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 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:
<PAGE>
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 May 17, 1996
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 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.
3. The transaction of such other business as may
properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed April 5, 1996 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
Arthur R. Miller
Secretary
April 15, 1996
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 May 17, 1996
_________________________________________
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 May 17, 1996 (the "Annual Meeting"). This proxy statement
and accompanying proxy card are being mailed to stockholders
commencing on or about April 15, 1996. The Annual Report to
Stockholders for the year ended December 31, 1995 (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."
Ratification 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, shareholders 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.
On January 17, 1996, Katy's Board of Directors adopted an
advance notice bylaw provision requiring that shareholder
proposals to be made at any shareholders' meeting be received
by the Company not less than 50 days nor more than 90 days
prior to the shareholders' meeting. No such shareholder
proposals were received for the 1996 Annual Meeting.
SOLICITATION AND VOTING INFORMATION
Record Date; Outstanding Shares
Stockholders of record at the close of business on
April 5, 1996 (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 8,403,587 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" the proposal to ratify the
selection of the independent auditors. A shareholder 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 1997 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:
William F. Andrews, Daniel B. Carroll, Wallace E. Carroll, Jr.,
Philip E. Johnson, Arthur R. Miller, William H. Murphy, John
R. Prann, Jr., 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 1995.
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 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 five times during 1995, 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.
This Committee met two times during 1995, met informally
throughout the year and held numerous telephone conferences
during 1995. 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 four meetings, met
informally throughout the year and held numerous telephone
conferences during 1995. The entire Board of Directors
considers and selects nominees for director and does not
maintain a separate nominating committee. On January 17, 1996,
Katy's Board of Directors adopted an advance notice bylaw
provision requiring shareholder nominations of directors to be
received by the Company not less than 50 days nor more than 90
days prior to the annual meeting. No such shareholder
nominations were received by the Company for the 1996 Annual
Meeting.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of
April 15, 1996 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>
William F. Andrews 64 1995 to present: Johnson Controls 1991 to present
Chairman of Navistar
Schrader, Inc. Southern New
a manufacturer of England Tele-
automotive and communications
industrial valves Corporation
1993 to 1995: Corrections
Chairman and CEO Corp. of
of Amdura America
Corporation MB
and Utica Corp., Communications
manufacturers of Northwestern
metal shears, Steel & Wire
waste balers, Company
compactors, Black Box Corp.
lifting equipment Process
and hardware Technology
1990 to 1993: Holding, Inc.
President and CEO
of UNR
Industries,
a steel products
firm
Daniel B. Carroll 60 1985 to present: ATP Manufact- 1994 to present
Vice President Sales uring, L.L.C.
ATP Manufacturing, Newgrange, L.L.C.
L.L.C., a manufact-
urer of molded
polyurethane
components
Wallace E. Carroll, Jr. 58 1992 to present: 1991 to present
Chairman of
CRL, Inc., a
diversified holding
company
1987 to present:
Investor
Philip E. Johnson 48 1994 to present: OEA, Inc. 1990 to present
Chairman of the
Board of Katy
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
Arthur R. Miller 45 1988 to present: Schon & Cie, AG 1988 to present
Partner with Holleb
& Coff, attorneys
at law
William H. Murphy 64 1992 to present: 1979 to present
Retired
1988 to 1992:
President of Katy
John R. Prann, Jr. 45 1993 to present: 1994 to present
President, Chief
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
Lutz R. Raettig 53 1995 to present: Schon & Cie AG 1991 to present
Chairman,
Management
Board, Morgan
Stanley Bank
AG, Frankfort,
Germany
1988 to 1995
Various Executive
Positions with
Commerzbank AG,
Frankfurt,
Germany
Charles W. Sahlman 69 1987 to present: 1972 to present
President, Bee Gee
Holding Company,
Inc., a holding company
for subsidiaries engaged
in the harvesting
and processing of
seafood.
Jacob Saliba 82 1993 to present: Compaganie des 1968 to present
Retired Entrepots et
1988 to 1993: Gares
Chairman of the Frigorifiques
Board and Chief Emerging Germany
Executive Officer Fund
of Katy Schon & Cie, AG
Syratech
Corporation
Glenn W. Turcotte 55 1992 to present: 1995 to present
Executive Vice
President
of Katy
1983 to present:
President of Glit
Division of Hallmark
Holdings, Inc., a
subsidiary of Katy
Robert M. Baratta 66 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 56 1996 to present:
Group Vice President -
Financial of Katy
1993 to present:
Vice President of Katy
1987 to 1993:
President of Beehive,
Inc., a subsidiary
of Katy
Peter S. More 58 1996 to present:
Group Vice
President -
Financial of Katy
1988 to 1996:
Vice President of
Finance of
Glit, a Katy
Division
Stephen P. Nicholson 43 1996 to present:
Treasurer, Chief
Financial
Officer of Katy
1994 to 1995:
Vice President and
Chief Financial
Officer of
Gerrity Oil and Gas
Corp.
1979 to 1994:
Various Financial
Positions, most
recently Vice
President and
Treasurer, of Total
Petroleum (N.A.) Ltd.
<Table/>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 15, 1996, 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>
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Beneficial of
Name Ownership Class
<S> <C> <S>
William F. Andrews 5,000 (1) *
Wallace E. Carroll, Jr. 3,221,661 (1)(2)(3) 38.3%<PAGE>
Philip E. Johnson 196,108 (1)(2)(4) 2.3%
Arthur R. Miller 3,330,752 (2)(5) 39.6%
William H. Murphy 6,600 (1) *
John R. Prann, Jr. 15,000 *
Lutz R. Raettig 5,000 (1) *
Charles W. Sahlman 5,000 (1) *
Jacob Saliba 8,216 (1) *
Daniel B. Carroll 5,000 (1) *
Glenn W. Turcotte 8,000 *
Robert M. Baratta 5,000 *
Michael G. Gordono 5,000 *
Paul Kurowski 6,008 *
(Resigned effective
January 29, 1996)
All directors and
executive officers
of Katy as a group (14
persons) 3,898,548 (1)(2) 46.4%(1)
* Indicates 1% or less
<Table/>
(1) Includes currently exercisable non-qualified stock
options to acquire 2,000 shares granted to each
nonemployee director pursuant to the Katy Industries, Inc.
Nonemployee Director Stock Option Plan.
(2) Includes shares deemed beneficially owned by Wallace E.
Carroll, Jr., Philip E. Johnson and Arthur R. Miller as a
result of their position as trustees of certain trusts for
the benefit of members of the Wallace E. Carroll family.
(See Notes 4 and 5 below and "Security Ownership of
Certain Beneficial Owners".) Amounts shown for Messrs.
Carroll, Johnson and Miller reflect multiple counting of
shares where more than one of such persons is a trustee of
a particular trust and is required to report beneficial
ownership of shares held by such trust. Amounts shown for
all directors and executive officers as a group do not,
however, reflect multiple counting of such shares.
(3) See note (2) under "Security Ownership of Certain
Beneficial Owners" for information concerning the
beneficial ownership of shares by Wallace E. Carroll, Jr.
(4) Philip E. Johnson holds 8,321 shares directly and options
to acquire 2,000 shares. Mr. Johnson is a trustee of
trusts for the benefit of his former wife, Lelia Carroll
and their descendants holding 75,294 shares in the
aggregate. Mr. Johnson is also a trustee of trusts for
the benefit of Wallace E. Carroll, Jr. and his descendants
holding 1,774 shares in the aggregate. Mr. Johnson is
also a trustee for the Marital Trust formed under the Will
of Wallace E. Carroll and is an administrator of the
Wallace E. Carroll Estate which collectively hold 108,719
shares.
(5) Arthur R. Miller holds 3,000 shares directly. Mr. Miller
is a trustee of trusts for the benefit of Wallace E.
Carroll, Jr. and his descendants holding 710,640 shares in
the aggregate. Certain of such trusts are shareholders of
CRL, Inc. and may be deemed to beneficially own 2,073,559
shares held by CRL, Inc. Mr. Miller is also a trustee of
trusts for the benefit of Denis H. Carroll and his
descendants holding 471,496 shares in the aggregate. Mr.
Miller is also a trustee of trusts for the benefit of
Lelia Carroll and her descendants holding 70,000 shares in
the aggregate. Mr. Miller is a co-trustee of The Holden
Foundation which holds 2,057 shares. Mr. Miller disclaims
beneficial ownership of all shares beneficially owned by
the trusts and foundation described above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and notes set forth as of April 15,
1996, 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.
Reference should be made to the notes below for a description
of the nature of the beneficial ownership reported in the table
below.
</TABLE>
<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 3,221,661 (1) (2) 38.3%
Denis H. Carroll and
the DHC Trusts
c/o CRL Industries, Inc.
2345 Waukegan Rd.
Suite S-200
Bannockburn, IL 60015 611,246 (1) (3) 7.3%
Gabelli Funds, Inc.
One Corporate Center
Rye, NY 10580-1434 1,721,200 (4) 20.5%
<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. Wallace E. Carroll, Jr. is a director
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. In February 1996, members
of the Carroll Family completed a reorganization of their
jointly held family assets. The reorganization resulted in,
among other things, the individual reallocation of Katy
shares formerly jointly held by members of the Carroll
Family. The amounts shown above for members of the Carroll
Family give effect to the reorganization and do not reflect
any multiple counting of shares.
(2) Wallace E. Carroll, Jr. directly holds 393,850 shares and
options to acquire 2,000 shares. Wallace E. Carroll, Jr. is
a trustee of trusts for his benefit and his descendants (the
"WEC Jr. Trusts") which collectively hold 710,613 shares.
Wallace E. Carroll, Jr. and certain of the WEC Jr. Trusts own
all of the outstanding shares of CRL, Inc. which holds
2,073,559 Katy shares. Wallace E. Carroll, Jr. also is a
trustee of the Wallace Foundation which holds 32,910 shares.
Shares reported as beneficially owned by Wallace E. Carroll,
Jr. also include 8,729 shares directly owned by Mr. Carroll's
wife, Amelia M. Carroll.
(3) Denis H. Carroll holds 7,898 shares directly. Denis H.
Carroll is a trustee of trusts for his benefit and his
descendants (the "DHC Trusts") which collectively hold 471,496
shares. Denis H. Carroll is also a trustee of the Wallace E.
Carroll Estate and an administrator of the Marital Trust formed
under the Will of Wallace E. Carroll which collectively hold
108,719 shares. Denis H. Carroll is also the general partner
of the DHC Partnership Ltd., which holds 21,076 shares and is
a trustee of The Holden Foundation which holds 2,057 shares.
(5) Beneficial ownership is as reported on an Amendment No. 18 to
Statement on Schedule 13D dated March 8, 1996 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, 1995, all of its directors, executive
officers and greater than 10% beneficial owners were in compliance
with their Section 16 filing requirements, except as described
below.
Due to administrative and personnel complications, all year-end reports
on Form 5 for the Company's executive officers and
directors (other than Wallace E. Carroll, Jr. who was not required
to file a Form 5) were filed two days after the required filing
date of February 14, 1996. These reports contained only year-end
reporting of option grants to executive officers in June and
December 1995, and option grants to non-employee directors in
June 1995. In addition, Philip E. Johnson's Form 5 reported sales
transactions in July through December 1995 by trusts for the
benefit of his children for which Mr. Johnson serves as one of the
three trustees. These transactions were separately reported by
Mr. Johnson's former wife, Lelia Carroll, who is also a trustee of
such trusts. Mr. Johnson did not participate in such sale
decisions and inadvertently failed to timely report such
transactions based upon his position as a trustee.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the years ending December 31,
1995, 1994 and 1993, 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.
</TABLE>
<TABLE>
<CAPTION>
Other Securities All
Name and Annual Underlying Other
Principal Position Year Salary Bonus Compensation Options Compensation
<S> <C> <C> <C> <C> <C> <C>
John R. Prann (c)
President, Chief Executive 1995 $275,000 $165,000 $ 22,600 43,000 $ 8,412
Officer and Chief Operating 1994 241,400 25,000 49,200 - 8,768
Officer 1993 159,786 35,000 - - 7,973
Glenn W. Turcotte 1995 $215,000 $103,200 $ 17,650 23,000 $ 3,200
Executive Vice-President 1994 195,000 104,000 26,240 - 2,663
1993 164,904 124,769 - - 2,579
Robert M. Baratta 1995 $175,000 $ 73,500 $ 14,380 15,000 $ 7,916
Vice President 1994 175,000 16,000 16,400 - 9,891
1993 111,500 15,000 - - 2,530
Michael G. Gordono 1995 $160,000 $ 67,200 $ 13,140 10,500 $ 6,691
Vice President 1994 160,000 10,000 16,400 - 4,243
1993 139,461 15,000 - - 1,189
Paul Kurowski 1995 $135,000 $ 28,350 $ 11,090 - $ 7,268
Chief Financial Officer, 1994 135,000 14,000 16,400 - 7,432
Secretary and Treasurer 1993 109,500 25,000 - - 3,468
(Resigned effective
January 29, 1996)
<Table/>
(a) 1995 includes the dollar value set aside for the Katy Industries, Inc.
Supplemental Retirement and Deferral Plan. 1994 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.
(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.
(d) Does not include options for Paul Kurowski, who resigned effective
January 29, 1996, as a result of which, options granted did not vest.
Option Grants Table
The following table sets forth information concerning individual grants
of stock options during 1995 to the Company's Chief Executive Officer and the
other four most highly compensated executive officers.
</TABLE>
<TABLE>
<CAPTION>
Option Grants In Last Fiscal Year
Number of Potential Realized
Securities % of Total Value at Assumed
Underlying Options Exercise Annual Rates of Stock
Options Granted to or Base Expiration Price Appreciation
Name (1) Granted (2) Employees Price Date For Option Term
5% 10%
<S> <C> <C> <C> <C> <C> <C>
John R. Prann 15,000 8.3% $8.50 6/08/05 $ 84,791 $214,875
28,000 15.5 9.25 12/29/05 158,277 401,105
Glenn W. Turcotte 8,000 4.4% 8.50 6/08/05 45,226 114,611
15,000 8.3 9.25 12/29/05 84,798 214,895
Robert M. Baratta 4,000 2.2% 8.50 6/08/05 22,766 57,693
11,000 6.1 9.25 12/29/05 62,606 158,657
Michael G. Gordono 4,000 2.2% 8.50 6/08/05 22,766 57,693
6,500 3.5 9.25 12/29/05 36,645 92,864
<Table/>
(1) Does not include options for Paul Kurowski, who resigned effective
January 29, 1996, as a result of which, options granted did not vest.
(2) Options granted vest 25% per year commencing on the first anniversary of
the date of grant.
The following table sets forth the value of in-the-money options at year-end.
No options have been exercised, and none were exercisable as of December 31,
1995.
Aggregate Fiscal Year-End Option Values
Number of
Securities
Underlying Value of
Unexercised In-the-Money
Options at Options at
Name (1) Year-End Year-End
John R. Prann 43,000 $ 11,250
Glenn W. Turcotte 23,000 6,000
Robert M. Baratta 15,000 3,000
Michael G. Gordono 10,500 3,000
(1) Does not include options for Paul Kurowski, who resigned effective
January 29, 1996, as a result of which, options granted did not vest.
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 earn
interest at a rate of 4% per year 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 as of December 31, 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.
Severance Agreements
On January 17, 1996, the Board of Directors adopted and approved a
compensation and benefits assurance program for six of Katy's key officers.
The program became effective January 1, 1996 and generally provides for
certain severance benefits following an involuntary termination without cause
that occurs within two years following a "Change in Control" of the Company
or following a deemed constructive termination that occurs within two years
following a "Change in Control" of the Company. A "Change in Control" is
defined as follows: (i) if any person (other than those persons in control
on the effective date) becomes the beneficial owner of securities of the
Company representing 30% or more of the combined voting power of the
Company's then outstanding shares; (ii) if during any period of two
consecutive years, individuals who, at the beginning of such period
constitute the Board, cease to constitute a majority thereof; or (iii) if the
shareholders of the Company approve (a) a plan of liquidation of the Company,
(b) an agreement for the sale or disposition of substantially all of the
Company's assets, or (c) a merger, consolidation, or reorganization of the
Company. Severance benefits payable include either three years base salary
in the case of Tier I participants or two years base salary in the case of
Tier II participants. Severance benefits also include a lump sum payment of
annual bonuses, continuation of healthcare benefits, three years matching
contributions under the Company's 401(k) savings plan (two years in the case
of Tier II participants), advancement of legal fees incurred in enforcing
rights under the program, out-placement assistance and a "gross-up" payment
for any excise tax payments due by the officer as a result of receipt of the
forgoing severance benefits.
Compensation of Directors
Directors who are not employees of Katy or its subsidiaries receive an
annual retainer of $12,000 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.
During 1995, William H. Murphy and Jacob Saliba were awarded a stipend
of $150,000 each for consulting activities in connection with Katy's sale of
its wholly owned subsidiary, WSC Liquidating, Inc. and its holdings of
Syratech Corporation stock.
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 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.
Under the Katy Industries, Inc. Nonemployee Director Stock Option Plan
(the "Directors' Stock Option Plan"), each individual who was a nonemployee
director on June 8, 1995, other than Arthur R. Miller, received an option to
purchase 2,000 shares of the Company's common stock at a price of $8.50 per
share. Mr. Miller is a designated participant in the Katy Industries, Inc.
Long-Term Incentive Plan and received options to acquire 17,000 shares under
such plan in 1995. Under the terms of the Directors' Stock Option Plan, each
nonemployee director receives an annual grant of an option to acquire 2,000
shares on the date immediately following the annual meeting. The exercise
price is the fair market value on the date of grant. These options are
exercisable at any time during a ten year period from the date of grant.
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.
The Annual Bonus Plan, which was effective as of January 1, 1995,
establishes 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 1996 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, among other things, allows 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 allows 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 are 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.
The Long-Term Incentive Plan allows the Compensation Committee to
provide equity-based compensation (including stock options, restricted stock
awards and stock appreciation rights) as a third element of the Company's
annual compensation program. The Compensation Committee believes the
Long-Term Incentive Plan enables the Company to more closely a
compensation with stockholder interests.
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 1995 were based upon his experience
and qualifications, responsibilities, individual effort and performance and
the Company's performance. Mr. Pranns 1995 bonus was paid pursuant to the
terms of the Annual Bonus Plan as described above. The Compensation
Committee also awarded Mr. Prann stock options described above during 1995
which the Compensation Committee believes is commensurate with Mr. Prann's
performance and the Company's financial performance in 1995.
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 1995, Charles W. Sahlman served as President of Bee Gee Holdings,
Inc. ("Bee Gee") (a 39% owned Katy subsidiary) and as President of C.E.G.F.
(USA), Inc. ("C.E.G.F.") which became a 95% owned Katy subsidiary in March
1994. Mr. Sahlman resigned his position as President of C.E.G.F. in April
1996. Mr. Sahlman is also a former Executive Vice President of Katy.
William H. Murphy was President, Chief Operating Officer and Chief
Financial Officer of Katy through the year ended December 31, 1992.
John R. Prann, Jr., Katy's President, Chief Executive Officer and Chief
Operating Officer, served as President of CRL, Inc., which is wholly owned
by Wallace E. Carroll, Jr. and the WEC Jr. Trusts, 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.
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 Conglomerates Index for the fiscal years ending
December 31, 1990 through 1995. The graph below assumes $100 invested on
December 31, 1990.
Comparison Of 5-Year Cumulative Total Return
1990 1991 1992 1993 1994 1995
Katy Industries, Inc. 100 114 132 167 135 151
Dow Jones Industrial 100 125 134 157 165 220
Average
Dow Jones 100 138 160 202 202 282
Conglomerates
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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 1995 and continues to
serve in such capacity. During 1995 Katy paid $1,787,000 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
1995. During 1995 Katy paid $265,000 in legal fees to Bennington,
Johnson, Ruttum & Reeve.
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.
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
1995 and 1994 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.
On January 17, 1996, Katy's Board of Directors adopted an advance
notice bylaw provision requiring that shareholder proposals to be made
at any annual meeting be received by the Company not less than 50 days
nor more than 90 days prior to the annual meeting. No such
shareholder proposals were received for the 1996 Annual Meeting.
PROPOSALS OF SHAREHOLDERS FOR 1997 ANNUAL MEETING
Proposals which shareholders intend to present for inclusion
in the Proxy Statement for the 1997 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 16, 1996 to be considered for inclusion in the
proxy materials for the 1997 Annual Meeting.
By Order of the Board of
Directors
KATY INDUSTRIES, INC.
Arthur R. Miller
Secretary
April 15, 1996
THIS PAGE
INTENTIONALLY
LEFT BLANK
PROXY Katy Industries, Inc. PROXY
Annual Meeting of Stockholders -- May 17, 1996
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 STEPHEN P. NICHOLSON 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
Friday, May 17, 1996 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 below 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
KATY INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY.
1. Election of Directors - (see reverse) For Withhold All Except
_________________________________
(Except Nominee(s) written above)
2. RATIFICATION OF SELECTION OF AUDITORS: For Withhold All Except
the proposal to ratify the appointment
of Deloitte & Touche as auditors of
the corporation for the current fiscal
year.
3. In their discretion, to act on any other
matters which may properly come before the
meeting and any adjournments thereof.
Dated:____________________, 1996
Signatures(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 AND 3 ABOVE.
</TABLE>
