROXY TO VOTE "FOR" THE ELECTION OF THE ELEVEN NOMINEES FOR DIRECTOR
INDICATED ABOVE. IF ANY NOMINEE BECOMES UNAVAILABLE TO SERVE FOR ANY
REASON, THE PROXY WILL BE VOTED FOR A PERSON OR PERSONS TO BE SELECTED BY
THE BOARD OF DIRECTORS. PROXIES CANNOT BE VOTED FOR A NUMBER OF NOMINEES
GREATER THAN THE ELEVEN PERSONS NOMINATED BY THE BOARD OF DIRECTORS.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met nine times during 1994. Each
director then in office attended at least 75% of those meetings and of the
meetings of the committees of the Board of which he/she is a member. The
Company's By-laws provide for an Executive Committee to which the Board of
Directors has assigned all powers delegable by law. The Executive
Committee met informally throughout the year, held numerous telephone
conferences at intervals between meetings of the full Board of Directors
and acted by unanimous consent without formal meetings. The Executive
Committee presently consists of Wallace E. Carroll, Jr., Chairman, Philip
E. Johnson, Arthur R. Miller, William H. Murphy, John R. Prann, Jr.,
Charles W. Sahlman and Jacob Saliba. The Board of Directors also has an
Audit Committee and a Compensation Committee. The Audit Committee
presently consists of William H. Murphy, Chairman, Charles W. Sahlman and
William F. Andrews, none of whom was an officer or employee of the Company
during 1994. This Committee met three times during 1994. The Audit
Committee reviews the results of the annual audit with the Company's
independent auditors, reviews the scope and adequacy of the Company's
internal auditing procedures and its system of internal controls, and
reports its findings and recommendations to the Board of Directors. The
Compensation Committee presently consists of Charles W. Sahlman, Chairman,
William F. Andrews and William H. Murphy. This Committee, which reviews
current and deferred compensation of all officers of the Company and for
certain officers and key employees of its subsidiaries, held one meeting,
met informally throughout the year and held numerous telephone conferences
during 1994. The entire Board of Directors considers and selects nominees
for director and does not maintain a separate nominating committee. The
Company does not maintain a formal procedure for the selection of nominees
for director by stockholders. However, stockholders may make nominations
at the Annual Meeting.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of April 25,
1995 with respect to those persons who are presently executive officers,
directors or nominees for director of Katy. Each officer holds office
until the next annual meeting of directors:
<TABLE>
<CAPTION>
Principal Occupation Period of
and Business Service
Experience During Other as Katy
Name Age the Past Five Years Directorships Director
<S> <C> <C> <C> <C>
Philip E. Johnson 47 1994 to present: OEA, Inc. 1990 to
Chairman of the present
Board of Katy
1994 to present:
President of LeWa
Company, a private
investment company
1993 to present:
Partner with
Bennington, Johnson,
Ruttum & Reeve, PC,
attorneys at law
1980 to 1993:
Partner with Mosley,
Wells, Johnson &
Ruttum PC, attorneys
at law
John R. Prann, Jr. 44 1993 to present: 1994 to
President, Chief present
Executive Officer
and Chief Operating
Officer of Katy
1992 to 1994:
President of CRL,
Inc., a diversified
holding company
1990 to 1991:
President of Profile
Gear, Inc., a
manufacturing
company,
Libertyville, IL
1987 to 1990:
Partner of Deloitte &
Touche - valuation
and appraisal
services, Chicago,
IL
Principal Occupation Period of
and Business Service
Experience During Other as Katy
Name Age the Past Five Years Directorships Director
William F. Andrews 63 1995 to present: Johnson 1991 to
Chairman of Controls present
Schrader, Inc. Navistar
a manufacturer of Harley Davidson
automotive and Southern New
industrial valves England Tele-
1992 to 1994: communications
Chairman and CEO of Corporation
Amdura Corporation Corrections
and Utica Corp., Corp. of America
manufacturers of MB
metal shears, waste Communications
balers, compactors, Northwestern
lifting equipment Steel & Wire
and hardware Company
1990 to 1991: Black Box Corp.
President and CEO Process
of UNR Industries, Technology
a steel products Holding, Inc.
firm
1989 to 1990:
President of Massey
Investment Company,
a private investment
company
Daniel B. Carroll 59 1982 to present: ATP Manufact- 1994 to
Vice President Sales uring, L.L.C. present
ATP Manufacturing, Newgrange, L.L.C.
L.L.C., a manufact-
urer of molded
polyurethane
components
Wallace E.
Carroll, Jr. 57 1992 to present: 1991 to
Chairman and present
Vice-President of
CRL, Inc., a
diversified holding
company
1987 to present:
Investor
Arthur R. Miller 44 1988 to present: Schoen & Cie, AG 1988
Partner with Holleb to present
& Coff, attorneys
at law
William H. Murphy 63 1992 to present: Schoen & Cie, AG 1979 to
Retired present
1988 to 1992:
President of Katy
Principal Occupation Period of
and Business Service
Experience During Other as Katy
Name Age the Past Five Years Directorships Director
Lutz R. Raettig 52 1995 to present: Schoen & Cie, AG 1991 to
Executive Vice European present
President and Meffanine Fund
General Manager Holding,
North America, Curacao
Commerzbank AG, European
New York Technology
1993 to present: Ventures S.A.,
Executive Vice Luxemburg,
President and Belgium
Head of Relationship PMC, Personal
Management, Management
Commerzbank AG, Consult GmbH,
Frankfurt, Germany Frankfurt,
1988 to 1993: Germany
Executive Vice Mora
President and Head Beteiligunj,
of Investment AG, Frankfurt,
Banking, Commerzbank Germany
AG, Frankfurt,
Germany
Charles W. Sahlman 68 1987 to present: 1972 to
President, Bee Gee present
Holding Company, Inc.,
a holding company for
subsidiaries engaged
in the harvesting and
processing of seafood
Jacob Saliba 81 1993 to present: Compaganie des
Retired Entrepots et
1988 to 1993: Gares
Chairman of the Frigorifiques
Board of Katy Emerging
1988 to 1993: Germany Fund
Chief Executive Schoen & Cie, AG
Officer of Katy Syratech
Corporation
Principal Occupation Period of
and Business Service
Experience During Other as Katy
Name Age the Past Five Years Directorships Director
Glenn W. Turcotte 54 1992 to present: 1995
Executive Vice
President of Katy
1983 to present:
President of Glit
Division of Hallmark
Holdings, Inc., a
subsidiary of Katy
Robert M. Baratta 65 1993 to present:
Vice President of Katy,
1990 to present:
President of Katy
Seghers, Inc. and
Savannah Energy
Systems Company,
subsidiaries of Katy
Michael G. Gordono 55 1993 to present:
Vice President of Katy
1987 to 1993:
President of Beehive,
Inc., a subsidiary
of Katy
Paul Kurowski 53 1994 to present: Schoen & Cie, AG
Chief Financial
Officer, Treasurer
and Secretary of Katy
1993 to 1994:
Secretary, Acting
Chief Financial
Officer and Treasurer
of Katy
1977 to 1993:
Director of Taxes and
Assistant Treasure of Katy
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 25, 1995, the number of
shares of Common Stock of Katy beneficially owned by all directors
individually, each of the named current executive officers listed in the
"Summary of Cash and Certain Other Compensation" table ("the Named
Executive Officers") and by all directors and executive officers as a
group. Unless otherwise indicated, the nature of beneficial ownership is
that of sole voting power and sole investment power.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Beneficial of
Name Ownership Class
<S> <C> <C>
William F. Andrews 3,000 *
Wallace E. Carroll, Jr. 3,103,741 (1) (2) 34.1%
Philip E. Johnson 3,085,408 (1) (3) 34.0%
Arthur R. Miller 3,424,452 (1) (4) 37.7%
William H. Murphy 4,600 *
John R. Prann, Jr. 15,000 *
Lutz R. Raettig 3,000 *
Charles W. Sahlman 3,000 *
Jacob Saliba 6,216 *
Daniel B. Carroll 3,000 *
Glenn W. Turcotte 8,000 *
Robert M. Baratta 5,000 *
Michael G. Gordono 5,000 *
Paul Kurowski 6,008 *
All directors and
executive officers of
Katy as a group (14
persons) 4,240,327 (1) 46.7%(1)
* Indicates 1% or less
</TABLE>
(1) Includes shares deemed beneficially owned by Wallace E. Carroll,
Jr., Philip E. Johnson and Arthur R. Miller as a result of their
shared beneficial ownership of certain shares held by members of the
Wallace E. Carroll family as set forth under "Security Ownership of
Certain Beneficial Owners". Amounts shown, except for the total of
all directors and executive officers as a group, reflect multiple
counting of shares where more than one person may be deemed to be
the beneficial owner of such shares.
(2) See note (2) under "Security Ownership of Certain Beneficial Owners"
for information concerning the beneficial ownership of shares by
Wallace E. Carroll, Jr.
(3) See Note (6) under "Security Ownership of Certain Beneficial Owners"
for information concerning the beneficial ownership of shares by
Philip E. Johnson. Philip E. Johnson is also a trustee of an
irrevocable trust established by Lelia H. Carroll, for the benefit
of her descendants, that holds 500 shares of common stock of
Sterling-Salem Corporation. Katy owns 80% of that corporation's
outstanding common shares and the trust described above owns the
remaining 20% of the outstanding shares. Sterling Salem Corporation
has approximately $25,000 of assets, consisting of land, and does
not currently conduct business.
(4) Arthur R. Miller holds 3,000 shares directly. Mr. Miller is a
trustee of various WEC Jr. Trusts and DHC Trusts (as defined in the
notes to "Security Ownership of Certain Beneficial Owners")
collectively holding 938,584 shares and, accordingly, may be deemed
to share beneficial ownership of such shares with the other trustees
of such trusts. Mr. Miller, as a result of his position as trustee
of certain of the WEC Jr. Trusts and DHC Trusts, may also be deemed
to share beneficial ownership of 2,485,868 shares in the aggregate
held by CRL, Inc. ("CRL") and LeWa Company ("LeWa"). Mr. Miller
disclaims beneficial ownership of all shares owned by the WEC, Jr.
Trusts, DHC Trusts, CRL and LeWa.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and notes set forth as of April 25, 1995,
certain information regarding the beneficial ownership of those persons or
entities, including certain members of the family of Wallace E. Carroll,
former Chairman of the Board of Katy, since deceased (the "Carroll
Family"), and related persons and entities, who are known to be the
beneficial owners of more than five percent (5%) of the Common Stock of
Katy.
The following table reflects multiple counting of shares of the
Common Stock of Katy where more than one of the persons identified below
may be deemed to be a beneficial owner of such shares. Reference should
be made to the notes below for a description of the nature of the
beneficial ownership reported in the table below.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name and Address of Beneficial of
Of Beneficial Owner Ownership Notes Class
<S> <C> <C> <C>
Wallace E. Carroll, Jr. and
the WEC Jr. Trusts
c/o CRL, Inc.
6300 S. Syracuse Way, Suite 300
Englewood, CO 80111 3,103,741 (1) (2) (7) 34.1%
Lelia Carroll and
the LC Trusts
c/o CRL, Inc.
6300 S. Syracuse Way, Suite 300
Englewood, CO 80111 3,107,475 (1) (3) (7) 34.2%
Denis H. Carroll and
the DHC Trusts
c/o CRL Industries, Inc.
2345 Waukegan Rd.
Suite S-200
Bannockburn, IL 60015 3,120,057 (1) (4) (7) 34.3%
Barry J. Carroll and
the BJC Trusts
c/o Carroll International Corp.
2430 Des Plaines Ave., Suite 303
Des Plaines, IL 60018 2,691,813 (1) (5) (7) 29.7%
Philip E. Johnson
c/o Bennington, Johnson, Ruttum
& Reeve
370 17th Street, #2480
Denver, CO 80202 3,085,408 (1) (6) (7) 34.0%
CRL, Inc.
6300 S. Syracuse Way, Suite 300
Englewood, CO 80111 2,054,280 (7) 22.6%
Gabelli Funds, Inc.
One Corporate Center
Rye, NY 10580-1434 1,980,000 (8) 21.8%
</TABLE>
(1) Wallace E. Carroll, Jr., Denis H. Carroll, Barry J. Carroll and
Lelia Carroll are the four children of Wallace E. Carroll and Lelia
H. Carroll. Philip E. Johnson is the former husband of Lelia
Carroll. Wallace E. Carroll, Jr. and Philip E. Johnson are
directors of Katy. Daniel B. Carroll, who is also a director of
Katy, is the first cousin of each of the four children of Wallace E.
Carroll and Lelia H. Carroll.
Members of the Carroll Family collectively beneficially own 48.8% of
the outstanding Common Stock of Katy. Certain members of the
Carroll family, including Wallace E. Carroll, Jr., Denis H. Carroll,
Lelia Carroll and Philip E. Johnson and members of their immediate
families have jointly filed a Statement on Schedule 13D reporting
their beneficial ownership of Katy shares. Certain other members of
the Carroll Family, including Barry J. Carroll and members of his
immediate family have jointly filed a separate Statement on
Schedule 13D reporting their beneficial ownership of Katy shares.
Information concerning the shares reported owned by members of the
Carroll Family is based upon the Company's review of its stock
ownership records and such Schedule 13D filings.
All members of the Carroll Family and the trusts and other entities
controlled by them are parties to a Stock Purchase Agreement dated
as of January 1, 1983, pursuant to which, among other things, each
party has a right of first refusal to acquire certain shares of Katy
Common Stock proposed to be sold by other parties thereto at the
then current market value for such shares. As a part of a proposed
reorganization of Carroll Family interests expected to be completed
later in 1995, members of the Carroll Family are expected to
terminate the foregoing Stock Purchase Agreement.
(2) Wallace E. Carroll, Jr. holds 87,950 shares directly and may be
deemed to beneficially own 6,164 shares directly held by his wife,
Amelia Carroll. Various Carroll Family trusts for the benefit of
Wallace E. Carroll, Jr. and his descendants (the "WEC Jr. Trusts")
collectively hold 467,088 shares. As a trustee of such trusts,
Wallace E. Carroll, Jr. may be deemed to share beneficial ownership
of the shares held by the WEC Jr. Trusts. Other trustees of certain
of the WEC Jr. Trusts include Amelia Carroll, Arthur R. Miller and
Philip E. Johnson. As a trustee of the Carroll Foundation, a
private foundation (the "Carroll Foundation"), Wallace E. Carroll,
Jr. may be deemed to share beneficial ownership of 40,170 shares
held by such foundation. As the sole general partner of the WEC
Partnership, Ltd., Wallace E. Carroll, Jr. may be deemed to
beneficially own 16,501 shares held by such partnership. Wallace E.
Carroll, Jr. may also be deemed to share beneficial ownership of the
shares held by CRL and LeWa described below.
(3) Lelia Carroll holds 93,934 shares directly. Various Carroll Family
trusts for the benefit of Lelia Carroll and her descendants (the "LC
Trusts") collectively hold 467,971 shares. As a trustee of such
trusts, Lelia Carroll may be deemed to share beneficial ownership of
the shares held by the LC Trusts. Other trustees of certain of the
LC Trusts include Amelia Carroll, Philip E. Johnson, Arthur R.
Miller, John P. Corvino, Robert E. Kolek, Allen P. Lev and Brooke
Johnson. As a trustee of the Carroll Foundation, Lelia Carroll may
be deemed to share beneficial ownership of 40,170 shares held by
such foundation. As the sole general partner of the LCJ
Partnership, Ltd., Lelia Carroll may be deemed to beneficially own
19,532 shares held by such partnership. Lelia Carroll may also be
deemed to share beneficial ownership of the shares held by CRL and
LeWa described below.
(4) Denis H. Carroll holds 7,898 shares directly. Various Carroll
Family trusts for the benefit of Denis H. Carroll and his
descendants (the "DHC Trusts") collectively hold 471,496 shares. As
a trustee of such trusts, Denis H. Carroll may be deemed to share
beneficial ownership of the shares held by the DHC Trusts. Other
trustees of certain of the DHC Trusts include Arthur R. Miller and
Paul L. Whiting. As a trustee of the Carroll Foundation, Denis H.
Carroll may be deemed to share beneficial ownership of 40,170 shares
held by such foundation. As a general partner of the Gage
Partnership 1991, Ltd. ("Gage 91"), Denis H. Carroll may be deemed
to beneficially own the 5,906 shares held by Gage 91. Denis H.
Carroll may also be deemed to share beneficial ownership of the
shares held by CRL and LeWa described below. Denis H. Carroll is
also a trustee of the Marital Trust created under the Will of
Wallace E. Carroll (the "Marital Trust") and an administrator of the
Wallace E. Carroll Estate (the "Estate") and may be deemed to share
beneficial ownership of the 55,121 and 53,598 shares, respectively,
held by the Marital Trust and the Estate.
(5) Barry J. Carroll holds no shares directly. Various trusts for the
benefit of Barry J. Carroll and his descendants (the "BJC Trusts")
collectively hold 97,226 shares. As a trustee of such trusts, Barry
J. Carroll may be deemed to share beneficial ownership of the shares
held by the BJC Trusts. Barry J. Carroll is also a trustee of the
Marital Trust and an administrator of the Estate and may be deemed
to share beneficial ownership of the shares held by such entities.
Barry Carroll may also be deemed to share beneficial ownership of
the shares held by CRL and LeWa described below.
(6) Philip E. Johnson holds 5,550 shares directly. As a general partner
of the Gage Partnership, Ltd., Gage Partnership 1989, Ltd. and Gage
Partnership 1990, Ltd., and Gage 91, Mr. Johnson may be deemed to
share beneficial ownership of the 7,691, 2,207, 5,272 and 5,906
shares, respectively, held by such partnerships. Mr. Johnson is a
trustee of certain of the WEC Jr. Trusts holding 1,774 shares and
certain of the LC Trusts holding 467,971 shares and, accordingly,
may be deemed to share beneficial ownership of such shares. Mr.
Johnson also is a trustee of the Marital Trust and an administrator
of the Estate and may be deemed to share beneficial ownership of the
shares held by such entities. As a result of his position as
trustee of certain of the LC Trusts which are stockholders of CRL
and LeWa, Mr. Johnson may also be deemed to share beneficial
ownership of the shares held by CRL and LeWa.
(7) CRL holds 2,054,280 shares. Certain of the WEC Jr. Trusts, LC
Trusts, DHC Trusts and BJC Trusts and Wallace E. Carroll, Jr., Lelia
Carroll and the Estate hold all of the outstanding stock of CRL and
may be deemed to share beneficial ownership of the Katy shares owned
by CRL. LeWa holds 431,588 shares. Barry J. Carroll, Denis H.
Carroll, Wallace E. Carroll, Jr., Lelia Carroll and certain of the
WEC, Jr. Trusts, LC Trusts, DHC Trusts and BJC Trusts hold all of
the outstanding common stock of LeWa and may be deemed to share
beneficial ownership of the Katy shares held by LeWa. Upon
consummation of the Carroll Family reorganization referred to above,
it is expected that Wallace E. Carroll, Jr. and the WEC Jr. Trusts
will beneficially own all of the Katy shares held by CRL and LeWa
and that Lelia Carroll, Denis H. Carroll and Barry J. Carroll and
their related trusts will cease to beneficially own a portion of
such shares.
(8) Beneficial ownership is as reported on an Amendment No. 15 to
Statement on Schedule 13D dated March 15, 1995 filed by the Gabelli
Funds, Inc. and related parties.
Compliance with Section 16
Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Katy's directors, executive officers and persons
who beneficially own greater than 10% of Katy's Common Stock to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "Commission"), and copies of such reports with
the New York Stock Exchange and Katy. Based solely upon its review of
copies of the Section 16 reports, the Company believes that during its
fiscal year ended December 31, 1994, all of its directors, executive
officers and greater than 10% beneficial owners were in compliance with
their Section 16 filing requirements.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the years ending December 31, 1994,
1993 and 1992, the cash compensation paid by Katy and its subsidiaries, as
well as certain other compensation paid or accrued for those years, to
Katy's current Chief Executive Officer and the four other most highly
compensated executive officers. Katy has not granted any stock options or
restricted stock awards and has not paid any long-term incentive
compensation nor made any long-term incentive awards to such executive
officers during such periods.
<TABLE>
<CAPTION>
Other All
Annual Other
Name and Principal Position Year Salary Bonus Compensation(a) Compensation(b)
<S> <C> <C> <C> <C>
John R. Prann (c)
President, Chief Executive 1994 $241,400 $ 25,000 $49,200 $ 8,768
Officer and Chief Operating 1993 159,786 35,000 - 7,973
Officer
Glenn W. Turcotte
Executive Vice-President 1994 195,000 104,000 26,240 2,663
1993 164,904 124,769 - 2,579
1992 110,000 144,000 - 9,370
Robert M. Baratta
Vice President 1994 175,000 16,000 16,400 9,891
1993 111,500 15,000 - 2,530
Michael G. Gordono
Vice President 1994 160,000 10,000 16,400 4,243
1993 139,461 15,000 - 1,189
Paul Kurowski
Chief Financial Officer, 1994 135,000 14,000 16,400 7,432
Secretary and Treasurer 1993 109,500 25,000 - 3,468
</TABLE>
(a) Includes the dollar value of the difference between the price paid for
shares of Common Stock pursuant to the Katy Industries, Inc. 1994 Key
Employee and Director Stock Purchase Plan and the fair market value of
such shares on the date of purchase. See "Proposal to Approve and Adopt
the Katy Industries, Inc. 1994 Key Employee and Director Stock Purchase
Plan."
(b) Includes non-cash compensation consisting of personal use of corporate
automobiles, club dues and medical expenses. To the extent used, such
benefits are treated as additional wages for withholding and income tax
purposes.
(c) Commenced employment on April 14, 1993. For 1993 and 1994, John R.
Prann, Jr.'s salary and bonus were paid by CRL, a diversified holding
company owned by members of the Carroll Family, for which Mr. Prann
previously served as President until December 31, 1994. All such
amounts paid by CRL to Mr. Prann for his services as an executive
officer of Katy were reimbursed to CRL by Katy.
Supplemental Retirement and Deferral Plan
On April 21, 1995, the Board of Directors approved the Katy Industries,
Inc. Supplemental Retirement and Deferral Plan (the "Supplemental Plan").
Among other things, the Supplemental Plan allocated among select participants
a portion of a $2.5 million retirement accrual recorded on the books of the
Company. The allocation was completed considering past service, salary at
December 31, 1994 and prior retirement benefits, with a stated minimum dollar
amount allocated to each participant. These prior service allocations will
remain frozen with no interest earned and will be paid out on the later of the
participant's retirement or upon reaching age sixty-two (62). At such time,
the amount allocated to a participant will be paid out in five (5) relatively
equal annual installments. The entire allocation is subject to a lump sum
payout upon a participant's death or permanent disability. Amounts allocated
to each of the Named Executive Officers effective June 1, 1995 under the
Supplemental Plan are as follows: John R. Prann, Jr., $37,883; Glenn W.
Turcotte, $430,923; Robert M. Baratta, $107,021; Michael G. Gordono, $266,131;
and Paul Kurowski, $305,908.
Compensation of Directors
Directors who are not employees of Katy or its subsidiaries receive an
annual retainer of $9,000 for service on the Board of Directors and up to
$2,000 for attendance at each meeting of the Board or a committee thereof.
Directors who are officers are not separately compensated as directors.
Philip E. Johnson, Chairman of the Board of Directors, receives annual
compensation from the Company of $100,000 for his services as Chairman. Mr.
Johnson does not receive an additional annual retainer or fees for attending
meetings. Mr. Johnson also receives an automobile allowance from the Company
during his term as Chairman.
On April 21, 1995, the Board of Directors adopted the Directors'
Deferred Compensation Plan effective June 1, 1995 (the "Directors' Deferred
Compensation Plan"). Pursuant to the Directors' Deferred Compensation Plan
all directors' fees, retainers and other compensation paid for services as a
director may be deferred until the respective director's attainment of age 62
or termination of service as a director for any reason, whichever is later.
Deferred amounts may be invested in one or more investment alternatives
offered by the Company which are expected to include a prime rate account, a
balanced mutual fund, a "blue chip" equity fund and a "small-cap" or
international fund. Distributions of deferred amounts may be made at the
election of the director in lump sum or in five annual installments. Each
director is given a thirty (30) day period prior to the beginning of a plan
year during which an election must be made to participate in the Directors'
Deferred Compensation Plan.
Included in this Proxy Statement is a proposal which seeks stockholder
approval of the Katy Industries, Inc. Nonemployee Director Stock Option Plan
(the "Directors' Stock Option Plan"). The Directors' Stock Option Plan is
intended to assist the Company in attracting and retaining nonemployee
directors of outstanding qualification and to promote the achievement of long-
term objectives of the Company by linking the personal interest of nonemployee
directors to those of the Company's stockholders. If approved by
stockholders, the Directors' Stock Option Plan will provide to nonemployee
directors, in addition to the annual cash retainer and meeting fees described
above, an annual grant of an option to acquire 2,000 shares of the Company's
Common Stock. The exercise price of such options will be the fair market
value of the shares on the date of grant. The Board of Directors recommends
that stockholders vote in favor of the proposal to approve and adopt the
Directors' Stock Option Plan. See "Proposal to Approve and Adopt the Katy
Industries, Inc. Nonemployee Director Stock Option Plan."
BOARD OF DIRECTORS' COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors (the "Compensation
Committee") presents the following report on executive compensation:
The Compensation Committee presently consists of Charles W. Sahlman,
Chairman, William F. Andrews and William H. Murphy. The Compensation
Committee makes decisions on executive officer compensation and reports its
decisions to the Board of Directors. The Compensation Committee also seeks
approval of the Board of Directors on all aspects of compensation for the
Chief Executive Officer ("CEO").
Compensation Philosophy
The goals of the Company's compensation program are to align the
economic interest of executive officers with those of stockholders, including
Company financial objectives and market performance. The Compensation
Committee seeks to adjust compensation levels, through competitive base
salaries and bonus payments, based on individual and Company performance. The
Compensation Committee reviews the executive compensation program annually in
view of the Company's annual strategic and financial objectives and
performance.
Compensation Program Components
Annual compensation for the Company's CEO and executive officers,
including the Named Executive Officers consists of two primary elements, base
salary and annual cash bonuses. Salary and bonus levels reflect job
responsibility, seniority, Compensation Committee judgments of individual
effort and performance and the Company's financial and market performance, in
light of the competitive environment in which the Company operates.
Annual cash compensation is also influenced by the compensation
practices of comparable companies so that the Company remains reasonably
competitive in the market. While competitive pay practices are viewed as
important, the Compensation Committee believes that the most important
considerations in setting annual compensation are individual merit and the
Company's financial and market performance. In considering the Company's
financial and market performance, the Compensation Committee reviews, among
other things, net income and revenues of the Company and share price
performance relative to comparable companies and historical performance.
In late 1994, the Company engaged an independent consulting firm to
advise the Company on executive compensation issues. Based in part upon
recommendations of the consultant, in April 1995, the Compensation Committee
approved, and the Board of Directors thereafter approved and adopted, three
new programs of compensation for key management. These programs include an
Annual Bonus Plan, a Long-term Incentive Plan and a Supplemental Retirement
and Deferral Plan. Stockholders are being asked to vote on the approval and
adoption of the Long-Term Incentive Plan at the Annual Meeting. See "Proposal
to Approve and Adopt the Katy Industries, Inc. Long-Term Incentive Plan."
The Annual Bonus Plan, which will be effective as of January 1, 1995,
will establish target bonus opportunities stated as a percentage of annual
base salary for recommended key employees each year, including the CEO and the
Named Executive Officers. If 100% of pre-established performance goals are
met, the target bonus opportunity will be achieved by the employee. A higher
or lower bonus can be earned if performance exceeds or falls short of targeted
levels. The performance goals for 1995 are based on two financial measures
for each division and for corporate: operating income (with a 60% weighting)
and cash flow (with a 40% weighting).
The Supplemental Plan will, among other things, allow participants to
voluntarily defer up to 100% of their annual bonus and up to 50% of their base
salary until retirement or employment termination. The Supplemental Plan will
allow the Company to make a profit sharing allocation to all accounts of
participants in an aggregate amount equal to two percent (2%) of pre-tax
income, as determined by the Compensation Committee. Voluntary deferrals and
profit sharing allocations will be invested at the election of the employee
in four investment alternatives offered by the Company including: a prime
rate account, a balanced mutual fund, a "blue-chip" equity fund and a "small-
cap" or international fund. See "Executive Compensation - Supplemental
Retirement and Deferral Plan" above.
The Long-Term Incentive Plan will allow the Compensation Committee to
provide equity-based compensation as a third element of the Company's annual
compensation program. The Compensation Committee believes the Long-Term
Incentive Plan will enable the Company to more closely align management
compensation with stockholder interests. The terms of the Incentive Plan are
described under "Proposal to Approve and Adopt the Katy Industries, Inc. Long-
Term Incentive Plan."
Chief Executive Officer Compensation
John R. Prann, Jr. became President in April 1993 and CEO in December
1993. Mr. Prann's salary and bonus for 1994 were based upon his experience
and qualifications, responsibilities, individual effort and performance and
the Company's performance.
Summary
The Compensation Committee believes that the total compensation program
for executive officers of the Company is appropriately related to individual
performance and Katy's performance, including financial results of Katy and
stockholder value. The Compensation Committee also believes Katy's
compensation program is competitive with comparable companies and provides
appropriate incentives for Katy's executive officers to work towards continued
improvement in Katy's overall performance.
Compensation Committee of the Board of Directors:
Charles W. Sahlman, Chairman
William F. Andrews
William H. Murphy
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following is a description of certain relationships that exist with
regard to certain members of the Compensation Committee and certain of Katy's
executive officers who also serve or served as executive officers of, or
transacted business with, Katy, its subsidiaries or certain related entities.
The current members of the Compensation Committee are Charles W.
Sahlman, William F. Andrews and William H. Murphy. During a portion of 1994,
Philip E. Johnson, Denis H. Carroll and Jacob Saliba also served on the
Compensation Committee.
Charles W. Sahlman is President of Bee Gee Holdings, Inc. ("Bee Gee")
(a 39% owned Katy subsidiary) and of C.E.G.F. (USA), Inc. ("C.E.G.F.") (a 95%
owned Katy subsidiary) and is a former Executive Vice President of Katy. In
1989 Katy loaned C.E.G.F., then a 25% owned subsidiary, $4,197,000 at prime
interest rate plus 3/4%, maturing at December 31, 1994. In February, 1993
Katy purchased a 20% interest in C.E.G.F. from Bee Gee; and in March, 1994
Katy purchased a 50% interest in C.E.G.F. from a third party. These
transactions resulted in C.E.G.F. becoming a 95% owned Katy subsidiary and
resulted in the refinancing of the above described loan with an unrelated
third party.
William H. Murphy was President, Chief Operating Officer and Chief
Financial Officer of Katy through the year ended December 31, 1992.
Jacob Saliba was the Chairman of the Board of Directors of Katy through
June 29, 1994 and was Chief Executive Officer of Katy through November 30,
1993.
Philip E. Johnson is the current Chairman of the Board of Directors of
Katy. Mr. Johnson is a partner in the Denver law firm of Bennington, Johnson,
Ruttum & Reeve, P.C. which acted as counsel to Katy and its subsidiaries
during 1994. See also "Certain Relationships and Related Transactions". Mr.
Johnson also currently serves as President of Lewa Company, a Carroll family
owned company.
John R. Prann, Jr., Katy's President, Chief Executive Officer and Chief
Operating Officer, served as President of CRL, a Carroll family-owned company
until December 31, 1994 and as director of CRL until January 31, 1995.
Wallace E. Carroll, Jr. a director of Katy, also serves as Chairman and
Vice President of CRL.<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock with the cumulative
total return of the Dow Jones Industrial Average and the cumulative total
return of the Dow Jones Independent Sector Index for the fiscal years ending
December 31, 1989 through 1994. The graph below assumes $100 invested on
December 31, 1989.
Comparison Of 5-Year Cumulative Total Return
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994
Katy Industries, Inc. 100 66 75 87 110 89
Dow Jones Industrial
Average 100 99 124 133 155 163
Dow Jones Independent
Sector 100 90 124 144 182 182
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Katy is a joint venture partner with a major American oil company
and a Japanese concern in an Indonesian oil and gas exploration project.
During 1988 Katy assigned to certain entities controlled by the Carroll
family, the right to receive fifty percent (50%) of Katy's revenues from
the project after recovery of Katy's invested costs, which assignment was
in consideration of past acts of financial support by those entities.
During 1994 Katy wrote off its ($6,580,000) investment in this venture.
Arthur R. Miller, general counsel and a director of Katy, is a
partner in the Chicago law firm of Holleb & Coff which acted as counsel to
Katy and its subsidiaries during 1994 and continues to serve in such
capacity. During 1994 Katy paid $1,360,000 in legal fees to Holleb & Coff
which included fees for Mr. Miller's service as general counsel.
Philip E. Johnson, Chairman of the Board of Directors of Katy, is a
partner in the Denver law firm of Bennington, Johnson, Ruttum & Reeve
which acted as counsel to Katy and its subsidiaries during 1994. During
1994 Katy paid $280,000 in legal fees to Bennington, Johnson, Ruttum &
Reeve.
In 1989 Katy loaned C.E.G.F., then a 25% owned subsidiary of Katy,
$4,197,000 at prime interest rate plus 3/4%, maturing at December 31,
1994. In February, 1993 Katy purchased a 20% interest in C.E.G.F. from
Bee Gee and in March, 1994 Katy purchased a 50% interest in C.E.G.F. from
a third party. These transactions resulted in C.E.G.F. becoming a 95%
owned Katy subsidiary in 1994 and also resulted in the refinancing of the
above described loan with an unrelated third party. Charles W. Sahlman,
a Katy director, is President of Bee Gee and C.E.G.F.
John R. Prann, Jr., the Company's President, Chief Executive Officer
and Chief Operating Officer is a participant in the Katy Industries, Inc.
1994 Key Employee and Director Stock Purchase Plan. Pursuant to the terms
of such plan, Mr. Prann obtained a loan from the Company in the amount of
$97,050 in connection with his purchase of shares of the Company's Common
Stock under the plan in September 1994. Such loan bears interest at the
applicable federal short-term rate, payable semi-annually and adjusted
semi-annually. See "Proposal to Approve and Adopt the 1994 Key Employee
and Director Stock Purchase Plan."
PROPOSAL TO APPROVE AND ADOPT THE
KATY INDUSTRIES, INC. LONG-TERM INCENTIVE PLAN
Introduction
At the Annual Meeting, the Company's stockholders will be
requested to consider and act upon a proposal to adopt a long-term
performance incentive plan to be known as the Katy Industries, Inc. Long-
Term Incentive Plan (the "Incentive Plan"). On April 21, 1995, the Board
of Directors adopted the Incentive Plan, subject to approval by the
Company's stockholders. The Incentive Plan will have an effective date of
January 1, 1995 if approved by the Company's stockholders at the Annual
Meeting and will terminate ten years after its effective date. The
purpose of the Incentive Plan is to optimize the growth and profitability
of the Company through incentives to employees which are consistent with
the Company's goals and which link the personal interests of employees to
those of the Company's stockholders. The Incentive Plan is further
intended to provide flexibility to the Company in its ability to attract,
motivate, and retain the services of employees and other individuals who
make significant contributions to the Company's success and to allow such
persons to share in the success of the Company.
Set forth below is a summary of certain important features of
the Incentive Plan. The summary is qualified in its entirety by reference
to the full text of the Incentive Plan attached as Appendix I to this
Proxy Statement:
Administration
The Incentive Plan will be administered by the Compensation
Committee or such other committee of the Board as the Board may from time
to time designate. Among other things, the Compensation Committee will
have the authority to select officers, employees and other key individuals
who perform significant services for the Company to whom awards may be
granted ("Participants"), to determine the type of award as well as the
number of shares of the Company's Common Stock to be covered by each
award, and to determine the terms and conditions of any such awards. The
Compensation Committee also will have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the
Incentive Plan as it deems advisable, to interpret the terms and
provisions of the Incentive Plan and any awards issued thereunder and to
otherwise supervise the administration of the Incentive Plan. All
decisions made by the Compensation Committee pursuant to the Incentive
Plan will be final and binding.
Eligibility
Officers, employees and other key individuals who perform
significant services for the Company designated by the Compensation
Committee are eligible to be granted awards under the Incentive Plan. If
the Incentive Plan is approved by stockholders, it is expected that
initially, eighteen (18) persons will be designated as eligible to
participate in the Incentive Plan by the Compensation Committee. See "New
Plan Benefits" below.
Plan Features
The Incentive Plan authorizes the issuance of up to 500,000
shares of the Company's Common Stock pursuant to the grant or exercise of
stock options, including incentive stock options ("ISOs"), nonqualified
stock options, stock appreciation rights ("SARs"), restricted stock and
performance units or shares. The shares of Common Stock subject to grant
under the Incentive Plan are to be made available from authorized but
unissued shares, from treasury shares, reaquired shares or any combination
thereof. Awards may be granted for such terms as the Compensation
Committee may determine, except that the term of an option may not exceed
ten years from its date of grant. No awards outstanding on the
termination date of the Incentive Plan shall be affected or impaired by
such termination. Awards will not be transferable, except by will and the
laws of descent and distribution. The Compensation Committee has broad
authority to fix the terms and conditions of individual award agreements
with Participants.
As indicated above, several types of stock based grants can be
made under the Incentive Plan. A summary of these grants is set forth
below:
Stock Options. The Incentive Plan authorizes the Compensation
Committee to grant options to purchase the Company's Common Stock at an
exercise price which cannot be less than 100% of the fair market value of
such stock on the date of grant. The Incentive Plan permits optionees,
with the approval of the Compensation Committee, to pay the exercise price
of options in cash, stock or a combination thereof, or by "cashless
exercise" through a broker or the Company. The term of options shall be
determined by the Compensation Committee but shall not be longer than ten
years from the date of grant. The Compensation Committee will determine
the time conditions under which options will become exercisable, and the
extent to which they will be exercisable after the option holder's
employment terminates. Generally, options will remain exercisable for not
more than one year after the option holder's death or disability, not more
than three years after the option holder's retirement and not more than
thirty (30) business days after the option holder's employment terminates
for any other reason. As noted above, options may be granted either as
ISOs or nonqualified options. The principal difference between ISOs and
nonqualified options is tax treatment. See "Federal Tax Information"
below.
SARs. The Incentive Plan authorizes the Compensation
Committee to grant SARs in conjunction with all or part of any stock
option granted under the Incentive Plan. An SAR entitles the holder to
receive upon exercise the excess of the fair market value of a specified
number of shares of stock at the time of exercise over a specified price
per share. Such amount will be paid to the holder in stock (valued at its
fair market value on the date of exercise), cash or a combination thereof,
as the Compensation Committee may determine. An SAR will entitle the
optionee, in lieu of exercising the option, to receive the excess of the
fair market value of a share of stock on the date of exercise over the
option price multiplied by the number of shares for which the optionee is
exercising the SAR. Because an SAR is an alternative to an option, the
option will be canceled to the extent that the SAR is exercised, and the
SAR will be canceled to the extent the option is exercised.
Restricted Stock. The Incentive Plan authorizes the
Compensation Committee to grant restricted stock to Participants with such
restriction periods as the Compensation Committee may designate. The
Compensation Committee may also provide at the time of grant that
restricted stock cannot vest unless specific performance goals are
satisfied. The provisions of restricted stock awards (including any
applicable performance goals) need not be the same with respect to each
Participant. During the restriction period, the stock certificates
evidencing restricted shares are held by the Company. Restricted stock
may not be sold, assigned, transferred, pledged or otherwise encumbered.
Restricted stock may be subject to forfeiture upon termination of
employment, unless otherwise provided by the Compensation Committee in an
individual award agreement. Other than restrictions on transfer and any
other restrictions the Compensation Committee may impose, the Participant
will have all the rights of a holder of Common Stock, including dividend
and voting rights, that is the subject of the restricted stock award. The
Company performance measures to be used for purposes of grants of
restricted stock must be chosen from among specified alternatives which
include: return on assets, cash flow, return on investment, earnings
before income taxes or net earnings.
Performance Units or Shares. The Incentive Plan authorizes
the Compensation Committee to grant performance units or shares payable in
cash or shares of the Company's Common Stock, conditioned upon continued
service and/or the attainment of specific performance goals determined by
the Compensation Committee during a performance period. A performance
period consists of a period of consecutive fiscal years or portions
thereof designated by the Compensation Committee over which performance
goals must be met. At the conclusion of a particular performance period,
the Compensation Committee will determine the number of performance units
or shares granted to a Participant that have been earned and will deliver
to such Participant (i) the number of shares of Common Stock equal to the
number of performance units or shares determined by the Compensation
Committee to have been earned and/or (ii) cash equal to the fair market
value of such units or shares. The Compensation Committee may, in its
discretion, permit Participants to defer the receipt of performance units
or shares, provided that the election to defer payment is made prior to
the commencement of the applicable performance period. The Company
performance measures to be used for performance units or shares are the
same as those described above for restricted stock awards. In the event
the employment of a Participant is terminated by reasons of death,
disability or retirement during a performance period, the Participant
shall receive a prorated payout of the performance share or unit
determined by the Compensation Committee in its sole discretion.
Other Incentive Awards. The Incentive Plan also authorizes
the Compensation Committee, subject to the terms and provisions of the
Incentive Plan, to grant other incentive awards upon such terms as
determined by the Compensation Committee. Such awards shall specify
applicable performance periods, performance goals and such other
provisions as the Compensation Committee shall determine. The performance
measures to be used for such awards are the same as those described above
for restricted stock awards.
Amendment and Discontinuance
The Incentive Plan may be amended, altered or discontinued by
the Board of Directors, but no amendment, alteration or discontinuance may
be made that would (i) adversely affect in any material way any award
previously granted under the Incentive Plan without the written consent of
the Participant, or (ii) disqualify transactions under the Incentive Plan
from the exemption provided by Rule 16b-3 ("Rule 16b-3") under the
Exchange Act.
The Incentive Plan provides that in the event of any change in
corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, spin-off or
other distribution of stock or property, or any reorganization or partial
or complete liquidation of the Company, the Compensation Committee may
make such adjustment in the aggregate number and kind of shares reserved
for issuance under the Incentive Plan, in the number, kind and option
price of shares subject to outstanding stock options and SARs, and in the
number and kind of shares subject to other outstanding awards granted
under the Incentive Plan as may be determined to be appropriate by the
Compensation Committee, in its sole discretion, to prevent dilution or
enlargement of rights. The Incentive Plan also provides that in the event
of a Change in Control of the Company, as defined below, (i) any SARs and
stock options outstanding as of the date of the Change in Control which
are not then exercisable and vested will become fully exercisable and
vested, (ii) the restrictions applicable to restricted stock will lapse
and such restricted stock will become free of all restrictions and fully
vested, and (iii) all performance units or shares will be considered to be
fully earned and any other restrictions will lapse and such performance
units or shares will be settled in cash within thirty (30) days following
the effective date of the Change in Control. The payout of awards subject
to performance goals will be a pro rata portion of all targeted award
opportunities associated with such awards based on the number of complete
and partial calendar months within the performance period which had
elapsed as of the effective date of the Change in Control. The
Compensation Committee will also have the authority, subject to the
limitations set forth in the Incentive Plan, to make any modifications to
awards as determined by the Compensation Committee to be appropriate
before the effective date of the Change in Control.
For purposes of the Incentive Plan, "Change in Control" of the
Company means, and shall be deemed to have occurred upon, any of the
following events: (a) any person (other than those persons in control of
the Company as of the effective date of the Incentive Plan, a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of
stock of the Company) becomes the beneficial owner, directly or
indirectly, of securities of the Company representing thirty percent (30%)
or more of the combined voting power of the Company's then outstanding
securities; or (b) during any period of two (2) consecutive years (not
including any period prior to the effective date), individuals who at the
beginning of such period constitute the Board of Directors (and any new
director, whose election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose election
or nomination for election was so approved), cease for any reason to
constitute a majority thereof; or (c) the stockholders of the Company
approve: (i) a plan of complete liquidation of the Company; or (ii) an
agreement for the sale or disposition of all or substantially all the
Company's assets; or (iii) a merger, consolidation or reorganization of
the Company with or involving any other corporation, other than a merger,
consolidation, or reorganization that would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation or
reorganization.
Federal Tax Information
The following discussion is intended only as a brief summary
of the federal income tax rules that are generally relevant to stock
options, SARs, restricted stock and performance units or shares. The
following discussion is based on federal income tax law and
interpretational authorities as of the date of this Proxy Statement, which
are subject to change at any time.
Nonqualified Options and SARs. Upon the grant of a
nonqualified option (with or without an SAR), the optionee will not
recognize any taxable income and the Company will not be entitled to a
deduction. Upon the exercise of such an option or an SAR, the excess of
the fair market value of the shares acquired on the exercise of the option
over the option price (the "spread"), or the consideration paid to the
optionee upon exercise of the SAR, will constitute compensation taxable to
the optionee as ordinary income. In determining the amount of the spread
or the amount of consideration paid to the optionee, the fair market value
of the stock on the date of exercise is used, except that in the case of
an optionee subject to the six-month, short-swing profit recovery
provisions of Section 16(b) of the Exchange Act (generally officers and
directors of the Company), the fair market value will be determined six
months after the date on which the option was granted (if such date is
later than the exercise date) unless such optionee elects to be taxed
based on the fair market value at the date of exercise. Any such election
(a "Section 83(b) election") must be made and filed with the IRS within 30
days after exercise in accordance with the regulations under Section 83(b)
of the Internal Revenue Code (the "Code"). The Company, in computing its
federal income tax, will generally be entitled to a deduction in an amount
equal to the compensation taxable to the optionee.
ISOs. An optionee will not recognize taxable income on the
grant or exercise of an ISO. However, the spread at exercise will
constitute an item includible in alternative minimum taxable income, and
thereby may subject the optionee to the alternative minimum tax. Such
alternative minimum tax may be payable even though the optionee receives
no cash upon the exercise of the ISO with which to pay such tax. Upon the
disposition of shares of stock acquired pursuant to the exercise of an ISO
after the later of (a) two years from the date of grant of the ISO or (b)
one year after the exercise date (the "ISO Holding Period"), the optionee
will recognize long-term capital gain or loss, as the case may be,
measured by the difference between the stock's selling price and the
exercise price. The Company is not entitled to any tax deduction by
reason of the grant or by reason of a disposition of stock received upon
exercise of an ISO if the ISO Holding Period is satisfied. If the ISO
Holding Period is not met (i.e., the optionee makes a "disqualifying
disposition"), the optionee will recognize compensation income equal to
the difference between the exercise price and the lower of (i) the fair
market value of the stock at the date of the option exercise or (ii) the
sale price of the stock, and the Company will be entitled to a deduction
in the same amount. Any additional gain or loss recognized on a
disqualifying disposition of the shares will be characterized as capital
gain or loss.
Restricted Stock. A Participant who is granted restricted
stock may make a Section 83(b) election to have the grant taxed as
compensation income at the date of receipt, with the result that any
future appreciation (or depreciation) in the value of the shares of stock
granted will be taxed as a capital gain (or loss) upon a subsequent sale
of the shares. However, if the Participant does not make a Section 83(b)
election, then the grant will be taxed as compensation income at the full
fair market value on the date that the restrictions imposed on the shares
expire. Unless a Participant makes a Section 83(b) election, any
dividends paid on stock subject to the restrictions are compensation
income to the Participant and compensation expense to the Company.
Subject to applicable provisions of the Code and regulations thereunder,
the Company will generally be entitled to an income tax deduction for any
compensation income taxed to the Participant.
Performance Units or Shares. A Participant who has been
granted a performance unit or share will not realize taxable income until
the applicable performance period expires and the Participant is in
receipt of the stock subject to the award or an equivalent amount of cash,
at which time the Participant will realize ordinary income equal to the
full fair market value of the shares delivered or the amount of cash paid.
Subject to applicable provisions of the Code and regulations thereunder,
at that time, the Company generally will be allowed a corresponding tax
deduction equal to the compensation taxable to the award recipient.
New Plan Benefits
The following table sets forth information with respect to the
grant of stock options to the Named Executive Officers, to all current
executive officers as a group and to all other (non-executive officer)
employees as a group, expected to be made by the Compensation Committee
following stockholder approval of the Incentive Plan:
<TABLE>
<CAPTION>
Katy Industries, Inc.
Long-Term Incentive Plan
Name of Individual or
Identity of Group and Position Number of Shares
Covered by Options Dollar Value ($)1
<S> <C> <C>
John R. Prann, Jr.
President, Director,
Chief Executive Officer
and Chief Operating Officer 15,000 --
Glenn W. Turcotte
Executive Vice President 8,000 --
Robert M. Baratta
Vice President 4,000 --
Michael G. Gordono
Vice President 4,000 --
Paul Kurowski
Chief Financial Officer,
Secretary and Treasurer 4,000 --
All current executive officers as a
group (5 persons) 35,000 --
All other (non-executive officer)
employees and other participants as
a group (13 persons) 25,000 --
____________________
1 All options will have an exercise price equal to the fair market
value on the date of grant and, therefore, do not have a readily
ascertainable value.
</TABLE>
Vote Required
Approval of the Incentive Plan requires the affirmative vote
of the holders of a majority of the shares of the Company's Common Stock
present in person, or by proxy, at the Annual Meeting.
Recommendation
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE INCENTIVE
PLAN IS IN THE BEST INTEREST OF THE COMPANY AND ALL STOCKHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE INCENTIVE
PLAN. Your proxy will be so voted unless you specify otherwise.
PROPOSAL TO APPROVE AND ADOPT THE KATY INDUSTRIES, INC.
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
Introduction
At the Annual Meeting, the Company's stockholders will be
requested to consider and act upon a proposal to approve and adopt an
incentive stock plan to be known as the Katy Industries, Inc. Nonemployee
Director Stock Option Plan (the "Directors' Stock Option Plan"). On April
21, 1995, subject to approval by stockholders, the Company's Board of
Directors adopted the Directors' Stock Option Plan. The Directors' Stock
Option Plan will have an effective date of June 1, 1995 if approved by the
Company's stockholders at the Annual Meeting and will terminate ten years
after its effective date. The purpose of the Directors' Stock Option Plan
is to promote the achievement of long-term objectives of the Company by
linking the personal interests of nonemployee directors to those of the
Company's stockholders and to attract and retain nonemployee directors of
outstanding qualifications. By increasing the stock ownership of the
Company's nonemployee directors, the interests of nonemployee directors
will be more closely aligned with the interests of the Company's
stockholders.
Plan Features
The principal features of the Directors' Stock Option Plan are
summarized below. The summary is qualified in its entirety by reference
to the full text of the Directors' Stock Option Plan attached as Appendix
II to this Proxy Statement.
Pursuant to the terms of the Directors' Stock Option Plan,
each person who is not an employee of the Company or a participant in the
Incentive Plan and who is elected or re-elected as a director of the
Company by the stockholders at any annual meeting of stockholders
(commencing with the 1995 Annual Meeting) shall receive, as of the date
immediately following the date of the annual meeting, a non-qualified
option to purchase 2,000 shares of the Company's Common Stock. Each such
option will have a ten-year term and will be exercisable beginning on the
date of grant at an option exercise price equal to 100 percent of the fair
market value of the shares of Common Stock on the date of grant. The
options will not be transferable except by will or the laws of descent and
distribution and may be exercised during an option holder's lifetime only
by him or her.
The Company will receive no consideration upon the grant of
options under the Directors' Stock Option Plan. The exercise price of an
option must be paid in full upon exercise. Payment may be made in cash,
check or, in whole or in part, in shares of Common Stock of the Company
already owned by the person exercising the option, valued at fair market
value.
The total number of shares of Common Stock of the Company that
may be subject to options issued pursuant to the Directors' Stock Option
Plan is 200,000. This number and the terms of outstanding options are
subject to automatic adjustment in the event of reorganization, merger,
consolidation, recapitalization, stock splits, combination or exchange of
shares, stock dividends or other similar events. The Board may from time
to time make such amendments to the Directors' Stock Option Plan as it may
deem proper and in the best interest of the Company without further
approval of the Company's stockholders, provided that to the extent
required to qualify transactions under the Directors' Stock Option Plan
for exemption under Rule 16b-3, no amendment to the Directors' Stock
Option Plan will be adopted without further approval of the Company's
stockholders. In addition, the Board may terminate the Directors' Stock
Option Plan at any time.
If the Directors' Stock Option Plan is approved by
stockholders, eight nonemployee directors will each receive on the day
immediately following the Annual Meeting a grant of a non-qualified option
to purchase 2,000 shares. See "New Plan Benefits" below.
Federal Tax Information
Under current law certain of the federal income tax
consequences to non-employee directors and the Company under the proposed
Directors' Stock Option Plan should generally be as follows: A director
to whom a non-qualified stock option is granted will not recognize income
at the time of grant of such option. When a director exercises the stock
option, the director will recognize ordinary compensation income equal to
the difference, if any, between the exercise price paid and the fair
market value, as of the date of option exercise, of the shares the
director receives. Subject to applicable provisions of the Code and
regulations thereunder, the Company will generally be entitled to a
federal income tax deduction in respect of non-qualified stock options in
an amount equal to the ordinary compensation income recognized by the
director as described above. The discussion set forth above does not
purport to be a complete analysis of the potential tax consequences
relevant to recipients of options or to the Company. The foregoing
discussion is based on federal income tax law and interpretational
authorities as of the date of this Proxy Statement, which are subject to
change at any time.
New Plan Benefits
The following table sets forth the number of shares of Common
Stock underlying the annual stock option grants beginning in 1995 to each
nonemployee director and all of the Company's non-employee directors as a
group. The table assumes that eight non-employee directors will each
receive a grant of an option to purchase 2,000 shares of Common Stock
immediately following the 1995 Annual Meeting.
<TABLE>
<CAPTION>
Katy Industries, Inc.
Non-Employee Director Stock Option Plan
Name of Individual and Group Number of Shares
Covered by Options Dollar Value ($)1
<S> <C> <C>
William F. Andrews 2,000 --
Daniel B. Carroll 2,000 --
Wallace E. Carroll, Jr. 2,000 --
Philip E. Johnson 2,000 --
William H. Murphy 2,000 --
Lutz R. Raettig 2,000 --
Charles W. Sahlman 2,000 --
Jacob Saliba 2,000 --
Non-Employee Director Group
(8 persons) 16,000 --
____________________
1 All options will have an exercise price equal to the fair market
value on the date of grant and, therefore, do not have a readily
ascertainable value.
</TABLE>
Vote Required for Approval
Approval of the Directors' Stock Option Plan requires the
affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present in person, or by proxy, at the Annual
Meeting.
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE
DIRECTORS' STOCK OPTION PLAN IS IN THE BEST INTEREST OF THE COMPANY AND
ALL STOCKHOLDERS AND, ACCORDINGLY, RECOMMENDS A VOTE FOR APPROVAL AND
ADOPTION OF THE DIRECTORS' STOCK OPTION PLAN. Your proxy will be so voted
unless you specify otherwise.
PROPOSAL TO APPROVE AND ADOPT THE
1994 KEY EMPLOYEE AND DIRECTOR STOCK PURCHASE PLAN
Introduction
In September, 1994, the Board of Directors of the Company
adopted, subject to stockholder approval, the Katy Industries, Inc. 1994
Key Employee and Director Stock Purchase Plan (the "Purchase Plan"). The
Purchase Plan was adopted to permit eligible key employees and directors
of the Company to purchase shares of the Company's Common Stock at sixty-
five percent (65%) of fair market value and, therefore, create an
immediate stockholder perspective in key management through ownership of
the Common Stock of the Company. Historically, members of management and
directors who were not members of the Carroll Family did not have
significant stock holdings in the Company. The Board of Directors adopted
the Purchase Plan to allow the Company to become more representative of
the vast majority of publicly-traded companies which have adopted plans
intended to facilitate stock ownership by management and directors.
The Board of Directors adopted the Purchase Plan to enable a
grant of purchase rights to be made to management and directors in late
1994. See "Purchase of Shares" below. The Board of Directors does not
intend to make any future awards under the Purchase Plan to management or
directors. Assuming stockholder approval of the Incentive Plan and
Directors' Stock Option Plan, all future stock-based awards will be made
under those plans. The Company is submitting the Purchase Plan for
stockholder approval at the Annual Meeting to satisfy the stockholder
approval requirements of the Exchange Act and the rules of the New York
Stock Exchange.
Set forth below is a summary of the principal features of the
Purchase Plan, which summary is qualified in its entirety by reference to
the full text of the Purchase Plan attached as Appendix III to this Proxy
Statement.
Shares Available for Purchase
The maximum number of shares of Common Stock available to
issue for purchase under the Purchase Plan is 75,000, all of which are
treasury shares. The maximum number of shares of Common Stock available
to issue for purchase under the Purchase Plan by all directors in the
aggregate is 52,000. Shares purchased under the Purchase Plan are
purchased from the Company, which receives the purchase price paid for the
shares of Common Stock. See "Purchase of Shares" below.
Eligibility
Key employees and directors of the Company or its subsidiaries
designated by the Board of Directors are eligible to participate in the
Purchase Plan. Under the terms of the Purchase Plan, the Board of
Directors designates the maximum number of shares available for purchase
for each participant.
Purchase of Shares
The right to purchase shares of Common Stock pursuant to the
Purchase Plan is made available during a sixty (60) day offering period
(the "Offering Period") established by the Compensation Committee. The
purchase price for shares of Common Stock elected to be purchased during
the Offering Period is equal to sixty-five percent (65%) of the Market
Value. "Market Value" is equal to the weighted mathematical average price
for all shares traded on the New York Stock Exchange for the five trading
days immediately preceding the commencement of the Offering Period.
The Offering Period established by the Compensation Committee
was from September 26, 1994 to November 25, 1994. Approximately 68,000
shares of Common Stock were offered during this period to fifteen (15)
officers and directors of the Company. During the Offering Period, 59,000
shares were purchased by twelve (12) of such persons. See "New Plan
Benefits" below.
Loans to Participants
Under the terms of the Purchase Plan, participants are
entitled to obtain a loan (a "Loan") from the Company in an amount equal
to the aggregate purchase price of shares to be purchased by such
participant. All Loans are due and payable in full upon demand, or if no
demand on the fifth anniversary of the date of the promissory note
evidencing the Loan unless expressly extended by the Company. Interest on
the principal amount of any Loan from time to time outstanding during the
year is due and payable semi-annually on June 30 and December 31 of each
year. Each Loan initially bears interest at a rate per annum equal to the
Applicable Federal Short-Term Rate, compounded semi-annually, in effect
for the month in which the Loan is initially made. The interest rate is
adjusted semi-annually on July 1 and January 1 to the Applicable Federal
Short-Term Rate in effect for the months of July and January,
respectively. Notwithstanding the foregoing, if a Participant ceases to
be an employee or director of the Company or a subsidiary for any reason
(other than death or disability), the interest rate increases to the Prime
Rate, as defined in the Purchase Plan, as of such date plus one percent
(1%), compounded semi-annually. "Applicable Federal Short-Term Rate" is
defined in the Purchase Plan as the applicable Federal short-term rate,
compounded semi-annually, provided by the Internal Revenue Service on a
monthly basis, as published in The Wall Street Journal. A participant is
permitted to repay the balance of any Loan outstanding without notice,
premium or penalty at any time.
In the event of the death of a participant before repayment in
full of the balance of any Loan, such participant's legal representative
has the option to participate in the Purchase Plan in lieu of the
participant, provided notice of the intent to participate is given to the
Company within six (6) months after the date of death of the participant;
otherwise the unpaid balance of such Loan becomes due and payable upon the
expiration of such six (6) month period.
All shares of Common Stock purchased by a participant pursuant
to the Purchase Plan, and the certificates representing such shares
(together with a stock power of attorney in blank to transfer the shares
signed by the participant with a medallion signature guarantee) are
immediately pledged with the Company as security for repayment of the
Loan. Notwithstanding the pledge of the shares, the participant is noted
on the records of the transfer agent as a stockholder of the number of
shares subscribed for by such participant and such participant is entitled
to receive all dividends or other distributions declared and paid thereon.
In the event of a failure by a participant to repay all or any portion of
the Loan upon demand or maturity, the Company shall be entitled to
repurchase the shares subject to the Loan at the Market Value (determined
based upon the weighted mathematical average of the trading price for
shares on the five trading days preceding the date of repurchase) or sell,
on the participant's behalf, in the open market and without further notice
to the participant, the shares of the participant pledged with the Company
as security and the net proceeds shall be applied to payment of interest
and principal then due and payable. The balance of the net proceeds in
excess of the amount required to repay all outstanding Loans shall be paid
promptly to the participant. In the event the net proceeds received by
the Company are not sufficient to repay all outstanding Loans of the
participant, the participant is required to pay to the Company the amount
of any deficiency within thirty (30) days after the Company gives written
notice of such deficiency to the participant.
All purchases by management and directors reported under "New
Plan Benefits" below were financed by such persons pursuant to Loans from
the Company on the terms described above. See also "Certain Relationships
and Related Transactions."
Election to Participate
Following the establishment of the Offering Period by the
Compensation Committee, the Company notified each participant of their
designation as a participant, the maximum shares available for purchase
and maximum available Loan. In order to participate, the participant was
required to execute and return to the Company a completed election form,
promissory note and stock power of attorney in the form furnished to such
participant by the Company.
Transferability
No right or interest of any participant in any of the shares
is assignable or transferable, in whole or in part, either directly or by
operation of law or otherwise in any manner, but excluding by operation of
the laws of descent and distribution, for a period of twenty-four (24)
months from the date of purchase; and the participant is not permitted to
mortgage, hypothecate, pledge or otherwise encumber the shares in respect
of which the related loan remains outstanding and which continue to be
pledged with the Company as security for repayment of such Loan.
Amendment, Termination and Adjustment
From time to time the Board of Directors may amend or waive
any provisions of the Purchase Plan but no amendment or waiver of the
Purchase Plan or any termination of the Purchase Plan shall adversely
affect the rights of any participant at the date of such amendment or
waiver pursuant to the terms of the Purchase Plan. The Board of Directors
may not, following initial stockholder approval of the Purchase Plan,
without further stockholder approval, amend the Purchase Plan to increase
the number of shares which may be issued under the Purchase Plan,
including the maximum number of shares available for purchase by
directors, or remove the authority of the Compensation Committee.
Subject to the foregoing, the Board of Directors may terminate
the Purchase Plan at any time, the effect of such termination being that
no further shares of Common Stock may be issued under the Purchase Plan
after such termination.
Administration
The Board of Directors designates eligible participants, the
number of shares of Common Stock such participant may purchase and the
maximum Loan available to such participant. All other aspects of the
Purchase Plan, including the designation of the Offering Period, are
administered by the Compensation Committee. The Compensation Committee
has full and final discretion to interpret the provisions of the Purchase
Plan. All decisions and interpretations made by the Compensation
Committee are binding and conclusive upon the participants and the
Company.
Federal Tax Information
The following discussion is intended only as a general summary
of certain of the federal income tax consequences arising from the
purchase of shares of Common Stock pursuant to the Purchase Plan and the
subsequent disposition of such shares.
The Purchase Plan is not intended to qualify as an "employee
stock purchase plan" as defined in Section 423 of the Code. Accordingly,
upon election to purchase shares of Common Stock under the Purchase Plan,
participants are taxed on the discount at purchase (measured by the
difference in the discounted purchase price and the fair market value of
the shares on the date of purchase) at ordinary income tax rates. The
Company is entitled to a deduction equal to the amount a participant
reports as ordinary income as a result of the purchase of shares.
Assuming compliance with the restrictions on transfer and that the
employee has held the shares for two years prior to sale, if a participant
sells shares the participant will be taxed at capital gains rates on the
difference between the sales price and the fair market value on the
original purchase date. Any dividends paid on shares must be reported as
ordinary income in the year paid. The Loans will bear interest at an
adjustable rate so that the outstanding amounts will bear interest at all
times at or above the applicable Federal rate. Accordingly, participants
should not be required to recognize any compensation income based upon the
interest rate payable on the Loans.
New Plan Benefits
The following table sets forth the shares of Common Stock
purchased by the named Executive Officers, by all current executive
officers as a group, all directors and all directors as a group. The
participants in the Purchase Plan include only executive officers and
directors.
<TABLE>
<CAPTION>
Katy Industries, Inc.
1994 Key Employee and Director Stock Purchase Plan
Name of Individual or
Identity of Group and Position Number of
Shares
Purchased Dollar Value
($)1 Loan Amount2
<S> <C> <C> <C>
John R. Prann, Jr.
President, Chief Executive
Officer, Chief Operating
Officer and Director 15,000 $49,200 $97,050
Glenn W. Turcotte
Executive Vice President 8,000 $26,240 $51,760
Robert M. Baratta
Vice President 5,000 $16,400 $32,350
Michael G. Gordono
Vice President 5,000 $16,400 $32,350
Paul Kurowski
Chief Financial Officer,
Secretary and Treasurer 5,000 $16,400 $32,350
William F. Andrews
Director 3,000 $ 9,840 $19,410
Daniel B. Carroll
Director 3,000 $ 9,840 $19,410
Arthur R. Miller
Director 3,000 $ 6,840 $19,410
William H. Murphy
Director 3,000 $ 9,840 $19,410
Lutz R. Raettig
Director 3,000 $ 9,840 $19,410
Charles W. Sahlman
Director 3,000 $ 9,840 $19,410
Jacob Saliba
Director 3,000 $ 9,840 $19,410
All current executive officers
as a group (5 persons) 38,000 $124,640 $245,860
All nonemployee directors as a
group (7 persons) 21,000 $65,880 $135,870
____________________
1 Dollar value is based upon the number of shares purchased multiplied
by the difference, adjusted for rounding, between (i) the fair
market value of the shares purchased on the date of purchase and
(ii) the discount purchase price pursuant to the terms of the
Purchase Plan.
2 Loan amount reflects principal balance of the Loan incurred by
Participant to purchase shares pursuant to the terms of the Purchase
Plan.
</TABLE>
Vote Required
Approval and adoption of the Purchase Plan requires the
affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present in person, or by proxy, at the Annual
Meeting.
THE BOARD OF DIRECTORS BELIEVES APPROVAL OF THE PURCHASE PLAN
IS IN THE BEST INTERESTS OF THE COMPANY AND ALL STOCKHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE PURCHASE
PLAN. Your proxy will be so voted unless you specify otherwise.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP to
audit the accounts of the Company for the current fiscal year. Deloitte
& Touche LLP was the firm of independent auditors selected by the Board of
Directors to audit the accounts of the Company for the 1994 and 1993
fiscal years. Deloitte & Touche, which has no other relationship with the
Company, also serves as independent auditors for other corporations owned
by Carroll Family interests. It is intended that the shares represented
by proxies will be voted FOR the ratification of the selection of Deloitte
& Touche unless otherwise specified in the space provided in the proxy.
In the event that the stockholders fail to ratify the selection of
Deloitte & Touche LLP as independent auditors of the Company for the
current year, the Board of Directors would reconsider such selection.
A representative of Deloitte & Touche LLP is expected to be
present at the Annual Meeting, with the opportunity to make a statement if
so desired and to answer appropriate questions from the floor.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors
does not know of any matters to be presented to the meeting other than the
election of directors and the ratification of independent auditors.
However, if other matters come before the meeting, it is the intention of
the persons named on the accompanying proxy to vote on such matters in
accordance with their best judgment.
PROPOSALS OF STOCKHOLDERS FOR 1996 ANNUAL MEETING
Proposals which stockholders intend to present at the 1996
Annual Meeting of Stockholders must be received by the Secretary of the
Company at its executive offices, 6300 S. Syracuse Way, Suite 300,
Englewood, Colorado 80111, not later than December 8, 1995 to be
considered for inclusion in the proxy materials for the 1996 Annual
Meeting.
By Order of the Board of
Directors
KATY INDUSTRIES, INC.
Paul Kurowski
Secretary
May 8, 1995
THIS PAGE
INTENTIONALLY
LEFT BLANK
APPENDIX I
Katy Industries, Inc.
Long-Term Incentive Plan
Article 1. Establishment, Objectives, and Duration
1.1 Establishment of the Plan. Katy Industries, Inc., a Delaware
corporation (hereinafter referred to as the Company ), hereby establishes
an incentive compensation plan to be known as the Katy Industries, Inc.
Long-Term Incentive Plan (hereinafter referred to as the Plan ), as set
forth in this document. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares and Performance Units, and Other Incentive
Awards.
Subject to approval by the Company's stockholders, the Plan shall
become effective as of January 1, 1995 (the Effective Date ) and shall
remain in effect as provided in Section 1.3 hereof.
1.2 Objectives of the Plan. The objectives of the Plan are to
optimize the profitability and growth of the Company through incentives
which are consistent with the Company's goals and which link the personal
interests of Participants to those of the Company's stockholders; to
provide Participants with an incentive for excellence in individual
performance; and to promote teamwork among Participants.
The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services
of Participants who make significant contributions to the Company's
success and to allow Participants to share in the success of the Company.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect,
subject to the right of the Board of Directors to amend or terminate the
Plan at any time pursuant to Article 16 hereof, until all Shares subject
to it shall have been purchased or acquired according to the Plan's
provisions. However, in no event may an Award be granted under the Plan on
or after December 31, 2004.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of
the word shall be capitalized:
2.1 Award means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares or Performance
Units, or Other Incentive Awards.
2.2 Award Agreement means an agreement entered into by the Company
and each Participant setting forth the terms and provisions applicable to
Awards granted under this Plan.
2.3 Beneficial Owner or Beneficial Ownership shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.
2.4 Board or Board of Directors means the Board of Directors of the
Company.
2.5 Change in Control of the Company means, and shall be deemed to
have occurred upon, any of the following events:
(a) Any Person (other than those Persons in control of the
Company as of the Effective Date, or other than a trustee
or other fiduciary holding securities under an employee
benefit plan of the Company, or a corporation owned
directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of
stock of the Company) becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of the combined
voting power of the Company's then outstanding securities;
or
(b) During any period of two (2) consecutive years (not
including any period prior to the Effective Date),
individuals who at the beginning of such period constitute
the Board (and any new Director, whose election by the
Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or
whose election or nomination for election was so approved),
cease for any reason to constitute a majority thereof; or
(c) The stockholders of the Company approve: (i) a plan of
complete liquidation of the Company; or (ii) an agreement
for the sale or disposition of all or substantially all the
Company's assets; or (iii) a merger, consolidation, or
reorganization of the Company with or involving any other
corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities
of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving
entity) at least fifty percent (50%) of the combined voting
power of the voting securities of the Company (or such
surviving entity) outstanding immediately after such
merger, consolidation, or reorganization.
However, in no event shall a Change in Control be deemed to have
occurred, with respect to a Participant, if the Participant is part of a
purchasing group which consummates the Change-in-Control transaction. A
Participant shall be deemed part of a purchasing group for purposes of
the preceding sentence if the Participant is an equity participant in the
purchasing company or group (except for: (i) passive ownership of less
than one percent (1%) of the stock of the purchasing company; or
(ii) ownership of equity participation in the purchasing company or group
which is otherwise not significant, as determined prior to the Change in
Control by a majority of the nonemployee continuing Directors).
2.6 Code means the Internal Revenue Code of 1986, as amended from
time to time.
2.7 Committee means the Compensation Committee of the Board, as
specified in Article 3 herein.
2.8 Company means Katy Industries, Inc., a Delaware corporation, and
the Company's Subsidiaries, as well as any successor to any of such
entities as provided in Article 19 herein.
2.9 Director means any individual who is a member of the Board of
Directors of the Company.
2.10 Disability shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan.
2.11 Effective Date shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.12 Employee means any nonunion employee of the Company.
Nonemployee Directors shall not be considered Employees under this Plan
unless specifically designated otherwise.
2.13 Exchange Act means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.14 Fair Market Value shall be determined on the basis of the
closing sale price on the principal securities exchange on which the
Shares are publicly traded or, if there is no such sale on the relevant
date, then on the last previous day on which a sale was reported.
2.15 Freestanding SAR means an SAR that is granted independently of
any Options, as described in Article 7 herein.
2.16 Incentive Stock Option or ISO means an option to purchase
Shares granted under Article 6 herein and which is designated as an
Incentive Stock Option and which is intended to meet the requirements of
Code Section 422.
2.17 Insider shall mean an individual who is, on the relevant date,
an officer, director or ten percent (10%) beneficial owner of any class of
the Company's equity securities that is registered pursuant to Section 12
of the Exchange Act, all as defined under Section 16 of the Exchange Act.
2.18 Named Executive Officer means a Participant who, as of the date
of vesting and/or payout of an Award, as applicable, is one of the group
of covered employees, as defined in the regulations promulgated under
Code Section 162(m), or any successor statute.
2.19 Nonemployee Director means an individual who is a member of the
Board of Directors of the Company but who is not an Employee of the
Company.
2.20 Nonqualified Stock Option or NQSO means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet
the requirements of Code Section 422.
2.21 Option means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.
2.22 Option Price means the price at which a Share may be purchased
by a Participant pursuant to an Option.
2.23 Other Incentive Award means an award granted pursuant to
Article 10 hereof.
2.24 Participant means any individual designated as a participant
in the Plan by the Committee in accordance with Section 5.1 and who has an
outstanding Award granted under the Plan.
2.25 Performance-Based Exception means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.26 Performance Period means the time period during which
performance goals must be achieved with respect to an Award, as determined
by the Committee.
2.27 Performance Share means an Award granted to a Participant, as
described in Article 9 herein.
2.28 Performance Unit means an Award granted to a Participant, as
described in Article 9 herein.
2.29 Period of Restriction means the period during which the
transfer of Shares of Restricted Stock is limited in some way (based on
the passage of time, the achievement of performance goals, or upon the
occurrence of other events as determined by the Committee, at its
discretion), and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 8 herein.
2.30 Person shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a group as defined in Section 13(d) thereof.
2.31 Restricted Stock means an Award granted to a Participant
pursuant to Article 8 herein.
2.32 Retirement shall have the meaning ascribed to such term in the
Participant's governing Company sponsored retirement plan.
2.33 Shares means the shares of Common Stock, par value $1.00 per
share, of the Company.
2.34 Stock Appreciation Right or SAR means an Award, granted alone
or in connection with a related Option, designated as an SAR, pursuant to
the terms of Article 7 herein.
2.35 Subsidiary means any corporation, partnership, joint venture,
affiliate, or other entity in which the Company has a majority voting
interest, and which the Committee designates as a participating entity in
the Plan.
2.36 Tandem SAR means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall
require forfeiture of the right to purchase a Share under the related
Option (and when a Share is purchased under the Option, the Tandem SAR
shall similarly be canceled).
Article 3. Administration
3.1 The Committee. The Plan shall be administered by the
Compensation Committee of the Board, or by any other Committee appointed
by the Board consisting of not less than two (2) Directors who meet the
disinterested administration rules of Rule 16b-3 under the Exchange Act
and the definition of outside director within the meaning of
Section 162(m) of the Code and the rules and regulations thereunder ( Code
Section 162(m) ). The members of the Committee shall be appointed from time
to time by, and shall serve at the discretion of, the Board of Directors.
The Committee shall be comprised solely of Directors who are eligible
to administer the Plan pursuant to Rule 16b-3 under the Exchange Act and
Code Section 162(m). However, if for any reason the Committee does not
qualify to administer the Plan as contemplated by Rule 16b-3 and Code
Section 162(m) of the Exchange Act, the Board of Directors may appoint a
new Committee so as to comply with Rule 16b-3 and Code Section 162(m).
3.2 Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees
and other key individuals performing services for the Company who shall
participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with
the Plan; construe and interpret the Plan and any agreement or instrument
entered into under the Plan; establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions
of Article 16 herein) amend the terms and conditions of any outstanding
Award to the extent such terms and conditions are within the discretion of
the Committee as provided in the Plan. Further, the Committee shall make
all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may
delegate its authority as identified herein.
The Committee may act only by a majority of its members in office,
except that the members thereof may authorize any one or more of their
members or any officer of the Company to execute and deliver documents or
to take any other ministerial action on behalf of the Committee with
respect to Awards made or to be made to Plan Participants.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders
and resolutions of the Board shall be final, conclusive and binding on all
persons, including the Company, its stockholders, Employees, Participants,
and their estates and beneficiaries.
Article 4. Shares Subject to the Plan and Maximum Awards
4.1 Number of Shares Available for Grants. Subject to adjustment as
provided in Section 4.3 herein, the number of Shares hereby reserved for
issuance under the Plan shall be 500,000; provided however, that the
aggregate maximum number of Shares of Restricted Stock and Shares relating
to Other Incentive Awards which may be granted pursuant to Articles 8 and
10 herein, shall be 200,000. Shares issued pursuant to the Plan may be
either authorized unissued shares, treasury shares, reacquired shares, or
any combination thereof.
Unless and until the Committee determines that an Award to a Named
Executive Officer shall not be designed to comply with the Performance-
Based Exception, the following rules shall apply to grants of such Awards
under
the Plan:
(a) The maximum aggregate number of Shares that may be granted or
that may vest, as applicable, pursuant to any Award held by any
Named Executive Officer shall be 100,000 Shares.
(b) The maximum aggregate cash payout with respect to Awards granted
in any fiscal year which may be made to any Named Executive
Officer shall be $500,000.
4.2 Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem
SAR), any Shares subject to such Award again shall be available for the
grant of an Award under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the
definition of such term in Code Section 368) or any partial or complete
liquidation of the Company, such adjustment shall be made in the number
and class of Shares which may be delivered under Section 4.1 herein and in
the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares
subject to any Award shall always be a whole number.
Article 5. Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in this Plan include
all officers, key employees of the Company and other key individuals
performing services for the Company, as determined by the Committee,
including Employees and other key individuals who are members of the Board
and Employees who reside in countries other than the United States of
America. Notwithstanding the foregoing, no person who is a Director and is
also a participant in any stock option plan of the Company exclusively for
Nonemployee Directors shall be eligible to participate in the Plan.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees and
other key individuals performing services for the Company, those to whom
Awards shall be granted and shall determine the nature and amount of each
Award.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option,
the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine. The Option Agreement also
shall specify whether the Option is intended to be an ISO within the
meaning of Code Section 422, or an NQSO whose grant is intended not to
fall under the provisions of Code Section 422.
6.3 Option Price. The Option Price for each grant of an Option under
this Plan shall be at least equal to one hundred percent (100%) of the
Fair Market Value of a Share on the date the Option is granted. Except,
however, the Option Price for each grant of an ISO under this Plan to an
Employee who owns more than ten percent (10%) of the combined voting power
of all classes of stock of the Company on the date the ISO is granted
shall be equal to one hundred and ten percent (110%) of the Fair Market
Value of a Share on the date the Option is granted.
6.4 Duration of Options. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than the
tenth (10th) anniversary date of its grant. Except, however, no ISO
granted to an Employee who owns more than ten percent (10%) of the
combined voting power of all classes of stock of the Company on the date
the Incentive Stock Option is granted shall be exercisable later than the
fifth (5th) anniversary date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall
be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not
be the same for each grant or for each Participant.
6.6 Payment. Options granted under this Article 6 shall be exercised
by the delivery of a written notice of exercise to the Company, setting
forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the total Option Price (provided that the Shares
which are tendered must have been held by the Participant for at least six
(6) months prior to their tender to satisfy the Option Price), or (c) by
a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant,
in the Participant's name, Share certificates in an appropriate amount
based upon the number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an
Option granted under this Article 6 as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities laws,
under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, and under any blue sky or state
securities laws applicable to such Shares.
6.8 Termination of Employment. Each Participant's Option Award
Agreement shall set forth the extent to which the Participant shall have
the right to exercise the Option following termination of the
Participant's employment with the Company and/or its Subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for
termination of employment.
6.9 Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, all ISOs granted to a Participant under
the Plan shall be exercisable during his or her lifetime only by
such Participant.
(b) Nonqualified Stock Options. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article
6 may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, except as otherwise provided
in a Participant's Award Agreement, all NQSOs granted to a
Participant under this Article 6 shall be exercisable during his
or her lifetime only by such Participant.
6.10 Maximum Amount of Incentive Stock Option Award. The aggregate
Fair Market Value (as of the date of grant of an Incentive Stock Option)
of Shares with respect to which Incentive Stock Options granted to an
Employee under this Plan are exercisable for the first time by an Employee
in any calendar year shall not exceed one hundred thousand dollars
($100,000.00).
Article 7. Stock Appreciation Rights
7.1 Grant of SARs. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee may grant Freestanding
SARs, Tandem SARs, or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number
of SARs granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market
Value of a Share on the date of grant of the SAR. The grant price of
Tandem SARs shall equal the Option Price of the related Option.
7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem
SAR may be exercised only with respect to the Shares for which its related
Option is then exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem
SAR will expire no later than the expiration of the underlying ISO; (ii)
the value of the payout with respect to the Tandem SAR may be for no more
than one hundred percent (100%) of the difference between the Option Price
of the underlying ISO and the Fair Market Value of the Shares subject to
the underlying ISO at the time the Tandem SAR is exercised; and (iii) the
Tandem SAR may be exercised only when the Fair Market Value of the Shares
subject to the ISO exceeds the Option Price of the ISO.
7.3 Exercise of Freestanding SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them.
7.4 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and
such other provisions as the Committee shall determine.
7.5 Term of SARs. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however,
that such term shall not exceed ten (10) years.
7.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount
determined by multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.
7.7 Rule 16b-3 Requirements. Notwithstanding any other provision of
the Plan, the Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit the
time of exercise to specified periods) as may be required to satisfy the
requirements of Section 16 of the Exchange Act (or any successor rule).
7.8 Termination of Employment. Each SAR Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise
the SAR following termination of the Participant's employment with the
Company and/or its Subsidiaries. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award
Agreement entered into with Participants, need not be uniform among all
SARs issued pursuant to the Plan, and may reflect distinctions based on
the reasons for termination of employment.
7.9 Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further,
except as otherwise provided in a Participant's Award Agreement, all SARs
granted to a Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant.
Article 8. Restricted Stock
8.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant
Shares of Restricted Stock to Participants in such amounts as the
Committee shall determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by an Award Agreement that shall specify the Period(s) of
Restriction, the number of Shares of Restricted Stock granted, and such
other provisions as the Committee shall determine.
8.3 Transferability. Except as provided in this Article 8, the Shares
of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Committee and
specified in the Restricted Stock Award Agreement, or upon earlier
satisfaction of any other conditions, as specified by the Committee in its
sole discretion and set forth in the Restricted Stock Agreement. All
rights with respect to the Restricted Stock granted to a Participant under
the Plan shall be available during his or her lifetime only to such
Participant.
8.4 Other Restrictions. Subject to Article 11 herein, the Committee
may impose such other conditions and/or restrictions on any Shares of
Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, a requirement that Participants pay a
stipulated purchase price for each Share of Restricted Stock, restrictions
based upon the achievement of specific performance goals (Company-wide,
divisional, and/or individual), time-based restrictions on vesting
following the attainment of the performance goals, and/or restrictions
under applicable Federal or state securities laws.
The Company shall retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares have been
satisfied.
Except as otherwise provided in this Article 8, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall
become freely transferable by the Participant after the last day of the
applicable Period of Restriction.
8.5 Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares.
8.6 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted
hereunder may be credited with regular cash dividends paid with respect to
the underlying Shares while they are so held. The Committee may apply any
restrictions to the dividends that the Committee deems appropriate.
In the event that any dividend constitutes a derivative security or
an equity security pursuant to Rule 16(a) under the Exchange Act, such
dividend shall be subject to a vesting period equal to the remaining
vesting period of the Shares of Restricted Stock with respect to which the
dividend is paid.
8.7 Termination of Employment. Each Restricted Stock Award Agreement
shall set forth the extent to which the Participant shall have the right
to receive unvested Restricted Shares following termination of the
Participant's employment with the Company and/or its Subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock
issued pursuant to the Plan, and may reflect distinctions based on the
reasons for termination of employment; provided, however that, except in
the cases of terminations connected with a Change in Control and
terminations by reason of death or Disability, the vesting of Shares of
Restricted Stock which qualify for the Performance-Based Exception and
which are held by Named Executive Officers shall occur at the time they
otherwise would have, but for the employment termination.
Article 9. Performance Units and Performance Shares
9.1 Grant of Performance Units/Shares. Subject to the terms of the
Plan, Performance Units and/or Performance Shares may be granted to
Participants in such amounts and upon such terms, and at any time and from
time to time, as shall be determined by the Committee.
9.2 Value of Performance Units/Shares. Each Performance Unit shall
have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value equal to the
Fair Market Value of a Share on the date of grant. The Committee shall set
performance goals in its discretion which, depending on the extent to
which they are met, will determine the number and/or value of Performance
Units/Shares that will be paid out to the Participant. For purposes of
this Article 9, the time period during which the performance goals must be
met shall be called a Performance Period.
9.3 Earning of Performance Units/Shares. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number
and value of Performance Units/Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved.
9.4 Form and Timing of Payment of Performance Units/ Shares. Payment
of earned Performance Units/Shares shall be made in a single lump sum
within seventy-five (75) calendar days following the close of the
applicable Performance Period. Subject to the terms of this Plan, the
Committee, in its sole discretion, may pay earned Performance Units/Shares
in the form of cash or in Shares (or in a combination thereof) which have
an aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares at the close of the applicable Performance
Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee.
Prior to the beginning of each Performance Period, Participants may
elect to defer the receipt of Performance Unit/Share payout upon such
terms as the Committee deems appropriate.
At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Shares which have been
earned in connection with grants of Performance Units and/or Performance
Shares which have been earned, but not yet distributed to Participants
(such dividends shall be subject to the same accrual, forfeiture, and
payout restrictions as apply to dividends earned with respect to Shares of
Restricted Stock, as set forth in Section 8.6 herein). In addition,
Participants may, at the discretion of the Committee, be entitled to
exercise their voting rights with respect to such Shares.
9.5 Termination of Employment Due to Death, Disability, or
Retirement. In the event the employment of a Participant is terminated by
reason of death, Disability, or Retirement during a Performance Period,
the Participant shall receive a prorated payout of the Performance
Units/Shares. The prorated payout shall be determined by the Committee, in
its sole discretion, shall be based upon the length of time that the
Participant held the Performance Units/Shares during the Performance
Period, and shall further be adjusted based on the achievement of the
preestablished performance goals.
Payment of earned Performance Units/Shares shall be made at the same
time as payments are made to Participants who did not terminate employment
during the applicable Performance Period.
9.6 Termination of Employment for Other Reasons. In the event that a
Participant's employment terminates for any reason other than those
reasons set forth in Section 9.5 herein, all Performance Units/Shares
shall be forfeited by the Participant to the Company.
9.7 Nontransferability. Except as otherwise provided in a
Participant's Award Agreement, Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further,
except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
Article 10. Other Incentive Awards
10.1 Grant of Other Incentive Awards. Subject to the terms and
provisions of the Plan, Other Incentive Awards may be granted to
Participants in such amount, upon such terms, and at any time and from
time to time as shall be determined by the Committee.
10.2 Other Incentive Award Agreement. Each Other Incentive Award grant
shall be evidenced by an Award Agreement that shall specify the amount of
the Other Incentive Award granted, the terms and conditions applicable to
such grant, the applicable Performance Period and performance goals, and
such other provisions as the Committee shall determine, subject to the
terms and provisions of the Plan.
10.3 Nontransferability. Except as otherwise provided in a
Participant's Award Agreement, Other Incentive Awards may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution.
10.4 Form and Timing of Payment of Other Incentive Awards. Payment of
Other Incentive Awards shall be made at such times and in such form,
either in cash or in Shares (or a combination thereof) as established by
the Committee subject to the terms of the Plan. Such Shares may be granted
subject to any restrictions deemed appropriate by the Committee. Without
limiting the generality of the foregoing, annual incentive awards may be
paid in the form of Other Incentive Awards (which may or may not be
subject to restrictions, at the discretion of the Committee).
Article 11. Performance Measures
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set
forth in this Article 11, the attainment of which may determine the degree
of payout and/or vesting with respect to Awards to Named Executive
Officers which are designed to qualify for the Performance-Based
Exception, the performance measure(s) to be used for purposes of such
grants shall be chosen from among the following alternatives:
(a) Return on Assets ( ROA );
(b) Cash Flow Return on Investment ( CFROI );
(c) Earnings Before Income Taxes ( EBIT ); or
(d) Net Earnings.
The Committee shall have the discretion to adjust the determinations
of the degree of attainment of the preestablished performance goals;
provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, and which are held by Named Executive
Officers, may not be adjusted upward (the Committee shall retain the
discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures
without obtaining shareholder approval of such changes, the Committee
shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Committee
determines that it is advisable to grant Awards which shall not qualify
for the Performance-Based Exception, the Committee may make such grants
without satisfying the requirements of Code Section 162(m).
Article 12. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of
his or her death before he or she receives any or all of such benefit.
Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Company
during the Participant's lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate.
Article 13. Deferrals
The Committee may permit a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would
otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Stock, or the satisfaction of any requirements or goals with
respect to Performance Units/Shares or Other Incentive Awards. If any such
deferral election is required or permitted, the Committee shall, in its
sole discretion, establish rules and procedures for such payment
deferrals.
Article 14. Rights of Employees
14.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the
employ of the Company.
For purposes of this Plan, a transfer of a Participant's employment
between
the Company and a Subsidiary, or between Subsidiaries, shall not be deemed
to be a termination of employment. Upon such a transfer, the Committee may
make such adjustments to outstanding Awards as it deems appropriate to
reflect the changed reporting relationships.
14.2 Participation. No Employee shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
Article 15. Change in Control
15.1 Treatment of Outstanding Awards. Upon the occurrence of a Change
in Control, unless otherwise specifically prohibited under applicable
laws, or by the rules and regulations of any governing governmental
agencies or national securities exchanges:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable
throughout their entire term;
(b) Any restriction periods and restrictions imposed on
Restricted Shares shall lapse;
(c) The target payout opportunities attainable under all
outstanding Awards of Performance Units and Performance
Shares and Other Incentive Awards shall be deemed to have
been fully earned for the entire Performance Period(s) as of
the effective date of the Change in Control. The vesting of
all such Awards shall be accelerated as of the effective
date of the Change in Control, and there shall be paid out
in cash to Participants within thirty (30) days following
the effective date of the Change in Control a pro rata
portion of all targeted Award opportunities associated with
such outstanding Awards, based on the number of complete and
partial calendar months within the Performance Period which
had elapsed as of such effective date; and
(d) Subject to Article 16 herein, the Committee shall have the
authority
to make any modifications to the Awards as determined by the
Committee to be appropriate before the effective date of the
Change in Control.
15.2 Termination, Amendment, and Modifications of Change-in-Control
Provisions. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 15 may not be
terminated, amended, or modified on or after the date of a Change in
Control to affect adversely any Award theretofore granted under the Plan
without the prior written consent of the Participant with respect to said
Participant's outstanding Awards; provided, however, the Board of
Directors, upon recommendation of the Committee, may terminate, amend, or
modify this Article 15 at any time and from time to time prior to the date
of a Change in Control.
Article 16. Amendment, Modification, and Termination
16.1 Amendment, Modification, and Termination. The Board may at any
time and from time to time, alter, amend, suspend or terminate the Plan in
whole or in part; provided, however, that no amendment which requires
shareholder approval in order for the Plan to continue to comply with
Rule 16b-3 under the Exchange Act, including any successor to such Rule,
shall be effective unless such amendment shall be approved by the
requisite vote of shareholders of the Company entitled to vote thereon.
The Committee shall not have the authority to cancel outstanding
Awards and issue substitute Awards in replacement thereof.
16.2 Awards Previously Granted. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any
Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
16.3 Compliance with Code Section 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall
comply with the requirements of Code Section 162(m); provided, however,
that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the
Plan, then compliance with Code Section 162(m) will not be required. In
addition, in the event that changes are made to Code Section 162(m) to
permit greater flexibility with respect to any Award or Awards available
under the Plan, the Committee may, subject to this Article 16, make any
adjustments it deems appropriate.
Article 17. Withholding
17.1 Tax Withholding. The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy Federal, state, and local taxes, domestic
or foreign, required by law or regulation to be withheld with respect to
any taxable event arising as a result of this Plan.
17.2 Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards
granted hereunder, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date
the tax is to be determined equal to the minimum statutory total tax which
could be imposed on the transaction. All such elections shall be
irrevocable, made in writing, signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.
Article 18. Financial Assistance
If the Committee determines that such action is advisable, the Company
may assist any person to whom an Award has been granted in obtaining
financing from the Company (or under any program of the Company approved
pursuant to applicable law), or from a bank or other third party, on such
terms as are determined by the Committee, and in such amount as is
required to accomplish the purposes of the Plan, including, but not
limited to, to permit the exercise of an Award, the participation therein,
and/or the payment of any taxes in respect thereof. Such assistance may
take any form that the Committee deems appropriate, including, but not
limited to, a direct loan from the Company, a guarantee of the obligation
by the Company, or the maintenance by the Company of deposits with such
bank or third party.
Article 19. Indemnification
Each person who is or shall have been a member of the Committee, or
of the Board, shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan and against and from any and all amounts
paid by him or her in settlement thereof, with the Company's approval, or
paid by him or her in satisfaction of any judgement in any such action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation of Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
Article 20. Successors
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
Article 21. Legal Construction
21.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.
21.2 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
21.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
21.4 Securities Law and Tax Law Compliance. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions or Rule 16b-3 or its successors under the 1934 Act and Code
Section 162(m). To the extent any provision of the plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
21.5 Stockholder Adoption. This Plan shall be submitted to the
stockholders of the Company, for their approval and adoption in accordance
with applicable law and Rule 16b-3 under the Exchange Act and Code
Section 162(m). All Awards made hereunder prior to stockholder approval
shall be granted contingent upon such approval. If this Plan is not so
approved and adopted by stockholders, all Awards granted hereunder shall
be null and void.
21.6 Governing Law. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of Delaware.
APPENDIX II
Katy Industries, Inc.
Nonemployee Director Stock Option Plan
Article 1. Establishment, Purpose, and Duration
1.1 Establishment of the Plan. Katy Industries, Inc., a Delaware
corporation (the Company ), hereby establishes an incentive compensation
plan to be known as the Katy Industries, Inc. Nonemployee Director Stock
Option Plan (the Plan ), as set forth in this document. The Plan permits
the grant of Nonqualified Stock Options, subject to the terms and pro-
visions set forth herein.
Subject to approval by the Company's stockholders, the Plan shall
become effective as of June 1, 1995 (the Effective Date ), and shall
remain in effect as provided in Section 1.3 hereof.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
achievement of long-term objectives of the Company by linking the personal
interests of Nonemployee Directors to those of Company shareholders, and
to attract and retain Nonemployee Directors of outstanding competence.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Article 7 herein,
until all Shares subject to it shall have been purchased or acquired
according to the Plan's provisions. However, in no event may an Option be
granted under the Plan on or after May 31, 2005.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of
the word is capitalized:
(a) Beneficial Owner shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the
Exchange Act.
(b) Board or Board of Directors means the Board of Directors of
the Company.
(c) Code means the Internal Revenue Code of 1986, as amended from
time to time.
(d) Company means Katy Industries, Inc., a Delaware corporation.
(e) Director means any individual who is a member of the Board of
Directors of the Company.
(f) Disability shall have the meaning ascribed in the Company's
governing long-term disability plan or if no plan is then in
effect, shall mean the determination by the Board that the
physical or mental condition of a Participant renders such
Participant unable to carry out the duties and obligations as a
Director of the Company; provided, however, that Disability shall
mean a permanent and total disability, within the meaning of Code
Section 22(e)(3) if required, to satisfy the formula plan
exception under Rule 16b-3(c)(2)(i)(A) of Section 16 of the
Exchange Act.
(g) Employee means any nonunion employee of the Company or of the
Company's Subsidiaries. For purposes of the Plan, an individual
whose only employment relationship with the Company is as a
Director or Chairman of the Board, shall not be deemed to be an
Employee.
(h) Exchange Act means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(i) Fair Market Value shall be determined on the basis of the closing
sale price on the principal securities exchange on which the
Shares are publicly traded or, if there is no such sale on the
relevant date, then on the last previous day on which a sale was
reported.
(j) Nonemployee Director means an individual who is a member of the
Board of Directors of the Company, but who is not an Employee of
the Company or a participant in the Company's Long-Term Incentive
Plan.
(k) Nonqualified Stock Option, NQSO, or Option means an option to
purchase Shares, granted under Article 6 herein.
(l) Option Agreement means an agreement entered into by and between
the Company and a Nonemployee Director, setting forth the terms
and provisions applicable to an Option granted under the Plan.
(m) Option Price means the price at which a Share may be purchased
pursuant to an Option.
(n) Participant means a Nonemployee Director of the Company who has
an outstanding Option granted under the Plan.
(o) Person shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a group as defined in Section 13(d).
(p) Shares means the shares of Common Stock of the Company.
(q) Subsidiary means any corporation, partnership, joint venture,
affiliate, or other entity on which the Company has a majority
voting interest.
Article 3. Administration
3.1 The Board of Directors. The Plan shall be administered by the
Board of Directors of the Company, subject to the restrictions set forth
in the Plan.
3.2 Administration by the Board. The Board shall have the full power,
discretion, and authority to interpret and administer the Plan in a manner
which is consistent with the Plan's provisions. However, in no event shall
the Board have the power to determine Plan eligibility, or to determine
the number, the value, the vesting period, or the timing of Options to be
made under the Plan (all such determinations are automatic pursuant to the
provisions of the Plan).
3.3 Decisions Binding. All determinations and decisions made by the
Board pursuant to the provisions of the Plan, and all related orders or
resolutions of the Board shall be final, conclusive, and binding on all
persons, including the Company, its stockholders, employees, Participants,
and their estates and beneficiaries.
Article 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in
Section 4.3 herein, the total number of Shares available for grant under
the Plan may not exceed two hundred thousand (200,000). The grant of an
Option shall reduce the Shares available for grant under the Plan by the
number of Shares subject to such Option.
4.2 Lapsed Awards. If any Option granted under the Plan terminates,
expires, or lapses for any reason, any Share underlying such Option again
shall be available for grant under the Plan at the discretion of the
Company. However, in the event that prior to the Option's termination,
expiration, or lapse, the holder of the Option at any time received one or
more benefits of ownership pursuant to such Option (as defined by the
Securities and Exchange Commission, pursuant to any rule or interpretation
promulgated under Section 16 of the Exchange Act), the Shares subject to
such Option shall not be made available for regrant under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation,
stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Board may
make such adjustments to outstanding Options as may be determined to be
appropriate and equitable by the Board, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that no such
adjustment shall be made if the adjustment may cause the Plan to fail to
comply with the formula award exception for grants of Options to
Directors.
Article 5. Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in the Plan are
limited to Nonemployee Directors who are serving on the Board on the date
of each scheduled grant under the Plan.
5.2 Actual Participation. All eligible Nonemployee Directors shall
receive grants of Options pursuant to the terms and provisions set forth
in Article 6 herein.
Article 6. Nonqualified Stock Options
6.1 Grants of Options. During the time period beginning as of the
Effective Date and ending May 31, 2005, and subject to the limitation on
the number of Shares subject to the Plan, on the day following each annual
meeting of the Company's shareholders, including the annual meeting at
which the Plan is approved by shareholders, each Nonemployee Director
shall be granted an Option to purchase two thousand (2,000) Shares,
effective as of each such day following the annual shareholders' meeting.
The specific terms and provisions of such Options shall be incorporated in
Award Agreements, executed pursuant to Section 6.3 of the Plan.
6.2 Limitation on Grant of Options. Other than those grants of
Options set forth in Section 6.1 herein, no additional Options shall be
granted under the Plan.
6.3 Option Award Agreement. Each Option grant shall be evidenced by
an Award Agreement that shall specify the Option Price, the duration of
the Option, the number of Shares available for purchase under the Option,
and such other provisions as the Board shall determine.
6.4 Option Price. The purchase price per Share available for purchase
under an Option shall equal the Fair Market Value of a Share on the date
the Option is granted.
6.5 Duration of Options. Each Option shall expire on the tenth (10th)
anniversary date of its grant.
6.6 Vesting of Shares Subject to Option. Subject to the terms of this
Plan, all Options granted under this Plan shall vest one hundred percent
(100%) on the date of grant, and shall remain exercisable until the tenth
anniversary of their grant date.
6.7 Termination of Directorship. All Options shall remain exercisable
for six (6) months following the date the Director's service on the Board
terminates, or until their expiration date, whichever period is shorter.
In the event of death of a Participant, all Options held by such
Participant shall remain exercisable at any time prior to such Option's
expiration date, or for one (1) year after the date of death, whichever
period is shorter, by such persons that have acquired the Participant's
rights under the Option by will or by the laws of descent and
distribution.
In the event of Disability of a Participant, all Options shall remain
exercisable at any time prior to such Option's expiration date, or for one
(1) year after the effective date of Disability determined by the Board
(the Disability Date ) whichever period is shorter, by the Participant or
such person or persons as shall have been named as the Participant's legal
representative or beneficiary.
6.8 Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full
payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having a Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares
tendered upon Option exercise have been held by the Participant for at
least six (6) months prior to their tender to satisfy the Option Price),
or (c) by a combination of (a) and (b).
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant,
in the Participant's name, Share certificates in an appropriate amount
based upon the number of Shares purchased pursuant to the exercise of the
Option.
6.9 Restrictions on Share Transferability. The Board shall impose
such restrictions on any Shares acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities laws, under
the requirements of any stock exchange or market upon which such Shares
are then listed and/or traded, and under any blue sky or state securities
laws applicable to such Shares; provided, however, that no such
restriction shall be imposed if the restriction could result in the
failure to comply with the formula award exception for grants of Options
to Directors under Rule 16b-3(c)(2)(i)(A) of Section 16 of the Exchange
Act.
6.10 Nontransferability of Options. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, all Options granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant,
or in the event of Disability, by his or her legal representative if one
is appointed.
6.11 Rights with Respect to Shares. No Participant or beneficiary, as
applicable, shall have rights as a shareholder with respect to any Shares
issuable pursuant to an Option until the date of issuance of a stock
certificate to the Participant or beneficiary, as applicable, for such
Shares. Except as provided in Section 4.3, no adjustment shall be made for
dividends, distributions, or other rights for which a record date is prior
to the date such stock certificate is issued.
Article 7. Amendment, Modification, and Termination
7.1 Amendment, Modification, and Termination. Subject to the terms
set forth in this Section 7.1, the Board may terminate, amend, or modify
the Plan at any time and from time to time; provided, however, that the
provisions set forth in the Plan regarding the amount of securities to be
awarded to Directors, the price of securities awarded to Directors, and
the timing of Option grants to Directors, may not be amended more than
once within any six (6) month period, other than to comport with changes
in the Code, the Employee Retirement Income Security Act of 1974 as
amended from time to time, or the rules thereunder.
Without the approval of the stockholders of the Company (as may be
required by the Code, by the insider trading rules of Section 16 of the
Exchange Act, by any national securities exchange or system on which the
Shares are then listed or reported, or by a regulatory body having
jurisdiction with respect hereto) no such termination, amendment, or
modification may:
(a) Increase the total number or value of Shares which may be available
for grants of Options under the Plan, except as provided in
Section 4.3 herein; or
(b) Change the class of Participants eligible to participate in the
Plan; or
(c) Materially increase the cost of the Plan, or materially increase
the benefits accruing to Participants.
7.2 Awards Previously Granted. Unless required by law, no
termination, amendment, or modification of the Plan shall in any material
manner adversely affect any Option previously granted under the Plan,
without the written consent of the Participant holding the Option.
<PAGE>
Article 8. Miscellaneous
8.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.
8.2 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
8.3 Beneficiary Designation. Each Participant under the Plan may,
from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be
paid in the event of his or her death (and/or who may exercise the
Participant's vested Options following his or her death). Each designation
will revoke all prior designations by the same Participant, shall be in a
form prescribed by the Board, and will be effective only when filed by the
Participant in writing with the Board during his or her lifetime. In the
absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate (and,
subject to the terms and provisions of the Plan, any unexercised vested
Options may be exercised by the administrator or executor of the
Participant's estate).
8.4 No Right of Nomination. Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any Director
for reelection by the Company's shareholders.
8.5 Shares Available. The Shares made available pursuant to Options
under the Plan may be either authorized but unissued Shares, or Shares
which have been or may be reacquired by the Company, as determined from
time to time by the Board.
8.6 Successors. All obligations of the Company under the Plan with
respect to Options granted hereunder shall be binding on any successor to
the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of the Company.
8.7 Requirements of Law. The granting of Options under the Plan shall
be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as
may be required.
8.8 Shareholder Approval and Adoption. The Plan shall be submitted to
the shareholders of the Company for their approval and adoption at the
1995 Annual Meeting of Stockholders. The Plan shall not be effective and
no Option shall be granted hereunder unless and until the Plan has been so
approved and adopted.
8.9 Governing Law. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the state of Delaware, without giving effect
to any choice or conflict of law provision or rule.
APPENDIX III
KATY INDUSTRIES, INC.
1994 KEY EMPLOYEE AND DIRECTOR STOCK PURCHASE PLAN
Section 1. Purpose
The purpose of the Katy Industries, Inc. 1994 Key Employee and
Director Stock Purchase Plan (the "Plan") is to establish an immediate
stockholder perspective in key management employees and directors by their
purchase of shares of Common Stock of Katy Industries, Inc. (the
"Company") currently held in treasury by the Company and to secure for the
Company and its stockholders the benefits of the incentive interest in the
ownership of Common Stock by current and future key management employees
and directors.
Section 2. Definitions
As used in this Plan the following words and terms shall have the
respective meanings ascribed to them below:
"Applicable Federal Short-Term Rate" means the applicable Federal
short-term rate, compounded semi-annually, provided by the Internal
Revenue Service on a monthly basis, as published in The Wall Street
Journal.
"Board of Directors" means the board of directors of Katy
Industries, Inc.
"Company" means Katy Industries, Inc. and any successor corporation.
"Compensation Committee" means the compensation committee of the
Board of Directors.
"Loan" means the loan or loans made at any time and from time to
time by the Company to a Participant to be used by the Participant for the
sole purpose of enabling or assisting the Participant to purchase Shares
from the Company pursuant to the Plan.
"Market Value" means the weighted mathematical average for all
Shares traded on the New York Stock Exchange for the five trading days
immediately preceding the commencement of the Offering Period or the
Repurchase Date, as the case may be. For the purpose of this definition,
"trading day" means a day on which the New York Stock Exchange is open for
business and on which Shares are traded.
"Offering Period" means the period of sixty (60) days established by
the Compensation Committee during which a Participant may apply for a Loan
and elect to purchase a number of Shares not to exceed the number
designated as available to such Participant by the Board of Directors.
"Participant" means a person who is an employee, officer and/or
director of a Participating Company and is designated by the Board of
Directors as being eligible to participate in the Plan.
"Participating Company" means with respect to each Participant, the
Company and any subsidiary or affiliated company by which such Participant
is regularly employed or serves as a director and which has been
authorized by the Board of Directors as being entitled to participate in
the Plan. A "subsidiary" is a company in which the Company directly or
indirectly may exercise voting rights with respect to more than fifty
percent (50%) of the issued and outstanding voting shares. An "affiliated
company" is a company other than a subsidiary in which the Company
directly or indirectly may exercise voting rights with respect to a
substantial percentage of the issued and outstanding voting shares and is
designated by the Board of Directors as an affiliated company.
"Plan" means the Katy Industries, Inc. 1994 Key Employee and
Director Stock Purchase Plan.
"Prime Rate" means the rate quoted by Harris Trust and Savings Bank
as its prime rate.
"Repurchase Date" means the date on which the Company elects to
repurchase Shares from a Participant pursuant to Section 6.05.
"Shares" means the shares of the Company's Common Stock, par value
$1.00 per share, and any shares or securities of the Company into which
such Shares are changed, converted, subdivided or reclassified.
Section 3. Eligibility
The Board of Directors may, at any time and from time to time,
designate those employees or directors of a Participating Company who are
eligible to participate in the Plan. All directors of the Company shall
be eligible to participate in the Plan. The Board of Directors shall
designate the maximum number of Shares available for purchase by each
Participant and the maximum Loan available to such Participant to assist
such Participant in the purchase of Shares. The Compensation Committee
shall determine the Offering Period during which Participants may elect to
purchase Shares. Following the establishment of the Offering Period, each
Participant shall be notified of their designation as a Participant, their
respective maximum Shares available for purchase and maximum available
Loan to such Participant and shall be notified of the Offering Period.
Each Participant shall at the same time be furnished with a copy of this
Plan, a prospectus relating to this Plan, a related election form, a form
of promissory note and irrevocable stock power of attorney.
Section 4. Participation
4.01 Participation in this Plan shall be entirely voluntary and any
decision not to participate shall not affect a Participant's employment or
service as a director with any Participating Company. During the Offering
Period, a Participant may apply for a Loan up to the maximum amount
determined by the Board of Directors pursuant to Section 3 hereof. In
order to participate, a Participant shall sign and deliver to the Company,
in the form prescribed by the Company, the following:
(a) an election to participate in this Plan which shall contain a
subscription for Shares, an application for a Loan and the
agreement of such Participant accepting the terms of this
Plan; and
(b) a demand promissory note payable to the Company in the amount
of the Loan; and
(c) an irrevocable stock power of attorney.
Section 5. Purchase of Shares and Pledge of Shares as Security
5.01 The amount of any Loan as determined by the Board of Directors
shall be used for the purchase by the Participant of fully paid and non-
assessable Shares from the Company currently held in treasury by the
Company.
5.02 The price for which such Shares shall be purchased by the
Participant shall be equal to sixty-five percent (65%) of the Market Value
of the Shares as determined based upon the Offering Period established by
the Compensation Committee.
5.03 All Shares purchased by a Participant pursuant to the
provisions of this Section 5, shall be held by the Company for so long as
any Loan of such Participant remains outstanding; provided, however, the
certificates in respect of such Shares shall be registered in the name of
the Participant and that such certificates may be released to a
Participant upon written request in accordance with Section 7.
5.04 All Shares purchased by a Participant pursuant to the
provisions of this Section 5, and the certificates representing such
Shares (together with a stock power of attorney in blank to transfer the
Shares signed by the Participant with a medallion signature guarantee)
shall immediately be pledged with the Company as security for repayment of
the Loan as provided in Section 6.
5.05 Notwithstanding the pledge of the Shares, the Participant
shall be noted on the records of the transfer agent as a stockholder of
the number of Shares subscribed for by such Participant and such
Participant shall be entitled to receive all dividends or other
distributions declared and paid thereon.
Section 6. Repayment of Loans
6.01 All Loans shall be due and payable in full upon demand, or if
no demand on the fifth anniversary of the date of the promissory note
evidencing the Loan unless expressly extended by the Company.
6.02 Interest on the principal amount of any Loan from time to time
outstanding during the year shall be due and payable semi-annually on June
30 and December 31 of each year. Each Loan shall initially bear interest
at a rate per annum equal to the Applicable Federal Short-Term Rate,
compounded semi-annually, in effect for the month in which the Loan is
initially made. The interest rate shall be adjusted semi-annually on July
1 and January 1 to the Applicable Federal Short-Term Rate in effect for
the months of July and January, respectively. Notwithstanding the
foregoing, if a Participant ceases to be an employee or director of a
Participating Company for any reason (other than death or disability), the
interest rate shall increase to the Prime Rate as of such date plus one
percent (1%), compounded semi-annually, payable semi-annually on June 30
and December 31 of each year.
6.03 A Participant shall be permitted to repay the balance of any
Loan outstanding without notice, premium or penalty at any time.
6.04 In the event of the death of a Participant before repayment in
full of the balance of any Loan, such Participant's legal representatives
shall have the option to participate in the Plan in lieu of the
Participant, provided notice of the intent to participate is given to the
Company with six (6) months after the date of death of the Participant;
otherwise the unpaid balance of such Loan shall become due and payable
upon the expiration of such six (6) month period.
6.05 In the event of failure by a Participant to repay all or any
portion of the Loan upon demand or maturity pursuant to Section 6.01, the
Company shall be entitled to repurchase such Shares at the Market Value
determined as of the Repurchase Date or sell, on the Participant's behalf,
in the open market and without further notice to the Participant, the
Shares of the Participant pledged with the Company as security pursuant to
Section 5 and the net proceeds shall be applied to payment of interest and
principal then due and payable. The balance of the net proceeds in excess
of the amount required to repay all outstanding Loans shall be paid
promptly to the Participant. In the event the net proceeds received by
the Company are not sufficient to repay all outstanding Loans of the
Participant, the Participant shall pay to the Company the amount of any
deficiency within thirty (30) days after the Company gives written notice
of such deficiency to the Participant.
Section 7. Delivery of Share Certificate
The Participant shall be entitled, upon written request, to receive
a share certificate for that whole number of Shares which represents the
portion of Shares originally purchased with the proceeds of a Loan that
repayments to the date of such written request bears to the full amount of
such Loan, less Shares previously received pursuant to this Section 7.
Upon repayment of the full amount of such Loan, plus interest, if any,
accrued thereon, the Participant shall be entitled to receive a share
certificate for the balance of the Shares of the Participant pledged with
the Company as security pursuant to Section 5.
Section 8. Accounts and Statements
The Company shall maintain records indicating the number of Shares
purchased on behalf of each Participant and the repayments made by each
Participant in respect of each Loan granted to such Participant pursuant
to the provisions of the Plan. The Company shall furnish annually to each
Participant a statement indicating the number of Shares held by the
Company on such Participant's behalf and the balance outstanding in
respect of each Loan granted to such Participant. Ten (10) days prior to
any interest payment date, the Company shall furnish to the Participant a
calculation of the interest payment due on such date determined in
accordance with Section 6.02. Each of such statements shall be deemed to
have been accepted by the Participant as correct unless written notice to
the contrary shall have been received by the Company within thirty (30)
days after the mailing of such statement to the Participant.
Section 9. Maximum Share Limit
The number of Shares reserved to be granted to Participants under
the Plan shall be limited to seventy-five thousand (75,000) Shares held in
treasury by the Company as of the date this Plan was approved by the Board
of Directors; provided, however that appropriate adjustments shall be
made, both in the number of Shares covered by individual grants and the
total number of Shares authorized to be issued hereunder, to give effect
to any relevant changes in the capitalization of the Company. The maximum
number of Shares available for grants to all directors in the aggregate
shall be limited to fifty-two thousand (52,000) Shares.
Section 10. Participant's Rights Not Transferable
Except as provided in Sections 6.04 and 6.05 hereof:
(a) No right or interest of any Participant in any of the
Shares shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise in
any manner, but excluding by operation of the laws of descent
and distribution, for a period of twenty-four (24) months from
the date of purchase; and
(b) Except as provided in Section 5 hereof, the Participant
shall not charge, mortgage, hypothecate, pledge or otherwise
encumber the Shares in respect of which the related Loan
remains outstanding and which continue to be pledged with the
Company as security for repayment of such Loan.
Section 11. Legend
Each Share purchased by a Participant shall be imprinted with the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED PURSUANT TO THE KATY INDUSTRIES, INC.
1994 KEY EMPLOYEE AND DIRECTOR STOCK PURCHASE
PLAN AND ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFERABILITY DESCRIBED IN SUCH PLAN."
Section 12. No Right to Employment
This Plan shall not give a Participant any right to be employed by,
or to continue to be employed by, a Participating Company.
Section 13. Administration, Amendments or Termination
13.01 The Board of Directors pursuant to Section 3 of this Plan
shall designate eligible Participants, the number of Shares such
Participant may purchase and the maximum Loan available to such
Participant. All other aspects of this Plan, including the designation of
the Offering Period, shall be administered by the Compensation Committee.
The Compensation Committee shall have full and final discretion to
interpret the provisions of this Plan. All decisions and interpretations
made by the Compensation Committee shall be binding and conclusive upon
the Participant and the Company.
13.02 From time to time the Board of Directors may amend or waive
any provisions of this Plan but no amendment or waiver of this Plan or any
termination of this Plan pursuant to Section 13.03 hereof shall adversely
affect the rights of any Participant at the date of such amendment or
waiver pursuant to the terms of this Plan; provided further that the Board
of Directors may not, following initial stockholder approval of this Plan
as described in Section 16, without further stockholder approval, amend
this Plan to increase the number of Shares which may be issued under this
Plan, including the maximum number of Shares available for purchase by
directors, or remove the authority of the Compensation Committee.
13.03 Subject to Section 13.02 hereof, the Board of Directors may
terminate this Plan at any time, the effect of such termination being that
no further Shares may be issued under this Plan after such termination.
Section 14. Notices
Any notice, payment, request or demand (collectively, a "Notice")
required or permitted to be given or made hereunder shall be in writing
and shall be sufficiently given if delivered, including by reputable
courier, to the Company or to the Participant, as the case may be, or if
sent by prepaid registered mail, addressed, in the case of any Notice to
the Company, to the Corporate Secretary, Katy Industries, Inc., 6300 S.
Syracuse Way, Suite 300, Englewood, Colorado 80111, and, in the case of a
Participant at the address set forth in the election to participate as
delivered to the Company; provided that the Company and/or the Participant
may by Notice in writing change the address of the Company or the
Participant to a different address stipulated in the Notice. Any Notice
delivered by hand, including by reputable courier, shall be considered to
have been effectively given on the date of delivery. Any Notice mailed as
described in this Section 14 shall be deemed to have been given on the
third business day following the date of such mailing.
Section 15. Costs
The Company shall pay all costs of administering the Plan.
Section 16. Stockholder Approval
This Plan shall be submitted for stockholder approval, by the
affirmative vote of the holders of a majority of Shares present and
entitled to vote, at the Company's 1995 Annual Meeting of Stockholders.
Section 17. Applicable Law
This Plan shall be governed by, administered and construed in
accordance with the laws of the State of Delaware.
- - - ----------------------------------------------------------------------------
KATY INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
1. Election of Directors - (see reverse)
(Except Nominee(s) written above) FOR WITHHOLD ALL EXCEPT
2. LONG-TERM INCENTIVE PLAN: the proposal
to approve and adopt the Katy Industries,
Inc. Long-Term Incentive Plan. FOR WITHHOLD ALL EXCEPT
3. NONEMPLOYEE DIRECTOR STOCK OPTION PLAN:
the proposal to approve and adopt the
Katy Industries, Inc. Nonemployee FOR WITHHOLD ALL EXCEPT
Director Stock Option Plan.
4. 1994 KEY EMPLOYEE AND DIRECTOR STOCK
PURCHASE PLAN: the proposal to approve
and adopt the Katy Industries, Inc.
1994 Key Employee and Director Stock
Purchase Plan. FOR WITHHOLD ALL EXCEPT
5. RATIFICATION OF SELECTION OF AUDITORS:
the proposal to ratify the appointment
of Deloitte & Touch LLP as auditors of
the Corporation for the current fiscal
year. FOR WITHHOLD ALL EXCEPT
6. In their discretion, to act on any other matters which may properly
come before the meeting and any adjournments thereof.
Dated: ,1995
Signature(s)
Please sign here exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, or in any other
representative capacity, please give your full title.
The shares represented by this Proxy will be voted at meeting. IF NO
CONTRARY INSTRUCTIONS ARE INDICATED, THIS PROXY SHALL BE DEEMED TO GRANT
AUTHORITY TO VOTE "FOR" ALL NOMINEES AS DIRECTORS AND "FOR" PROPOSALS (2)
THROUGH (5) ABOVE.
- - - -------------------------------------------------------------------------
PROXY PROXY
KATY INDUSTRIES, INC.
Annual Meeting of Stockholders - June 8, 1995
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of Katy Industries, Inc. hereby appoints JOHN
R. PRANN, JR. and PAUL KUROWSKI and each of them, attorneys and proxies,
with full power of substitution, to vote at the Annual Meeting of
Stockholders to be held at The Metropolitan Club, 7800 E. Orchard Road,
Greenwood Village, Colorado at 10:00 a.m. (local time) on Thursday,
June 8, 1995, and at any adjournments thereof, in the name of the
undersigned and with the same force and effect as the undersigned could
do if personally present, upon the matters set forth as indicated.
Nominees: Philip E. Johnson, John R. Prann, Jr., William F. Andrews,
Daniel B. Carroll, Wallace E. Carroll, Jr., Arthur R. Miller,
William H. Murphy, Lutz R. Raettig, Charles W. Sahlman, Jacob Saliba and
Glenn W. Turcotte.
See reverse side, if you wish to vote
in accordance with the Board of
Directors' recommendations, just sign
on the reverse side. You need not
mark any boxes.
PLEASE MARK, SIGN, DATE AND MAIL
THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.
(Continued and to be signed on
reverse side)
SEE REVERSE
