As filed with the Securities and Exchange Commission on March 19, 1998
                                                   Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


                                   PALEX, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                               76-0520673
(State or other jurisdiction of                               (I.R.S. Employer  
incorporation or organization)                               Identification No.)
                                                            
                               1360 POST OAK BLVD.
                                    SUITE 800
                              HOUSTON, TEXAS 77056
                                 (713) 350-6030

    (Address of registrant's principal executive offices, including zip code)

                             1996 STOCK OPTION PLAN
                              (Full Title of Plan)



                                 Edward E. Rhyne
                       Vice President and General Counsel
                                   PalEx, Inc.
                         1360 Post Oak Blvd., Suite 800
                              Houston, Texas 77056
                                 (713) 350-6030
          (Name and address, including zip code, and telephone number,
             including area code, of registrant's agent for service)

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
                                               Proposed maximum   Proposed maximum
     TITLE OF EACH CLASS        Amount to be    offering price    aggregate offering    Amount of
OF SECURITIES TO BE REGISTERED registered (1)    per share (2)      price (1)(2)    registration fee (2)
----------------------------  ---------------- -----------------  ----------------- -----------------
<S>                           <C>                   <C>              <C>                 <C>    
Common Stock, $.01 par value  2,800,000 shares      $12.625          $35,350,000         $10,429
============================  ================ =================  ================= =================
</TABLE>

(1)        There are also registered hereby such indeterminate number of shares
           of Common Stock as may become issuable by reason of operation of the
           anti-dilution provisions of the Plan described herein.

(2)        Calculated pursuant to Rule 457(h), based on the average of the high
           and low prices for Common Stock on March 16, 1998, as reported on The
           Nasdaq Stock Market.
<PAGE>
                                     PART I

                INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS

ITEM 1.  PLAN INFORMATION.*

ITEM 2.  REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*

      *Information required by Part I to be contained in the Section 10(a)
 prospectus is omitted from this Registration Statement in accordance with Rule
 428 under the Securities Act of 1933, as amended, and the Note to Part I of
 Form S-8.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

      The following documents filed by PalEx, Inc. (referred to herein as the
"CORPORATION" or the "REGISTRANT") with the Securities and Exchange Commission
are incorporated by reference in this Registration Statement.

      (1) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
          March 2, 1997 (Commission File No. 000-22237).

      (2) The description of the Corporation's Common Stock contained in its
          Registration Statement on Form 8-A, as filed with the Securities and
          Exchange Commission on March 13, 1997 (Commission File No. 000-22237).

      (3) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
          June 1, 1997 (Commission File No. 000-22237).

      (4) The Corporation's Current Report on Form 8-K, as filed with the
          Securities and Exchange Commission on August 7, 1997 (Commission File
          No. 000-22237).

      (5) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
          August 31, 1997 (Commission File No. 000-22237).

      (6) The Corporation's Post-Effective Amendment No. 1 to Form S-1, as filed
          with the Securities and Exchange Commission on September 3, 1997
          (Registration No. 333-28027).

      (7) The Corporation's Current Report on Form 8-K/A, as filed with the
          Securities and Exchange Commission on October 15, 1997 (Commission
          File No. 000-22237).


                                       -2-
<PAGE>
      (8) The Corporation's Current Report on Form 8-K, as filed with the
          Securities and Exchange Commission on November 24, 1997 (Commission
          File No. 000-22237).

      (9) The Corporation's Current Report on Form 8-K, as filed with the
          Securities and Exchange Commission on February 27, 1998 (Commission
          File No. 000-22237).

      In addition, all documents subsequently filed by the Corporation pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. The audited financial statements incorporated by reference in this
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports. Future financial statements of the Corporation and the reports
thereon of Arthur Andersen LLP also will be incorporated by reference in this
Registration Statement in reliance upon the authority of that firm as experts in
giving those reports to the extent said firm has audited those financial
statements and consented to the use of their reports thereon.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

      Certain legal matters with respect to the shares of Common Stock offered
hereby will be passed upon for the Corporation by Edward E. Rhyne, Vice
President and General Counsel for the Corporation, who is eligible to
participate in the plan covered hereby. As of March 18, 1998, Mr. Rhyne held
options to purchase 100,000 shares of Common Stock, none of which are
immediately exercisable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

      Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware (the "DGCL") empowers a corporation to indemnify any person who was
or is a party to or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than by an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.

      Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.

                                       -3-
<PAGE>
      Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.

      Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided such provision shall not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violation of
law, (iii) under Section 174 of DGCL, or (iv) for any transaction from which the
director derived an improper personal benefit.

      Article Eight of the Corporation's Amended and Restated Certificate of
Incorporation states that:

      "No director of the Corporation shall be personally liable to the
      Corporation or its stockholders for monetary damages for breach of
      fiduciary duty by such director as a director; provided, however, that
      this Article Eight shall not eliminate or limit the liability of a
      director to the extent provided by applicable law (i) for any breach of
      the director's duty of loyalty to the Corporation or its stockholders,
      (ii) for acts or omissions not in good faith or which involve intentional
      misconduct or a knowing violation of law, (iii) under Section 174 of the
      DGCL or (iv) for any transaction from which the director derived an
      improper personal benefit. No amendment to or repeal of this Article Eight
      shall apply to, or have any effect on, the liability or alleged liability
      of any director of the Corporation for or with respect to any acts or
      omissions of such director occurring prior to such amendment or repeal. If
      the DGCL is amended to authorize corporate action further eliminating or
      limiting the personal liability of directors, then the liability of a
      director of the Corporation shall be eliminated or limited to the fullest
      extent permitted by the DGCL, as so amended."

      In addition, Article VI of the Corporation's Bylaws further provides that
the Corporation shall indemnify its officers, directors and employees to the
full extent permitted by law.

      The Corporation has entered into an indemnification agreement with each of
its executive officers and directors which indemnifies such person to the
fullest extent permitted by its Amended and Restated Certificate of
Incorporation, its Bylaws and the DGCL. The Corporation also maintains
directors' and officers' liability insurance coverage.

                                       -4-
<PAGE>
ITEM 8.  EXHIBITS.

     5.1       Opinion of Edward E. Rhyne, Vice President and General Counsel of
                 the Registrant.

    10.1       1996 Stock Option Plan, as amended.

    10.2       Form of Stock Option Agreement.

    23.1       Consent of Arthur Andersen LLP.

    23.2       Consent of Edward E. Rhyne (included as part of Exhibit 5.1).

    24.0       Power of Attorney (set forth on the signature pages of this
               Registration Statement).

ITEM 9.  UNDERTAKINGS.

      The undersigned Registrant hereby undertakes:

      (1)   To file, during any period in which offers or sales are being made
            of the securities registered hereby, a post-effective amendment to
            this Registration Statement:

            (i)   To include any prospectus required by Section 10(a)(3) of the
                  Securities Act of 1933;

            (ii)  To reflect in the prospectus any facts or events arising after
                  the effective date of the Registration Statement (or the most
                  recent post-effective amendment thereof) which, individually
                  or in the aggregate, represent a fundamental change in the
                  information set forth in this Registration Statement.
                  Notwithstanding the foregoing, any increase or decrease in
                  volume of securities offered (if the total dollar value of
                  securities offered would not exceed that which was registered)
                  and any deviation from the low or high end of the estimated
                  maximum offering range may be reflected in the form of
                  prospectus filed with the Commission pursuant to Rule 424(b)
                  if, in the aggregate, the changes in volume and price
                  represent no more than a 20% change in the maximum aggregate
                  offering price set forth in the "Calculation of Registration
                  Fee" table in the effective registration statement.

            (iii) To include any material information with respect to the plan
                  of distribution not previously disclosed in this Registration
                  Statement or any material change to such information in this
                  Registration Statement;

PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.

                                       -5-
<PAGE>
      (2)   That, for the purpose of determining any liability under the
            Securities Act of 1933, each such post-effective amendment shall be
            deemed to be a new registration statement relating to the securities
            offered therein, and the offering of such securities at that time
            shall be deemed to be the initial bona fide offering thereof.

      (3)   To remove from registration by means of a post-effective amendment
            any of the securities being registered which remain unsold at the
            termination of the offering.

      The undersigned Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

      Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                       -6-
<PAGE>
                                   SIGNATURES


      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 18th day of March,
1998.


                            PALEX, INC.
                            (Registrant)



                            By: /s/ VANCE K. MAULTSBY
                                Vance K. Maultsby
                                President and Chief Executive Officer

      Each person whose signature appears below constitutes and appoints Vance
K. Maultsby and Edward E. Rhyne true and lawful attorneys-in-fact and agents,
each acting alone, with full powers of substitution and re-substitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, each acting alone, full powers and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below in the City of Houston, State of Texas on the 18th
day of March, 1998.

NAME                                TITLE


/s/ VANCE K. MAULTSBY               President and Chief Executive Officer
Vance K. Maultsby                   (principal executive officer)

                                       -7-
<PAGE>
NAME                                TITLE

/s/ CASEY A. FLETCHER               Chief Accounting Officer
Casey A. Fletcher                   (principal financial and accounting officer)


/s/ TUCKER S. BRIDWELL              Director
Tucker S. Bridwell


/s/ A. JOSEPH CRUZ                  Director
A. Joseph Cruz


/s/ JOHN E. DRURY                   Director
John E. Drury


/s/ TROY L. FRASER                  Director
Troy L. Fraser


/s/ A. E. HOLLAND                   Director
A. E. Holland


/s/ SAM W. HUMPHREYS                Director
Sam W. Humphreys


/s/ ELLIOT S. PEARLMAN              Director
Elliot S. Pearlman


/s/ STEPHEN C. SYKES                Director
Stephen C. Sykes





                                       -8-
<PAGE>
                                INDEX TO EXHIBITS

                                                                SEQUENTIALLY
EXHIBIT                                                           NUMBERED
NUMBER      EXHIBIT                                                 PAGE


   5.1     Opinion of Edward E. Rhyne, Vice President and            10
           General Counsel of the Registrant

  10.1     1996 Stock Option Plan, as amended                        11

  10.2     Form of Stock Option Agreement                            21

  23.1     Consent of Arthur Andersen LLP                            26

  23.2     Consent of Edward E. Rhyne (included as part of
           Exhibit 5.1)

  24.0     Power of Attorney (set forth on the signature pages
           of this Registration Statement)

                                       -9-
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 21979}]
{"company-data": {"conformed-name": "PALEX INC", "cik": "0001029448", "assigned-sic": "2430", "irs-number": "760520673", "state-of-incorporation": "DE", "fiscal-year-end": "1130"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-48239", "film-number": "98568859"}, "business-address": {"street1": "1360 POST OAK BLVD STE 800", "city": "HOUSTON", "state": "TX", "zip": "77056", "phone": "7138265111"}, "former-company": {"former-conformed-name": "PAL EX INC", "date-changed": "19961220"}}
As filed with the Securities and Exchange Commission on March 19, 1998
                                                   Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                   PALEX, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                               76-0520673
(State or other jurisdiction of                               (I.R.S. Employer  
incorporation or organization)                               Identification No.)
                                                            
                               1360 POST OAK BLVD.
                                    SUITE 800
                              HOUSTON, TEXAS 77056
                                 (713) 350-6030

    (Address of registrant's principal executive offices, including zip code)

                             1996 STOCK OPTION PLAN
                              (Full Title of Plan)

                                 Edward E. Rhyne
                       Vice President and General Counsel
                                   PalEx, Inc.
                         1360 Post Oak Blvd., Suite 800
                              Houston, Texas 77056
                                 (713) 350-6030
          (Name and address, including zip code, and telephone number,
             including area code, of registrant's agent for service)

                         CALCULATION OF REGISTRATION FEE
Proposed maximum   Proposed maximum
     TITLE OF EACH CLASS        Amount to be    offering price    aggregate offering    Amount of
OF SECURITIES TO BE REGISTERED registered (1)    per share (2)      price (1)(2)    registration fee (2)
----------------------------  ---------------- -----------------  ----------------- -----------------
Common Stock, $.01 par value  2,800,000 shares      $12.625          $35,350,000         $10,429
============================  ================ =================  ================= =================
(1)        There are also registered hereby such indeterminate number of shares
           of Common Stock as may become issuable by reason of operation of the
           anti-dilution provisions of the Plan described herein.

(2)        Calculated pursuant to Rule 457(h), based on the average of the high
           and low prices for Common Stock on March 16, 1998, as reported on The
           Nasdaq Stock Market.
PART I

                INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS

ITEM 1.  PLAN INFORMATION.*

ITEM 2.  REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*

      *Information required by Part I to be contained in the Section 10(a)
 prospectus is omitted from this Registration Statement in accordance with Rule
 428 under the Securities Act of 1933, as amended, and the Note to Part I of
 Form S-8.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

      The following documents filed by PalEx, Inc. (referred to herein as the
"CORPORATION" or the "REGISTRANT") with the Securities and Exchange Commission
are incorporated by reference in this Registration Statement.

      (1) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
          March 2, 1997 (Commission File No. 000-22237).

      (2) The description of the Corporation's Common Stock contained in its
          Registration Statement on Form 8-A, as filed with the Securities and
          Exchange Commission on March 13, 1997 (Commission File No. 000-22237).

      (3) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
          June 1, 1997 (Commission File No. 000-22237).

      (4) The Corporation's Current Report on Form 8-K, as filed with the
          Securities and Exchange Commission on August 7, 1997 (Commission File
          No. 000-22237).

      (5) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
          August 31, 1997 (Commission File No. 000-22237).

      (6) The Corporation's Post-Effective Amendment No. 1 to Form S-1, as filed
          with the Securities and Exchange Commission on September 3, 1997
          (Registration No. 333-28027).

      (7) The Corporation's Current Report on Form 8-K/A, as filed with the
          Securities and Exchange Commission on October 15, 1997 (Commission
          File No. 000-22237).

                                       -2-
(8) The Corporation's Current Report on Form 8-K, as filed with the
          Securities and Exchange Commission on November 24, 1997 (Commission
          File No. 000-22237).

      (9) The Corporation's Current Report on Form 8-K, as filed with the
          Securities and Exchange Commission on February 27, 1998 (Commission
          File No. 000-22237).

      In addition, all documents subsequently filed by the Corporation pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. The audited financial statements incorporated by reference in this
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports. Future financial statements of the Corporation and the reports
thereon of Arthur Andersen LLP also will be incorporated by reference in this
Registration Statement in reliance upon the authority of that firm as experts in
giving those reports to the extent said firm has audited those financial
statements and consented to the use of their reports thereon.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

      Certain legal matters with respect to the shares of Common Stock offered
hereby will be passed upon for the Corporation by Edward E. Rhyne, Vice
President and General Counsel for the Corporation, who is eligible to
participate in the plan covered hereby. As of March 18, 1998, Mr. Rhyne held
options to purchase 100,000 shares of Common Stock, none of which are
immediately exercisable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

      Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware (the "DGCL") empowers a corporation to indemnify any person who was
or is a party to or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than by an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.

      Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.

                                       -3-
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.

      Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided such provision shall not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violation of
law, (iii) under Section 174 of DGCL, or (iv) for any transaction from which the
director derived an improper personal benefit.

      Article Eight of the Corporation's Amended and Restated Certificate of
Incorporation states that:

      "No director of the Corporation shall be personally liable to the
      Corporation or its stockholders for monetary damages for breach of
      fiduciary duty by such director as a director; provided, however, that
      this Article Eight shall not eliminate or limit the liability of a
      director to the extent provided by applicable law (i) for any breach of
      the director's duty of loyalty to the Corporation or its stockholders,
      (ii) for acts or omissions not in good faith or which involve intentional
      misconduct or a knowing violation of law, (iii) under Section 174 of the
      DGCL or (iv) for any transaction from which the director derived an
      improper personal benefit. No amendment to or repeal of this Article Eight
      shall apply to, or have any effect on, the liability or alleged liability
      of any director of the Corporation for or with respect to any acts or
      omissions of such director occurring prior to such amendment or repeal. If
      the DGCL is amended to authorize corporate action further eliminating or
      limiting the personal liability of directors, then the liability of a
      director of the Corporation shall be eliminated or limited to the fullest
      extent permitted by the DGCL, as so amended."

      In addition, Article VI of the Corporation's Bylaws further provides that
the Corporation shall indemnify its officers, directors and employees to the
full extent permitted by law.

      The Corporation has entered into an indemnification agreement with each of
its executive officers and directors which indemnifies such person to the
fullest extent permitted by its Amended and Restated Certificate of
Incorporation, its Bylaws and the DGCL. The Corporation also maintains
directors' and officers' liability insurance coverage.

                                       -4-
ITEM 8.  EXHIBITS.

     5.1       Opinion of Edward E. Rhyne, Vice President and General Counsel of
                 the Registrant.

    10.1       1996 Stock Option Plan, as amended.

    10.2       Form of Stock Option Agreement.

    23.1       Consent of Arthur Andersen LLP.

    23.2       Consent of Edward E. Rhyne (included as part of Exhibit 5.1).

    24.0       Power of Attorney (set forth on the signature pages of this
               Registration Statement).

ITEM 9.  UNDERTAKINGS.

      The undersigned Registrant hereby undertakes:

      (1)   To file, during any period in which offers or sales are being made
            of the securities registered hereby, a post-effective amendment to
            this Registration Statement:

            (i)   To include any prospectus required by Section 10(a)(3) of the
                  Securities Act of 1933;

            (ii)  To reflect in the prospectus any facts or events arising after
                  the effective date of the Registration Statement (or the most
                  recent post-effective amendment thereof) which, individually
                  or in the aggregate, represent a fundamental change in the
                  information set forth in this Registration Statement.
                  Notwithstanding the foregoing, any increase or decrease in
                  volume of securities offered (if the total dollar value of
                  securities offered would not exceed that which was registered)
                  and any deviation from the low or high end of the estimated
                  maximum offering range may be reflected in the form of
                  prospectus filed with the Commission pursuant to Rule 424(b)
                  if, in the aggregate, the changes in volume and price
                  represent no more than a 20% change in the maximum aggregate
                  offering price set forth in the "Calculation of Registration
                  Fee" table in the effective registration statement.

            (iii) To include any material information with respect to the plan
                  of distribution not previously disclosed in this Registration
                  Statement or any material change to such information in this
                  Registration Statement;

PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.

                                       -5-
(2)   That, for the purpose of determining any liability under the
            Securities Act of 1933, each such post-effective amendment shall be
            deemed to be a new registration statement relating to the securities
            offered therein, and the offering of such securities at that time
            shall be deemed to be the initial bona fide offering thereof.

      (3)   To remove from registration by means of a post-effective amendment
            any of the securities being registered which remain unsold at the
            termination of the offering.

      The undersigned Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

      Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                       -6-
SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 18th day of March,
1998.

                            PALEX, INC.
                            (Registrant)

                            By: /s/ VANCE K. MAULTSBY
                                Vance K. Maultsby
                                President and Chief Executive Officer

      Each person whose signature appears below constitutes and appoints Vance
K. Maultsby and Edward E. Rhyne true and lawful attorneys-in-fact and agents,
each acting alone, with full powers of substitution and re-substitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, each acting alone, full powers and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below in the City of Houston, State of Texas on the 18th
day of March, 1998.

NAME                                TITLE

/s/ VANCE K. MAULTSBY               President and Chief Executive Officer
Vance K. Maultsby                   (principal executive officer)

                                       -7-
NAME                                TITLE

/s/ CASEY A. FLETCHER               Chief Accounting Officer
Casey A. Fletcher                   (principal financial and accounting officer)

/s/ TUCKER S. BRIDWELL              Director
Tucker S. Bridwell

/s/ A. JOSEPH CRUZ                  Director
A. Joseph Cruz

/s/ JOHN E. DRURY                   Director
John E. Drury

/s/ TROY L. FRASER                  Director
Troy L. Fraser

/s/ A. E. HOLLAND                   Director
A. E. Holland

/s/ SAM W. HUMPHREYS                Director
Sam W. Humphreys

/s/ ELLIOT S. PEARLMAN              Director
Elliot S. Pearlman

/s/ STEPHEN C. SYKES                Director
Stephen C. Sykes

                                       -8-
INDEX TO EXHIBITS

                                                                SEQUENTIALLY
EXHIBIT                                                           NUMBERED
NUMBER      EXHIBIT                                                 PAGE

   5.1     Opinion of Edward E. Rhyne, Vice President and            10
           General Counsel of the Registrant

  10.1     1996 Stock Option Plan, as amended                        11

  10.2     Form of Stock Option Agreement                            21

  23.1     Consent of Arthur Andersen LLP                            26

  23.2     Consent of Edward E. Rhyne (included as part of
           Exhibit 5.1)

  24.0     Power of Attorney (set forth on the signature pages
           of this Registration Statement)

                                       -9-