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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">UNITED
STATES</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECURITIES
AND EXCHANGE COMMISSION</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
D.C.&#160;&#160;20549</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__________________</font><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FORM
8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_______________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT
REPORT</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
Report (Date of earliest event reported):&#160;&#160;October 27,
2008</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman; FONT-VARIANT: small-caps">Katy
Industries, Inc.</font></div>
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name of registrant as specified in its charter)</font></div>
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            </td>
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      of Incorporation)</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Commission
      File Number)</font></div>
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      Employer Identification No.)</font></div>
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Rock Industrial Park Drive</font></div>
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Missouri&#160;&#160;63044</font></div>
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of principal executive offices) (Zip Code)</font></div>
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656-4321</font></div>
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telephone number, including area code)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[&#160;&#160;]&#160;&#160;Written
communications pursuant to Rule 425 under the Securities Act</font></div>
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material pursuant to Rule 14a-12 under the Exchange Act</font></div>
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communications pursuant to Rule 14d-2(b) under the Exchange Act</font></div>
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communications pursuant to Rule 13e-4(c) under the Exchange Act</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;5.02</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Departure
      of Directors or Principal Officers; Election of Directors; Appointment of
      Principal Officers; Compensatory Arrangement of Certain
      Officers</font></div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
October 27, 2008, Katy Industries, Inc. (the &#8220;Company&#8221;) entered into a letter
agreement with James W. Shaffer pursuant to which Mr. Shaffer was appointed Vice
President and Chief Financial Officer of the Company, effective
immediately.&#160;&#160;Mr. Shaffer, age 55, was employed by Angelica
Corporation for nine years up until August 2008, the last five years as Vice
President and Chief Financial Officer.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Compensation Committee of the Board of Directors of the Company approved a
compensation package for Mr. Shaffer that includes a base salary of $230,000
with a target incentive bonus of 50% of his base salary.&#160;&#160;For 2008
only, the prorated annual bonus (approximately $20,000) of Mr. Shaffer&#8217;s target
incentive bonus will be guaranteed, based on his employment date.&#160;&#160;The
compensation package includes a grant to Mr. Shaffer of 125,000 options with an
exercise price equal to market price on the first day of his employment to
purchase common stock of the Company, vesting in three equal annual
installments, beginning on the first anniversary of Mr. Shaffer&#8217;s employment
with the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
Shaffer's compensation package&#160;will provide him with severance payments
equal to 12 months of his base salary in effect on the date of&#160;termination
of his employment upon our termination without cause, as defined in the
employment offer letter.&#160;&#160;The employment terms will also include
provisions prohibiting Mr.&#160;Shaffer from competing with the Company or
soliciting its employees for a period of 12 months following the termination of
his employment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;8.01</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
      Events</font></div>
            </td>
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      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
October 27, 2008, the Company entered into a letter agreement with Edward D.
Carter pursuant to which Mr. Carter was appointed Vice President, Sales and
Marketing of the Company, effective immediately.&#160;&#160;Mr. Carter replaces
Robert A. Gail, who resigned effective October 27, 2008.&#160;&#160;Mr. Carter,
age 44, was General Manager of Airport Lighting Products, a division of Cooper
Cruse Hinds Airport Lighting Products, from April 2005 until October
2008.&#160;&#160;Prior to his position at Airport Lighting Products, Mr. Carter
was the Vice President of Sales of Cooper Electronic Technologies from 2003
until 2005.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Compensation Committee of the Board of Directors of the Company approved a
compensation package for Mr. Carter that includes a base salary of $225,000 with
a target incentive bonus of 50% of his base salary.&#160;&#160;For 2008 only,
the prorated annual bonus (approximately $20,000) of Mr. Carter&#8217;s target
incentive bonus will be guaranteed, based on his employment date.&#160;&#160;The
compensation package includes a grant to Mr. Carter of 125,000 options with an
exercise price equal to market price on the first day of his employment to
purchase common stock of the Company, vesting in three equal annual
installments, beginning on the first anniversary of Mr. Carter&#8217;s employment with
the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
Carter's compensation package&#160;will provide him with severance payments
equal to 6 months of his base salary in effect on the date of&#160;termination
of his employment upon our termination without cause, as defined in the
employment offer letter.&#160;&#160;The employment terms will also include
provisions prohibiting Mr.&#160;Carter from competing with the Company or
soliciting its employees for a period of 6 months following the termination of
his employment.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
Current Report on Form 8-K <a name="id_0_5" /><a name="id_0_6">may contain various
&#8220;forward-looking statements&#8221; as defined in the Private Securities Litigation
Reform Act of 1995.&#160;&#160;The forward-looking statements are based on the
beliefs of Katy&#8217;s management, as well as assumptions made by, and information
currently available to, the company&#8217;s management.&#160;&#160;These statements
are subject to risks and uncertainties that may cause actual results to differ
materially from the statements and other information contained
herein.&#160;&#160;Additionally, the forward-looking statements are based
on&#160;Katy&#8217;s current expectations and projections about future events and
trends affecting the financial condition of its business and are not a guarantee
of future performance.&#160;&#160;Undue reliance should not be placed on such
forward-looking statements, as they speak only as of the date hereof and we
undertake no obligation to update these statements to reflect subsequent events
or circumstances, except as may be required by law.&#160;&#160;Additional
information regarding these and other risks and uncertainties is contained in
our periodic filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the fiscal year ended December 31,
2007.&#160;&#160;Katy undertakes no obligation to revise or update such
statements to reflect current events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.</a></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;9.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
Statements and Exhibits</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-STYLE: italic">Exhibits</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
No.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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              <div style="TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CFO
      Employment Offer Letter, dated October 27,
2008</font></div>
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    <div>
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              <div style="TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.2&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
      President, Sales and Marketing Employment Offer Letter, dated October 27,
      2008</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">KATY
INDUSTRIES, INC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant)</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By: <font style="DISPLAY: inline; TEXT-DECORATION: underline">/s/ David J.
Feldman</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">David J.
Feldman</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
Executive Officer</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;&#160;October
27, 2008</font></div><br>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
No.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
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              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;CFO
      Employment Offer Letter, dated October 27,
2008</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Vice
President, Sales and Marketing Employment Offer Letter, dated October 27,
2008</font></div>
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form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C.  20549
__________________
FORM
8-K
_______________
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):  October 27,
2008
Katy
Industries, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
001-05558
75-1277589
(State
      of Incorporation)
(Commission
      File Number)
(IRS
      Employer Identification No.)
305
Rock Industrial Park Drive
Bridgeton,
Missouri  63044
(Address
of principal executive offices) (Zip Code)
(314)
656-4321
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[  ]  Written
communications pursuant to Rule 425 under the Securities Act
[  ]  Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
[  ]  Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
[  ]  Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
Item 5.02
Departure
      of Directors or Principal Officers; Election of Directors; Appointment of
      Principal Officers; Compensatory Arrangement of Certain
      Officers
On
October 27, 2008, Katy Industries, Inc. (the "Company") entered into a letter
agreement with James W. Shaffer pursuant to which Mr. Shaffer was appointed Vice
President and Chief Financial Officer of the Company, effective
immediately.  Mr. Shaffer, age 55, was employed by Angelica
Corporation for nine years up until August 2008, the last five years as Vice
President and Chief Financial Officer.
The
Compensation Committee of the Board of Directors of the Company approved a
compensation package for Mr. Shaffer that includes a base salary of $230,000
with a target incentive bonus of 50% of his base salary.  For 2008
only, the prorated annual bonus (approximately $20,000) of Mr. Shaffer's target
incentive bonus will be guaranteed, based on his employment date.  The
compensation package includes a grant to Mr. Shaffer of 125,000 options with an
exercise price equal to market price on the first day of his employment to
purchase common stock of the Company, vesting in three equal annual
installments, beginning on the first anniversary of Mr. Shaffer's employment
with the Company.
Mr.
Shaffer's compensation package will provide him with severance payments
equal to 12 months of his base salary in effect on the date of termination
of his employment upon our termination without cause, as defined in the
employment offer letter.  The employment terms will also include
provisions prohibiting Mr. Shaffer from competing with the Company or
soliciting its employees for a period of 12 months following the termination of
his employment.
Item 8.01
Other
      Events
On
October 27, 2008, the Company entered into a letter agreement with Edward D.
Carter pursuant to which Mr. Carter was appointed Vice President, Sales and
Marketing of the Company, effective immediately.  Mr. Carter replaces
Robert A. Gail, who resigned effective October 27, 2008.  Mr. Carter,
age 44, was General Manager of Airport Lighting Products, a division of Cooper
Cruse Hinds Airport Lighting Products, from April 2005 until October
2008.  Prior to his position at Airport Lighting Products, Mr. Carter
was the Vice President of Sales of Cooper Electronic Technologies from 2003
until 2005.
The
Compensation Committee of the Board of Directors of the Company approved a
compensation package for Mr. Carter that includes a base salary of $225,000 with
a target incentive bonus of 50% of his base salary.  For 2008 only,
the prorated annual bonus (approximately $20,000) of Mr. Carter's target
incentive bonus will be guaranteed, based on his employment date.  The
compensation package includes a grant to Mr. Carter of 125,000 options with an
exercise price equal to market price on the first day of his employment to
purchase common stock of the Company, vesting in three equal annual
installments, beginning on the first anniversary of Mr. Carter's employment with
the Company.
Mr.
Carter's compensation package will provide him with severance payments
equal to 6 months of his base salary in effect on the date of termination
of his employment upon our termination without cause, as defined in the
employment offer letter.  The employment terms will also include
provisions prohibiting Mr. Carter from competing with the Company or
soliciting its employees for a period of 6 months following the termination of
his employment.
This
Current Report on Form 8-K
may contain various
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995.  The forward-looking statements are based on the
beliefs of Katy's management, as well as assumptions made by, and information
currently available to, the company's management.  These statements
are subject to risks and uncertainties that may cause actual results to differ
materially from the statements and other information contained
herein.  Additionally, the forward-looking statements are based
on Katy's current expectations and projections about future events and
trends affecting the financial condition of its business and are not a guarantee
of future performance.  Undue reliance should not be placed on such
forward-looking statements, as they speak only as of the date hereof and we
undertake no obligation to update these statements to reflect subsequent events
or circumstances, except as may be required by law.  Additional
information regarding these and other risks and uncertainties is contained in
our periodic filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the fiscal year ended December 31,
2007.  Katy undertakes no obligation to revise or update such
statements to reflect current events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
Item 9.01                      Financial
Statements and Exhibits
(d)
Exhibits
Exhibit
No.
Description
99.1
CFO
      Employment Offer Letter, dated October 27,
2008
99.2
Vice
      President, Sales and Marketing Employment Offer Letter, dated October 27,
      2008
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
KATY
INDUSTRIES, INC.
(Registrant)
By:
/s/ David J.
Feldman
David J.
Feldman
Chief
Executive Officer
Date:  October
27, 2008
Exhibits
Exhibit
No.
Description
99.1
CFO
      Employment Offer Letter, dated October 27,
2008
99.2                                 Vice
President, Sales and Marketing Employment Offer Letter, dated October 27,
2008