As filed with the Securities and Exchange Commission on November 10, 1997

                                         Registration No. _______________

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM S-8

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

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

   Delaware                                               13-2596288
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(State or other jurisdiction                             (I.R.S. Employer
   of incorporation)                                      Indentification No.)

12827 East Imperial Hwy, Santa Fe Springs, CA             90670
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(Address of principal executive offices)                 (Zip code)

                            REINHOLD INDUSTRIES, INC.
                              STOCK INCENTIVE PLAN
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                            (Full title of the plan)

                                Brett R. Meinsen
                     Vice President, Secretary and Treasurer
                            Reinhold Industries, Inc.
                             12827 East Imperial Hwy
                           Santa Fe Springs, CA 90670
                                (562) 944 - 3281
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            (Name, address, and telephone number of agent for service

                         CALCULATION OF REGISTRATION FEE
================================================================================
                                          Proposed    Proposed
                                          maximum     maximum
                            Amount        offering    aggregate     Amount of
Title of securities         to be         price per   offering      registration
to be registered            registered    share (1)   price (1)     fee
--------------------------------------------------------------------------------
Class A Common Stock,       100,000
 $.01 par value per share   shares        $10.00      $1,000,000      $303.03
--------------------------------------------------------------------------------

(1)  Estimated  solely for the purpose of  calculating  registration  fee on the
basis of the average of the bid  ($10.00)  and asked  ($10.00)  price paid for a
share of  Reinhold  Class A Common  Stock on November 7, 1997 as reported on the
NASD OTC Bulletin Board.


<PAGE>


                                     PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.     INCORPORATION OF DOCUMENTS BY REFERENCE

         The  following  documents,  which are on file with the  Securities  and
Exchange  Commission,   are  incorporated  in  this  Registration  Statement  by
reference:

         a.   The Reinhold  Industries,  Inc. (the  "Company")  Annual Report on
              Form  10-KSB,  as amended,  for the year ended  December 31, 1996,
              filed with the Commission on March 20, 1997.

         b.   The  Company's  Quarterly  Reports on Form 10-QSB for the quarters
              ended March 31, 1997, June 30, 1997 and September 30, 1997,  filed
              pursuant to Section 13 of the Securities Exchange Act of 1934 (the
              "Exchange Act").

         c.   The  description  of the  Company's  Capital  Stock  contained  in
              Article IV of the Company's  Amended and Restated  Certificate  of
              Incorporation  filed with the  Commission on June 28, 1996 as part
              of the  Company's  8-K,  Exhibit  99(a),  Exhibit  A to the  Keene
              Corporation Fourth Amended Plan of  Reorganization,  together with
              all  amendments  or reports filed for the purpose of updating such
              description to the extent of such updating.


               All  documents  subsequently  filed by the  Company  pursuant  to
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a  post-effective  amendment which indicates that all securities  hereby offered
have been sold or which deregisters all securities then remaining unsold,  shall
be deemed to be incorporated by reference  herein and to be part hereof from the
respective dates of filing of such reports and documents.

         Any  statement  contained  in a document  incorporated  or deemed to be
incorporated  by reference  herein shall be deemed to be modified or  superseded
for the purposes of this  Registration  Statement to the extent that a Statement
contained  herein or in any other  subsequently  filed  document  which  also is
incorporated  or is deemed to be  incorporated  by reference  herein modified or
superseded  such statement.  Any such statement so modified or superseded  shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.

Item 4.     DESCRIPTION OF SECURITIES

         Not Applicable.

Item 5.       INTERESTS OF NAMED EXPERTS AND COUNSEL

         Not Applicable.




<PAGE>


Item 6.     INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Article  VII of the  Company's  Amended  and  Restated  Certificate  of
Incorporation provides as follows:

                                   ARTICLE VII

         1. The  Corporation  shall  indemnify to the fullest  extent  permitted
under and in  accordance  with the laws of the State of Delaware  any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or  investigative  by reason of the fact that he is or was a director,  officer,
employee  or  agent  of or in  any  other  capacity  with  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.

         2.  Expenses  (including  attorneys'  fees)  incurred in defending  any
civil,  criminal,  administrative  or investigative  action,  suit or proceeding
shall (in the case of any action,  suit or proceeding  against a director of the
Corporation)  or may (in the case of any action,  suit or proceeding  against an
officer,  trustee,  employee or agent) be paid by the  Corporation in advance of
the final  disposition  of such action,  suit or proceeding as authorized by the
Board upon receipt of an undertaking by or on behalf of the  indemnified  person
to  repay  such  amount  if it shall  ultimately  be  determined  that he is not
entitled to be indemnified by the Corporation as authorized in this paragraph.

         3. The  indemnification,  advancement  of expenses and other rights set
forth in this Paragraph  shall not be exclusive of any  provisions  with respect
thereto  in  the  by-laws  or  any  other  contract  or  agreement  between  the
Corporation and any officer, director, employee or agent of the Corporation.

         4. Neither the amendment nor repeal of this Article VII,  subparagraphs
1,  2  or  3,  nor  the  adoption  of  any  provision  of  this  Certificate  of
Incorporation  inconsistent  with  Article VII,  subparagraphs  1, 2 or 3, shall
eliminate or reduce the effect of this Article VII, subparagraphs 1, 2 and 3, in
respect of any matter occurring before such amendment,  repeal or adoption of an
inconsistent  provision  or in  respect  of any cause of  action,  suit or claim
relating  to any  such  matter  which  would  have  given  rise  to a  right  of
indemnification  or right to receive  expenses  pursuant  to this  Article  VII,
subparagraphs  1, 2 or 3, if such  provision had not been so amended or repealed
or if a provision inconsistent therewith had not been so adopted.

         5. No director  shall be personally  liable to the  Corporation  or any
stockholder  for monetary  damages for breach of  fiduciary  duty as a director,
except for any matter in  respect  of which  such  director  (A) shall be liable
under  Section 174 of the DGCL or any amendment  thereto or successor  provision
thereto, or (B) shall be liable by reason that, in addition to any and all other
requirements  for liability,  he: (i) shall have breached his duty of loyalty to
the Corporation or its stockholders; (ii) shall not have acted in good faith or,
in failing to act, shall not have acted in good faith; (iii) shall have acted in
a manner involving  intentional  misconduct or a knowing violation of law or, in

<PAGE>

failing to act, shall have acted in a manner involving intentional misconduct or
a knowing  violation  of law; or (iv) shall have  derived an  improper  personal
benefit.

         If the Delaware  General  Corporation  Law is amended after the date of
incorporation  of  the  Corporation  to  authorize  corporation  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 Delaware General Corporation Law, as so amended.

         6. This Certificate of Merger shall be effective on or such date as the
Order herein above referred to shall provide.


         The Company currently  maintains  policies of insurance under which the
directors and officers of the Company are insured, within the limits and subject
to the limitations of the policies,  against certain expenses in connection with
the defense of actions,  suits or  proceedings,  and certain  liabilities  which
might be imposed as a result of such  actions,  suits or  proceedings,  to which
they are parties by reason of being or having been such directors or officers.



Item 7.     EXEMPTION FROM REGISTRATION CLAIMED

         Not Applicable.

Item 8.     EXHIBITS

         See Exhibit Index.

Item 9.     UNDERTAKINGS

         The Company hereby undertakes:

         (1) To file during any period in which  offers or sales are being made,
post-effective amendment(s) to this Registration Statement:

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

              (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 in the Registration Statement;

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

<PAGE>


         Provided,  however,  that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration  Statement is on S-3 or Form S-8, and the information  required
to be included in a post-effective amendment by those paragraphs is contained in
periodic  reports  filed by the  Company  pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.

         (2) That,  for the  purpose  of  determining  any  liability  under the
Securities Act, 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 the  registration  by  means  of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

         (4) The undersigned  registrant hereby undertakes that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
registrants  annual  report  pursuant to Section  13(a) or Section  15(d) of the
Exchange Act (and, where  applicable,  each filing of an employee benefit plan's
annual  report to Section  15(d) of the Exchange  Act) that is  incorporated  by
reference in the 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.

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



<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  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 or  amendment  thereto to be signed on its behalf by the
undersigned,  thereunto  to duly  authorized,  in the City of Santa Fe  Springs,
State of California on November 10, 1997.

                                   REINHOLD INDUSTRIES, INC.
 
                                   By: /s/  Brett R. Meinsen
                                       Brett R. Meinsen
                                       Vice President-Finance and Administration
                                       Treasurer and Secretary
                                       (Chief Financial Officer)

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  Registration  Statement  and power of  attorney  have  been  signed by the
following persons in the capacities and in the dates indicated.

         By his signature,  each of the following  persons  authorizes  Brett R.
Meinsen and Michael T. Furry or any of them, with full power of substitution, to
execute in his name and on his behalf,  and to file any  amendments  (including,
without limitation,  post-effective  amendments) to this Registration  Statement
necessary  or  advisable  in the opinion of any of them to enable the Company to
comply with the Securities Act, and any rules,  regulations and  requirements of
the Commission thereunder, in connection with the registration of the additional
securities which are the subject of this Registration Statement.

Date:         November 10, 1997                         /s/  Michael T. Furry
                                                       -------------------------
                                                       Michael T. Furry
                                                       President and Director
                                                       Chief Executive Officer

Date:         November 10, 1997                         /s/  Lawrence H. Diamond
                                                       -------------------------
                                                       Lawrence H. Diamond
                                                       Chairman of the Board

Date:         November 10, 1997                         /s/  Robert B. Steinberg
                                                       -------------------------
                                                       Robert B. Steinberg
                                                       Director




<PAGE>


                                  EXHIBIT INDEX

Exhibit Number                   Exhibit

2.1                              Keene  Corporation's  Fourth  Amended  Plan  of
                                 Reorganization   Under   Chapter   11  of   the
                                 Bankruptcy   Code   dated   March   11,   1996,
                                 incorporated  herein by  reference  to  Exhibit
                                 99(a) to  Keene  Corporation's  Form 8-K  filed
                                 with the Commission on June 28, 1996.

2.2                              Motion to  Approve Modifications  to the  Keene
                                 Corporation     Fourth     Amended    Plan   of
                                 Reorganization   Under   Chapter   11   of  the
                                 Bankruptcy    Code   dated   June   12,   1996,
                                 incorporated herein by  reference to Exhibit 99
                                 (b) to Keene Corporation's Form 8-K filed  with
                                 the Commission on June 28, 1996.

2.3                              Finding of Fact,  Conclusions  of Law and Order
                                 Confirming Keene  Corporation's  Fourth Amended
                                 Plan of Reorganization  Under Chapter 11 of the
                                 Bankruptcy Code, as modified,  entered June 14,
                                 1996,   incorporated  herein  by  reference  to
                                 Exhibit 99(c) to Keene  Corporation's  Form 8-K
                                 filed with the Commission on June 28, 1996.

3.1                              Amended    and    restated    Certificate    of
                                 Incorporation  of  Reinhold   Industries, Inc.,
                                 incorporated herein by  reference to Exhibit 99
                                 (a),   Exhibit   A   to  the   Plan,  to  Keene
                                 Corporation's   Form   8-K   filed   with   the
                                 Commission on June 28, 1996.

3.2                              Amended  and   restated   By-laws  of  Reinhold
                                 Industries,  Inc. (Formerly Keene Corporation),
                                 incorporated  herein by  reference  to  Exhibit
                                 99(a),   Exhibit  B  to  the  Plan,   to  Keene
                                 Corporation's   Form   8-K   filed   with   the
                                 Commission on June 28, 1996.

3.3                              Certificate of  Merger of  Reinhold Industries,
                                 Inc.  into   Keene   Corporation,  incorporated
                                 herein by reference to Exhibit 99(a), Exhibit C
                                 to the  Plan, to Keene  Corporation's Form  8-K
                                 filed with the Commission on June 28, 1996.

4.1                              Reinhold Industries, Inc. Stock  Incentive Plan
                                 (filed herewith).

5.1                              Opinion of Petillon & Hansen (filed herewith).

23.1                             Consent  of  Petillon  &  Hansen  (contained in
                                 Exhibit 5.1).

23.2                             Consent of Independent Accountants - KPMG  Peat
                                 Marwick LLP (filed herewith).

24.1                             Power of Attorney (included on signature page).




<PAGE>



                                                                     EXHIBIT 4.1

                            REINHOLD INDUSTRIES, INC.
                              STOCK INCENTIVE PLAN

SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN

         1.1. Establishment.  Reinhold Industries,  Inc., a Delaware corporation
(the "Company"),  hereby establishes the "STOCK INCENTIVE PLAN" (the "Plan") for
key employees.  The Plan permits the grant of Stock Options,  Stock Appreciation
Rights and Restricted Stock.

         1.2.  Purpose.  The purpose of the Plan is to advance the  interests of
the Company  and its  Subsidiaries  and  promote  continuity  of  management  by
encouraging  and  providing  key employees  with the  opportunity  to acquire an
equity interest in the Company and to participate in the increase in shareholder
value as  reflected  in the growth in the price of the  shares of the  Company's
Stock and by  enabling  the  Company to attract  and retain the  services of key
employees.

         1.3.  Effective Date. The Plan shall become  effective on the Effective
Date, as defined in the Debtor's Fourth Amended Plan of  Reorganization of Keene
Corporation, as debtor and debtor-in-possession,  dated March 11, 1996 and filed
with the United States Bankruptcy Court for the Southern District of New York on
March 11, 1996,  as such Plan may be amended or modified  from time to time (the
"Bankruptcy  Plan"),  subject to the  approval by the  affirmative  votes of the
holders of a majority of the securities of the Company entitled to vote.

SECTION 2. DEFINITIONS; CONSTRUCTION

         2.1. Definitions.  Whenever used herein, the following terms shall have
their respective meanings set forth below:

         (a) "Act" means the Securities Exchange Act of 1934, as amended.

         (b) "Board" means the Board of Directors of the Company.

         (c) "Change in  Capitalization"  means any increase or reduction in the
         number of shares of Stock,  or any change  (including,  but not limited
         to, a change in value) in the shares of Stock or  exchange of shares of
         Stock for a different  number or kind of shares or other  securities of
         the Company or any other  corporation  or other entity,  by reason of a
         reclassification,      recapitalization,     merger,     consolidation,
         reorganization,  spin-off,  split-up,  issuance (other than pursuant to
         the Plan of Reorganization) of warrants or rights or debentures,  stock
         dividend,  stock split or reverse stock split,  extraordinary dividend,
         property dividend, combination or exchange of shares or otherwise.

         (d) A "Change in Control"  means an event or series of events after the
         Consummation  Date by which (i) any  "person" or "group" (as such terms
         are  used  in  Section  13 (d)  and  14(d)  of  the  Act)  becomes  the
         "beneficial  owner" (as defined in Rule 13d-3 under the Act),  directly
         or indirectly, of more than fifty (50%) percent of the aggregate voting
         power of all the capital stock of the Company normally entitled to vote
         in  the  election  of  directors  or  (ii)  during  any  period  of two

<PAGE>

         consecutive  calendar  years  individuals  who at the beginning of such
         period  constituted  the Board  (together with any new directors  whose
         election by the Board or whose nomination for election by the Company's
         stockholders  was  approved  by a vote of at  least a  majority  of the
         directors  then  still in  office  who  either  were  directors  at the
         beginning of such period or whose election or nomination was previously
         so  approved)  cease for any reason to  constitute  a  majority  of the
         directors then in office.

         (e) "Code" means the Internal Revenue Code of 1986, as amended.

         (f) "Committee" means a committee of the Board designated to administer
         the Plan which shall consist solely of two or more members of the Board
         who are "disinterested"  within the meaning of Rule 16b-3 under the Act
         and  "outside  directors"  within the meaning of Section  162(m) of the
         Code.

         (g) "Company" means Reinhold Industries,  Inc., a Delaware corporation,
         as successor-in-interest to Keene Corporation.

         (h)  "Disability"  means  that,  for a  period  of six (6)  consecutive
         months,  an individual is unable to engage in any substantial  activity
         required by his  employment  by reason of any  medically  determinable,
         physical  or mental  impairment,  which,  in the  opinion of  qualified
         physicians, is likely to continue for an indefinite period or result in
         the death of the individual within the near future.

         (i)  "Eligible  Employee"  means  any key  employee  designated  by the
         Committee as eligible to  participate  in the Plan  pursuant to Section
         3.1 hereof.

         (j) "Employee  Option" means an Option granted to an Eligible  Employee
         pursuant to Section 6.

         (k) "Fair  Market  Value"  means the mean of the high and low prices at
         which the Stock is  reported  to have  traded on the  relevant  date as
         reported on the NASDAQ Electronic Interdealer Quotation System ("NASDAQ
         System");  and if  there is no trade  on the  relevant  date,  the Fair
         Market  Value  shall mean the mean of the low asked and high bid prices
         on that date as reported on the NASDAQ System.  If the principal market
         for the Stock shall become a national securities exchange then the fair
         market  value  shall  mean the mean of the high and low prices at which
         the Stock is reported to have traded on the relevant date; and if there
         is no trade on the relevant  date, the Fair Market Value shall mean the
         mean of the low asked  and high bid  prices  on that  date.  If no Fair
         Market Value has been  established  in accordance  with the  foregoing,
         Fair Market Value shall be the value  established  by the Board in good
         faith and, in the case of an Incentive Stock Option, in accordance with
         Section 422 of the Code.

         (l) "Option"  means the right to purchase Stock at a stated price for a
         specified  period of time.  For purposes of the Plan,  an Option may be
         either (i) an "incentive  stock  option"  within the meaning of Section
         422 of the Code or (ii) a "nonstatutory stock option."

         (m) "Option  Agreement" means the agreement  evidencing the grant of an
         Option as described in Subsection 6.2.

<PAGE>

         (n)  "Option  Price"  means the price at which  Stock may be  purchased
         pursuant to an Option.

         (o) "Optionee"  means a person to whom an Option has been granted under
         the Plan.

         (p) "Participant"  means an Eligible Employee who has been granted and,
         at the time of reference, holds an Option or share of Restricted Stock.

         (q) "Period of  Restriction"  means the period  during  which shares of
         Restricted  Stock are subject to restrictions  pursuant to Section 9 of
         the Plan.

         (r)  "Restricted  Stock"  means Stock  granted to an Eligible  Employee
         pursuant to Section 9 of the Plan.

         (s)  "Retirement"  means the termination of employment with the Company
         or any  Subsidiary  by  reason of the  attainment  of the age which the
         Company,  by policy or otherwise,  has  established as the age at which
         salaried  employees  may  or  shall  be  required  to  terminate  their
         employment and receive retirement benefits.

         (t)  "Stock"  means the Class A New Common  Stock of the  Company,  par
         value $0.01 per share.

         (u) "Stock  Appreciation Right" means the right to receive the increase
         in the value of Stock subject to an Option in lieu of  purchasing  such
         Stock.

         (v) "Subsidiary" means any present or future subsidiary of the Company,
         as defined in Section 424(f) of the Code.

         2.2. Number.  Except  when  otherwise  indicated by  the  context,  the
singular shall include the plural, and the plural shall include the singular.

SECTION 3. ELIGIBILITY AND PARTICIPATION

         3.1.  Eligibility  and  Participation.  Eligible  Employees in the Plan
shall be  selected by the  Committee  from among  those  officers  and other key
employees  of the  Company  and its  Subsidiaries  who,  in the  opinion  of the
Committee, are in a position to contribute materially to the Company's continued
growth and development and to its long-term financial success.

SECTION 4. STOCK SUBJECT TO PLAN

         4.1.  Number.  The total number of shares of Stock  subject to issuance
under the Plan may not exceed 100,000  subject to adjustment  upon occurrence of
any of the events  indicated in Subsection  4.5. The maximum number of shares of
Stock with respect to which Options or Stock Appreciation  Rights may be granted
to any Eligible  Employee during the term of the Plan cannot exceed 10,000.  The
shares to be  delivered  under  the Plan may  consist,  in whole or in part,  of
authorized  but  unissued  Stock or treasury  Stock,  not reserved for any other
purpose.

         4.2. Unused Stock; Unexercised Rights. In the event any shares of Stock
are  subject  to an  Option,  which for any  reason,  expires  or is  terminated
unexercised  as to such shares,  or any shares of Stock  subject to a Restricted
Stock  grant made  under the Plan are  reacquired  by the  Company  pursuant  to
Section 9 of the Plan,  such shares  again shall become  available  for issuance
under the Plan.

<PAGE>

         4.3.   Exercise  of  Stock   Appreciation   Right.   Whenever  a  Stock
Appreciation  Right,  other than a Stock Appreciation Right described in Section
8.1(a)(ii),  is exercised  and payment of the amount  determined  in  Subsection
8.l(b) is made in cash,  the  shares of Stock  allocable  to the  portion of the
Option  surrendered  may again be the  subject of Options  or  Restricted  Stock
hereunder.  Whenever a Stock  Appreciation Right is exercised and payment of the
amount  determined in Subsection  8.1(b) is made in shares of Stock or any Stock
Appreciation  Right described in Section  8.1(a)(ii) is exercised,  no shares of
Stock with respect to which the Stock  Appreciation Right is exercised may again
be the subject of Options or Restricted Stock hereunder.

         4.4.  Restricted  Stock.  Whenever  any  shares of Stock  granted to an
Eligible  Employee are forfeited  pursuant to Section 9 herein,  such shares may
again be the subject of Options or Restricted Stock  hereunder,  but only if the
Participant  had not been paid any  dividend  or received  any other  benefit of
ownership of such forfeited shares.

         4.5. Adjustment in Capitalization.

         (a) In the event of a Change in  Capitalization,  the  Committee  shall
         conclusively determine the appropriate adjustments,  if any, to the (i)
         maximum  number and class of shares of Stock or other  securities  with
         respect to which Options or  Restricted  Stock may be granted under the
         Plan; (ii) the number and class of shares of Stock or other  securities
         which are subject to  outstanding  Options or Restricted  Stock granted
         under the Plan, and the purchase  price  therefor,  if applicable;  and
         (iii) the maximum  number of shares of Stock or other  securities  with
         respect to which Options or Stock Appreciation Rights may be granted to
         any Eligible Employee during the term of the Plan.

         (b) Any such  adjustment  in the  shares  of Stock or other  securities
         subject  to  outstanding   incentive   stock  options   (including  any
         adjustments in the purchase  price) shall be made in such manner as not
         to  constitute a  modification  as defined by Section  424(h)(3) of the
         Code and only to the extent otherwise permitted by Sections 422 and 424
         of the Code.

         (c)  If,  by  reason  of a  Change  in  Capitalization,  a  grantee  of
         Restricted Stock shall be entitled to, or an Optionee shall be entitled
         to exercise an Option with  respect to, new,  additional  or  different
         shares of stock or securities,  such new additional or different shares
         shall thereupon be subject to all of the conditions,  restrictions  and
         performance  criteria which were applicable to the Restricted  Stock or
         shares of Stock  subject to the  Option,  as the case may be,  prior to
         such Change in Capitalization.

SECTION 5. DURATION OF PLAN

         5.1. Duration of Plan. The Plan shall remain in effect,  subject to the
Board's right to earlier  terminate the Plan pursuant to Subsection 12.3 hereof,
until all Stock subject to it shall have been purchased or acquired  pursuant to
the provisions hereof.  Notwithstanding  the foregoing,  no Option or Restricted
Stock may be  granted  under the Plan on or after the tenth  anniversary  of the
Consummation Date.

<PAGE>

SECTION 6. OPTION GRANTS FOR ELIGIBLE EMPLOYEES

         6.1. Grant of Employee Options. Subject to the provisions of Sections 4
and 5,  Employee  Options may be granted to Eligible  Employees  at any time and
from time to time as shall be determined by the Committee.  The Committee  shall
have complete  discretion  consistent  with the terms of the Plan in determining
whether to grant  Employee  Options  and the  number of Options  granted to each
Eligible Employee. The Committee also shall determine whether an Employee Option
is to be an incentive stock option within the meaning of Section 422 of the Code
or a nonstatutory  stock option.  Nothing in this Section 6 of the Plan shall be
deemed to  prevent  the grant of  nonstatutory  stock  options  in excess of the
maximum established by Section 422 of the Code.

         6.2.  Option  Agreement.  Each Employee Option shall be evidenced by an
Option  Agreement  that shall  specify  the type of Option  granted,  the Option
Price,  the  duration of the Option,  the number of shares of Stock to which the
Option pertains and such other provisions as the Committee shall determine.

         6.3.  Option Price.  The Option Price for each Employee Option shall be
determined by, or in the manner specified by, the Committee;  provided, however,
that no Employee  Option  shall have an Option  Price that is less than the Fair
Market Value of the Stock on the date the Option is granted (110% of Fair Market
Value in the case of an incentive stock option granted to any person who, within
the  meaning of Section  422 of the Code,  owns stock  possessing  more than ten
(10%) percent of the total combined  voting power of all classes of stock of the
Company or any Subsidiary (a "Ten Percent Stockholder")).

         6.4. Duration of Employee Options. Each Employee Option shall expire at
such time as the Committee shall determine at the time it is granted;  provided,
however,  that no  Employee  Option  shall be  exercisable  later than the tenth
anniversary date of its grant (the fifth anniversary in the case of an incentive
stock option granted to a Ten Percent Stockholder).

         6.5.  Exercise of Employee Options;  Vesting.  Employee Options granted
under the Plan shall be exercisable at such times and be subject to such vesting
schedules,  restrictions  and conditions as the Committee shall in each instance
approve,  which  need  not be the  same for all  Eligible  Employees;  provided,
however,  that in no event shall a Participant's rights to exercise such Options
vest more rapidly than 33 1/3% annually, beginning on the first anniversary date
following the granting of such Option.

SECTION 7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS


         7.1. Payment.  The Option Price shall be payable to the Company in full
upon exercise of an Option either (i) in cash or its equivalent,  or (ii) at the
discretion of the Committee,  by tendering  shares of Stock held by the Optionee
for more than six (6) months  having a Fair Market Value at the time of exercise
equal  to the  Option  Price  or (iii) by a  combination  of (i) and  (ii).  The
proceeds  from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.

         7.2.  Restrictions on Stock  Transferability.  The Committee may impose
such restrictions on any shares of Stock acquired pursuant to the exercise of an

<PAGE>

Option under the Plan as it may deem advisable,  including,  without limitation,
restrictions  under applicable Federal securities law, under requirements of any
stock  exchange  upon which such  shares of Stock are then  listed and under any
blue sky or state securities laws applicable to such shares.

         7.3.  Termination  of  Employment  Due to  Retirement  or  Voluntary or
Involuntary  Separation.  The Committee may provide in the Option Agreement that
(i) in the event the  employment  of the  Optionee  is  terminated  by reason of
Retirement,  any  outstanding  Options  granted to the  Optionee  which are then
exercisable shall continue to be exercisable at any time prior to the earlier of
the expiration  date of the Options and one year after the date of  termination,
or (ii) in the event that the  employment of the Optionee is terminated  for any
reason other than Retirement,  death, Disability or Cause (as defined in Section
7.5), any outstanding options granted to the Optionee which are then exercisable
may continue to be exercisable  until the earlier of the expiration date of such
Options  and  three  months  after  the date of  termination.  Any  Options  not
exercisable  upon  Retirement  or  other  termination  except  due to  death  or
Disability shall terminate immediately.

         7.4.  Termination  of  Employment  Due  to  Death  or  Disability.  The
Committee may provide in the Option  Agreement  that in the event the employment
of the Optionee is terminated by reason of death or Disability, the rights under
any then outstanding  Option granted to the Optionee  pursuant to the Plan shall
become fully  exercisable until the earlier of the expiration date of the Option
and one (1) year after the date of such termination,  subject to such exceptions
(which shall be set forth in the Option  Agreement) as the Committee may, in its
sole discretion, approve.

         7.5. Termination of Employment for Cause.  Notwithstanding  anything to
the contrary herein, if the employment of the Optionee shall terminate for Cause
(as defined herein), any then outstanding Option granted pursuant to the Plan to
the Optionee shall terminate immediately;  provided, however, that the Committee
may  waive,  in whole or in part,  the  automatic  forfeiture  of such  Employee
Options and may set forth such waiver or condition in the Option Agreement or at
any other time, including following the termination of employment.  For purposes
of this Plan,  "Cause"  means the  Optionee's  knowingly or  recklessly  causing
material  injury  to the  Company,  the  Optionee's  willful  misconduct  in the
performance of (or failure to perform) his duties  hereunder,  or the Optionee's
dishonest,  fraudulent or unlawful behavior involving moral turpitude whether or
not in connection with his employment.


         7.6.  Non-transferability  and  Exercisability  of  Options.  No Option
granted under the Plan may be sold, transferred,  pledged, assigned or otherwise
alienated or hypothecated,  otherwise than by will or by the laws of descent and
distribution.  Further,  all Options granted to an Optionee under the Plan shall
be exercisable  during his lifetime only by such Optionee.  Notwithstanding  any
provision of the Plan to the contrary,  no Option shall be exercisable  prior to
the time a registration  statement under the Securities Act of 1933 is effective
with respect to the shares of Stock issuable upon the exercise of such Option.

SECTION 8. STOCK APPRECIATION RIGHTS

         8.1. Stock  Appreciation  Rights. The Committee may, in its discretion,
in connection with the grant of an Employee Option,  grant to the Optionee Stock
Appreciation  Rights, the terms and conditions of which shall be set forth in an
agreement as determined by the Committee. A Stock Appreciation Right shall cover
the same shares of Stock  covered by the Option (or such lesser number of shares

<PAGE>

of Stock as the Committee may determine)  and shall,  except as provided in this
Section 8, be subject to the same terms and  conditions  as the related  Option.
Stock  Appreciation   Rights  shall  be  subject  to  the  following  terms  and
provisions:

         (a) A Stock Appreciation Right may be granted:

         (i) either at the time of grant, or at any time  thereafter  during the
         term of the Option if related to a nonstatutory stock option; or

         (ii) only at the time of grant if related to an incentive stock option.

         (b) A Stock  Appreciation  Right will entitle the holder of the related
         Option,  upon exercise of the Stock  Appreciation  Right,  to surrender
         such Option, or any portion thereof to the extent  unexercised,  and to
         receive  payment of an amount  determined by multiplying (i) the excess
         of the Fair Market Value of a share of Stock on the date of exercise of
         such Stock  Appreciation  Right over the  purchase  price of a share of
         Stock  under the  related  Option,  by (ii) the  number of shares as to
         which such Stock Appreciation Right has been exercised. Notwithstanding
         the foregoing, the Committee may limit in any manner the amount payable
         with respect to any Stock  Appreciation Right by including such a limit
         in the agreement evidencing the Stock Appreciation Right at the time it
         is granted.

         (c) A Stock  Appreciation  Right  will be  exercisable  at such time or
         times and only to the extent that a related Option is exercisable,  and
         will not be transferable  except to the extent that such related Option
         may be transferable.  A Stock  Appreciation Right granted in connection
         with an incentive  stock option shall be  exercisable  only if the Fair
         Market  Value of a share of Stock on the date of  exercise  exceeds the
         purchase price of a share of Stock specified in the related Option.


         (d) Upon the exercise of a Stock Appreciation Right, the related Option
         shall be  canceled to the extent of the number of shares of Stock as to
         which the Stock Appreciation Right is exercised,  and upon the exercise
         of an Option granted in connection with a Stock Appreciation Right, the
         Stock  Appreciation Right shall be canceled to the extent of the number
         of shares of Stock as to which the Option is exercised or surrendered.

         (e) Stock Appreciation Rights shall be exercised by an Optionee only by
         a written notice delivered in person or by mail to the Secretary of the
         Company at the Company's  principal  executive  office,  specifying the
         number of shares of Stock with respect to which the Stock  Appreciation
         Right is being exercised.  If requested by the Committee,  the Optionee
         shall deliver the agreement  evidencing  the Stock  Appreciation  Right
         being exercised and the agreement  evidencing any related Option to the
         Secretary of the Company who shall  endorse  thereon a notation of such
         exercise and return such agreement to the Optionee.

         (f) Payment of the amount  determined  under Section 8.1(b) may be made
         by the  Company in the  discretion  of the  Committee,  solely in whole
         shares of Stock in a number  determined  at their Fair Market  Value on
         the date  preceding  the date of  exercise  of the  Stock  Appreciation

<PAGE>

         Right, or solely in cash, or in a combination of cash and Stock. If the
         Committee  decides to make full payment in Stock and the amount payable
         results in a fractional share, payment for the fractional share will be
         made in cash.  Notwithstanding the foregoing, no payment in the form of
         cash may be made upon the exercise of a Stock  Appreciation Right to an
         officer of the Company or a Subsidiary  who is subject to Section 16 of
         the Exchange Act, unless the exercise of such Stock  Appreciation Right
         is made either (i) during the period  beginning  on the third  business
         day and  ending  on the  twelfth  business  day  following  the date of
         release for publication of the Company's quarterly or annual statements
         of sales and earnings or (ii)  pursuant to an  irrevocable  election to
         receive cash made at least six (6) months prior to the exercise of such
         Stock Appreciation Right.

         (g) No Stock  Appreciation  Right may be exercised  before the date six
         (6) months after the date it is granted.

         (h)  Subject  to the  terms  of the  Plan,  the  Committee  may  modify
         outstanding awards of Stock Appreciation Rights or accept the surrender
         of outstanding awards of Stock  Appreciation  Rights (to the extent not
         exercised)   and  grant   new   awards   in   substitution   for  them.
         Notwithstanding  the foregoing,  no  modification  of an award of Stock
         Appreciation  Rights  shall  adversely  alter or impair  any  rights or
         obligations under the agreement granting such Stock Appreciation Rights
         without the Optionee's consent.

SECTION 9. RESTRICTED STOCK

         9.1. Grant of Restricted Stock;  Vesting.  Subject to the provisions of
Sections 4 and 5, the  Committee,  at any time and from time to time,  may grant
shares of Restricted Stock under the Plan to such Eligible Employees and in such
amounts as it shall determine in its sole  discretion.  Each grant of Restricted
Stock shall be made  pursuant to a written  agreement  which shall  contain such
restrictions,  terms  and  conditions  as the  Committee  may  determine  in its
discretion.  Restrictions  upon shares of  Restricted  Stock shall lapse at such
time or times and on such terms and  conditions as the Committee may  determine;
provided,  however, that in no event shall such restrictions on vesting lapse at
rate more rapidly, on an annual basis, than 33 1/3% of the number of shares such
Restricted  Stock subject to such grant beginning on the first  anniversary date
following the grant of such Restricted Stock.

         9.2. Transferability.  Except as provided in this Section 9, the shares
of Restricted  Stock granted  hereunder may not be sold,  transferred,  pledged,
assigned or otherwise alienated or hypothecated for such period of time as shall
be determined by the  Committee and shall be specified in the  Restricted  Stock
grant,  or upon earlier  satisfaction  of other  conditions  as specified by the
Committee in its sole  discretion and set forth in the  Restricted  Stock grant;
provided,  however, that Restricted Stock granted to officers,  directors or any
person who owns,  directly  or  indirectly,  more than ten (10%)  percent of any
class of equity security of the Company which is registered  pursuant to Section
13 of the Act may not be sold  for at least  six (6)  months  after  the date of
grant.

         9.3.   Other   Restrictions.   The  Committee  may  impose  such  other
restrictions on any shares of Restricted Stock granted to any Eligible  Employee
pursuant to the Plan as it may deem  advisable  including,  without  limitation,
restrictions  under applicable  federal or state securities laws, and may legend
the certificates  representing  Restricted  Stock to give appropriate  notice of
such restrictions.

<PAGE>

         9.4.   Certificate  Legend.  In  addition  to  any  legends  placed  on
certificates  pursuant to Subsection 9.3 hereof,  each certificate  representing
shares of Restricted Stock granted pursuant to the Plan shall bear the following
legend:

         "The sale or other transfer of the shares of stock  represented by this
         certificate,  whether voluntary, involuntary or by operation of law, is
         subject to certain  restrictions  on transfer set forth in the Reinhold
         Industries,  Inc. Stock Incentive Plan, rules of administration adopted
         pursuant to such Plan and a Restricted Stock grant dated. A copy of the
         Plan, such rules and such  Restricted  Stock grant may be obtained from
         the Secretary of Reinhold Industries, Inc."


         9.5.  Removal of  Restrictions.  Except as  otherwise  provided in this
Section 9, shares of  Restricted  Stock covered by each  Restricted  Stock grant
made under the Plan shall become freely  transferable  by the Eligible  Employee
after the last day of the Period of  Restriction.  Once the shares are  released
from the  restrictions,  the  Eligible  Employee  shall be  entitled to have the
legend required by Subsection 9.4 removed from his or her Stock certificate.

         9.6.  Voting  Rights.  During  the  Period  of  Restriction,   Eligible
Employees holding shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those shares.

         9.7.   Dividends  and  Other   Distributions.   During  the  Period  of
Restriction,  Eligible  Employees  holding  shares of  Restricted  Stock granted
hereunder  shall be entitled to receive all  dividends  and other  distributions
paid with respect to those shares while they are so held. If any such  dividends
or distributions are paid in shares of Stock, the shares shall be subject to the
same  restrictions  on  transferability  as the shares of Restricted  Stock with
respect to which they were paid.

SECTION 10. BENEFICIARY DESIGNATION

         10.1. Beneficiary Designation. Subject to Subsections 7.6 and 9.2, each
Participant  under the Plan  may,  from time to time,  name any  beneficiary  or
beneficiaries  (who  may be  named  contingently  or  successively)  to whom any
benefit under the Plan is to be paid in case of the  Participant's  death before
he or she receives any or all of such benefit.  Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee and will be effective  only when filed by the  Participant  in writing
with the Committee during the lifetime of the Participant. In the absence of any
such designation,  benefits remaining unpaid at the Participant's death shall be
paid to the estate of the Participant.

SECTION 11. RIGHTS OF EMPLOYEES

         11.1.  Employment.  The  selection  of any person to receive an Option,
Stock  Appreciation Right or Restricted Stock hereunder shall not interfere with
or limit in any way the right of the Company or any Subsidiary to terminate such
Participant's  employment  at any time and shall not give such  Participant  any
right to continue as an employee of the Company or any Subsidiary.

<PAGE>

         11.2.  Participation.  No employee shall have a right to be selected as
an Eligible  Employee or,  having been so selected,  to be selected  again as an
Optionee or recipient of Restricted  Stock.  Each grant of Options or Restricted
Stock  hereunder shall be separate and distinct from every other grant and shall
not be  construed  either to give or deny the  grantee  the right to be  granted
additional benefits under the Plan.

         11.3.  Plan Not Exclusive.  The Plan is not exclusive.  The Company may
have other  plans,  programs  and  arrangements  for the grant of  options,  the
issuance of shares or other  compensation.  The Plan does not  require  that any
Optionee  or  holder of  Restricted  Stock  participate,  or be  precluded  from
participation, in such other plans, programs and arrangements.

SECTION 12. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE

         12.1.  Administration.  The  Committee  shall  be  responsible  for the
administration  of the Plan.  The  Committee,  by majority  action  thereof,  is
authorized to interpret the Plan,  to  prescribe,  amend,  and rescind rules and
regulations  relating to the Plan,  to provide  for  conditions  and  assurances
deemed  necessary or advisable to protect the  interests of the Company,  and to
make all other  determinations  necessary or advisable for the administration of
the Plan,  but only to the extent not contrary to the express  provisions of the
Plan.  Determinations,  interpretations,  or other  actions made or taken by the
Committee  pursuant to the provisions of the Plan shall be final and binding and
conclusive  for all purposes and upon all persons  whomsoever.  No member of the
Committee  shall  be  personally   liable  for  any  action,   determination  or
interpretation  made or taken with  respect  to the Plan and all  members of the
Committee  shall be fully  indemnified  by the Company  with respect to any such
action, determination or interpretation.

         12.2.  Change  in  Control.  Without  limiting  the  authority  of  the
Committee as provided herein, the Committee, either at the time Employee Options
or shares of Restricted Stock are granted,  or, if so provided in the applicable
Option Agreement or Restricted Stock grant, at any time thereafter,  shall [have
the authority to accelerate in whole or in part the  exercisability  of Employee
Options  and/or  the last day of the  Period  of  Restriction  upon a Change  in
Control.  The Option  Agreements  and  Restricted  Stock grants  approved by the
Committee may contain provisions  whereby,  in the event of a Change in Control,
the acceleration of the  exercisability  of Employee Options and/or the last day
of the  Period  of  Restriction  may be  automatic  or  may  be  subject  to the
discretion  of the  Committee  or may depend upon  whether the Change in Control
shall be  approved  by a  majority  of the  members  of the Board or such  other
criteria as the  Committee  may  specify.  Nothing  herein  shall  obligate  the
Committee to take any action upon a Change in Control.


         12.3. Amendment, Modification and Termination of Plan. The Board may at
any  time  terminate,  and from  time to time may  amend  or  modify  the  Plan;
provided,  however,  that no such action of the Board,  without  approval of the
stockholders, may:

         (a)  Increase  the total  amount of Stock which may be issued under the
         Plan, except as provided in Subsection 4.5 of the Plan.

         (b) Materially increase the cost of the Plan or materially increase the
         benefits to Participants.

<PAGE>


         (c) Extend the period during which  Options or Restricted  Stock may be
         granted.

         (d) Extend the  maximum  period  after the date of grant  during  which
         Options may be exercised.

         (e)  Change the class of  individuals  eligible  to receive  Options or
         Restricted Stock.

          Any amendment  which  requires  stockholder  approval in order for the
Plan to  continue  to  comply  with  Rule  16b-3  of the Act or any  other  law,
regulation or stock exchange  requirement shall not be effective unless approved
by the requisite vote of stockholders. No amendment, modification or termination
of the Plan shall in any manner adversely affect any Options or Restricted Stock
theretofore  granted to any Participant  under the Plan,  without the consent of
that Participant.

         12.4.   Interpretation.   Unless  otherwise  expressly  stated  in  the
agreement  governing,  any  grant of  Options,  Stock  Appreciation  Rights  and
Restricted Stock, such grant, as the case may be, is intended to be compensation
within the meaning of Section  162(m)(4)(C) of the Code. The Committee shall not
be entitled to exercise  any  discretion  otherwise  authorized  hereunder  with
respect  to such  Options if the  ability to  exercise  such  discretion  or the
exercise of such discretion itself would cause the compensation  attributable to
such Options to fail to qualify as such compensation.

SECTION 13. TAX WITHHOLDING

         13.1.  Tax  Withholding.  (a) At such  times  as an  Eligible  Employee
recognizes  taxable  income in  connection  with the  receipt  of shares or cash
hereunder (a "Taxable Event"), the Eligible Employee shall pay to the Company an
amount equal to the federal,  state and local income taxes and other  amounts as
may be required by law to be  withheld  by the  Company in  connection  with the
Taxable Event (the "Withholding  Taxes") prior to the issuance,  or release from
escrow,  of such shares or the payment of such cash.  The Company shall have the
right to deduct from any payment of cash to an Eligible Employee an amount equal
to the  Withholding  Taxes in  satisfaction of the obligation to pay Withholding
Taxes.  In  satisfaction  of his  obligation  to pay  Withholding  Taxes  to the
Company, the Eligible Employee may make a written election (the "Tax Election"),
which may be accepted or rejected in the  discretion of the  Committee,  to have
withheld  a  portion  of the  shares of Stock  then  issuable  to him  having an
aggregate  Fair Market Value,  on the date  preceding the date of such issuance,
equal to the Withholding Taxes, provided that in respect of an Eligible Employee
who may be subject to liability  under Section 16(b) of the Exchange Act either:
(i) the Tax  Election  is made at least six (6) months  prior to the date of the
Taxable  Event and the Tax Election is  irrevocable  with respect to all Taxable
Events of a similar nature  occurring  prior to the expiration of six (6) months
following a revocation of the Tax Election;  or (ii) in the case of the exercise
of an Option (A) the  Optionee  makes the Tax  Election  at least six (6) months
after the date the Option was granted,  (B) the Option is  exercised  during the
ten (10) day  period  beginning  on the  third  business  day and  ending on the
twelfth  business day  following  the release for  publication  of the Company's
quarterly or annual  statement of sales and earnings (a "Window Period") and (C)
the Tax Election is made during the Window Period in which the related Option is
exercised  or prior to such  Window  Period and  subsequent  to the  immediately
preceding Window Period; or (iii) in the case of a Taxable Event relating to the
grant of shares of  Restricted  Stock (A) the  Eligible  Employee  makes the Tax

<PAGE>


Election  at least six (6) months  after the date such stock was granted and (B)
the Tax Election is made (x) in the case of a Taxable Event  occurring  within a
Window  Period,  during the Window Period in which the Taxable Event occurs,  or
(y) in the case of a Taxable Event not occurring within a Window Period,  during
the Window  Period  immediately  preceding  the Taxable  Event  relating to such
Restricted  Stock.  Notwithstanding  the  foregoing,  the Committee  may, by the
adoption of rules or otherwise,  (i) modify the  provisions of this Section 13.1
or impose such other  restrictions  or  limitations  on Tax  Elections as may be
necessary to ensure that the Tax  Elections  will be exempt  transactions  under
Section  16(b) of the Exchange  Act, and (ii) permit Tax Elections to be made at
such  other  times  and  subject  to  such  other  conditions  as the  Committee
determines will constitute exempt transactions under Section 16(b) of the Act.

SECTION 14. REQUIREMENTS OF LAW

         14.1. Requirements of Law. The granting of Options or Restricted Stock,
and the  issuance  of shares of Stock upon the  exercise  of an Option  shall be
subject to all applicable laws, rules and regulations,  and to such approvals by
any governmental agencies or national securities exchanges as may be required.

         14.2. Governing Law. The Plan, and all agreements  hereunder,  shall be
construed in  accordance  with and governed by the laws of the State of New York
without  giving effect to the choice of law  principles  thereof,  except to the
extent that such law is preempted by federal law.



<PAGE>
                                                         
                                                                     EXHIBIT 5.1

                                 Law Offices of
                                PETILLON & HANSEN
                   A Partnership of Professional Corporations
                              1260 Union Bank Tower
                            21515 Hawthorne Boulevard
                           Torrance, California 90503
                           Telephone (310) 543 - 0500
                           Facsimile (310) 543 - 0550


                                November 10, 1997


Reinhold Industries, Inc.
12827 E. Imperial Highway
Santa Fe Springs, CA 90670-4713

RE:      Registration Statement on Form S-8
         Stock Incentive Plan

Ladies and Gentlemen:

We have examined the Registration  Statement on Form S-8 to be filed by Reinhold
Industries, Inc., a Delaware corporation (the "Company") with the Securities and
Exchange  Commission  in  connection  with the  registration  by the  Company of
100,000 shares (the  "Shares") of its Class A New Common Stock,  $.01 par value,
reserved for issuance under the Company's Stock Incentive Plan (the "Plan").  We
advise you that, in our opinion,  upon completion of the actions contemplated by
us as your  counsel  to be taken  by you  prior to the  issuance  of the  Shares
pursuant to the Registration  Statement and the Plan, and upon completion of the
actions to permit such  transactions  to be carried out in  accordance  with the
securities laws of the various states where required, the Shares will be validly
issued, fully paid and nonassessable shares of Common Stock.

We  hereby  consent  to  the  filing  of  this  opinion  as an  exhibit  to  the
Registration Statement.

Very truly yours,


/S/  Petillon & Hansen
PETILLON & HANSEN



<PAGE>


                                                                    EXHIBIT 23.2

                       Consent of Independent Accountants

The Board of Directors
Reinhold Industries, Inc.:

We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statement  on Form S-8 of Reinhold  Industries,  Inc.  for the  registration  of
100,000  shares of its common stock of our report dated January 17, 1997, on our
audits of the financial statements of Reinhold  Industries,  Inc. as of December
31, 1996 and for the year ended  December 31,  1995,  the period from January 1,
1996 through July 31, 1996 (the  Predecessor  Company),  and for the period from
August 1, 1996 through December 31, 1996 (the Reorganized Company),  included in
Reinhold  Industries,  Inc.'s 1996 Annual  Report on Form 10-KSB  filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1934.

                                                    

Los Angeles, California
November 10, 1997
                                           
                                               /S/ KPMG Peat Marwick LLP
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 64540}]
{"company-data": {"conformed-name": "REINHOLD INDUSTRIES INC/DE/", "cik": "0000862255", "assigned-sic": "3728", "irs-number": "132596288", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-39925", "film-number": "97712339"}, "business-address": {"street1": "12827 EAST IMPERIAL HWY", "city": "SANTA FE SPRINGS", "state": "CA", "zip": "90670-4713", "phone": "310-944-3281"}, "mail-address": {"street1": "12827 EAST IMPERIAL HWY", "city": "SANTA FE SPRINGS", "state": "CA", "zip": "90670"}, "former-company": {"former-conformed-name": "KEENE CORP /DE/", "date-changed": "19930328"}}
As filed with the Securities and Exchange Commission on November 10, 1997

                                         Registration No. _______________

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM S-8

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                            REINHOLD INDUSTRIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

   Delaware                                               13-2596288
--------------------------------------------------------------------------------
(State or other jurisdiction                             (I.R.S. Employer
   of incorporation)                                      Indentification No.)

12827 East Imperial Hwy, Santa Fe Springs, CA             90670
--------------------------------------------------------------------------------
(Address of principal executive offices)                 (Zip code)

                            REINHOLD INDUSTRIES, INC.
                              STOCK INCENTIVE PLAN
--------------------------------------------------------------------------------
                            (Full title of the plan)

                                Brett R. Meinsen
                     Vice President, Secretary and Treasurer
                            Reinhold Industries, Inc.
                             12827 East Imperial Hwy
                           Santa Fe Springs, CA 90670
                                (562) 944 - 3281
--------------------------------------------------------------------------------
            (Name, address, and telephone number of agent for service

                         CALCULATION OF REGISTRATION FEE
================================================================================
                                          Proposed    Proposed
                                          maximum     maximum
                            Amount        offering    aggregate     Amount of
Title of securities         to be         price per   offering      registration
to be registered            registered    share (1)   price (1)     fee
--------------------------------------------------------------------------------
Class A Common Stock,       100,000
 $.01 par value per share   shares        $10.00      $1,000,000      $303.03
--------------------------------------------------------------------------------

(1)  Estimated  solely for the purpose of  calculating  registration  fee on the
basis of the average of the bid  ($10.00)  and asked  ($10.00)  price paid for a
share of  Reinhold  Class A Common  Stock on November 7, 1997 as reported on the
NASD OTC Bulletin Board.
PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.     INCORPORATION OF DOCUMENTS BY REFERENCE

         The  following  documents,  which are on file with the  Securities  and
Exchange  Commission,   are  incorporated  in  this  Registration  Statement  by
reference:

         a.   The Reinhold  Industries,  Inc. (the  "Company")  Annual Report on
              Form  10-KSB,  as amended,  for the year ended  December 31, 1996,
              filed with the Commission on March 20, 1997.

         b.   The  Company's  Quarterly  Reports on Form 10-QSB for the quarters
              ended March 31, 1997, June 30, 1997 and September 30, 1997,  filed
              pursuant to Section 13 of the Securities Exchange Act of 1934 (the
              "Exchange Act").

         c.   The  description  of the  Company's  Capital  Stock  contained  in
              Article IV of the Company's  Amended and Restated  Certificate  of
              Incorporation  filed with the  Commission on June 28, 1996 as part
              of the  Company's  8-K,  Exhibit  99(a),  Exhibit  A to the  Keene
              Corporation Fourth Amended Plan of  Reorganization,  together with
              all  amendments  or reports filed for the purpose of updating such
              description to the extent of such updating.

               All  documents  subsequently  filed by the  Company  pursuant  to
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a  post-effective  amendment which indicates that all securities  hereby offered
have been sold or which deregisters all securities then remaining unsold,  shall
be deemed to be incorporated by reference  herein and to be part hereof from the
respective dates of filing of such reports and documents.

         Any  statement  contained  in a document  incorporated  or deemed to be
incorporated  by reference  herein shall be deemed to be modified or  superseded
for the purposes of this  Registration  Statement to the extent that a Statement
contained  herein or in any other  subsequently  filed  document  which  also is
incorporated  or is deemed to be  incorporated  by reference  herein modified or
superseded  such statement.  Any such statement so modified or superseded  shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.

Item 4.     DESCRIPTION OF SECURITIES

         Not Applicable.

Item 5.       INTERESTS OF NAMED EXPERTS AND COUNSEL

         Not Applicable.
Item 6.     INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Article  VII of the  Company's  Amended  and  Restated  Certificate  of
Incorporation provides as follows:

                                   ARTICLE VII

         1. The  Corporation  shall  indemnify to the fullest  extent  permitted
under and in  accordance  with the laws of the State of Delaware  any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or  investigative  by reason of the fact that he is or was a director,  officer,
employee  or  agent  of or in  any  other  capacity  with  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.

         2.  Expenses  (including  attorneys'  fees)  incurred in defending  any
civil,  criminal,  administrative  or investigative  action,  suit or proceeding
shall (in the case of any action,  suit or proceeding  against a director of the
Corporation)  or may (in the case of any action,  suit or proceeding  against an
officer,  trustee,  employee or agent) be paid by the  Corporation in advance of
the final  disposition  of such action,  suit or proceeding as authorized by the
Board upon receipt of an undertaking by or on behalf of the  indemnified  person
to  repay  such  amount  if it shall  ultimately  be  determined  that he is not
entitled to be indemnified by the Corporation as authorized in this paragraph.

         3. The  indemnification,  advancement  of expenses and other rights set
forth in this Paragraph  shall not be exclusive of any  provisions  with respect
thereto  in  the  by-laws  or  any  other  contract  or  agreement  between  the
Corporation and any officer, director, employee or agent of the Corporation.

         4. Neither the amendment nor repeal of this Article VII,  subparagraphs
1,  2  or  3,  nor  the  adoption  of  any  provision  of  this  Certificate  of
Incorporation  inconsistent  with  Article VII,  subparagraphs  1, 2 or 3, shall
eliminate or reduce the effect of this Article VII, subparagraphs 1, 2 and 3, in
respect of any matter occurring before such amendment,  repeal or adoption of an
inconsistent  provision  or in  respect  of any cause of  action,  suit or claim
relating  to any  such  matter  which  would  have  given  rise  to a  right  of
indemnification  or right to receive  expenses  pursuant  to this  Article  VII,
subparagraphs  1, 2 or 3, if such  provision had not been so amended or repealed
or if a provision inconsistent therewith had not been so adopted.

         5. No director  shall be personally  liable to the  Corporation  or any
stockholder  for monetary  damages for breach of  fiduciary  duty as a director,
except for any matter in  respect  of which  such  director  (A) shall be liable
under  Section 174 of the DGCL or any amendment  thereto or successor  provision
thereto, or (B) shall be liable by reason that, in addition to any and all other
requirements  for liability,  he: (i) shall have breached his duty of loyalty to
the Corporation or its stockholders; (ii) shall not have acted in good faith or,
in failing to act, shall not have acted in good faith; (iii) shall have acted in
a manner involving  intentional  misconduct or a knowing violation of law or, in
failing to act, shall have acted in a manner involving intentional misconduct or
a knowing  violation  of law; or (iv) shall have  derived an  improper  personal
benefit.

         If the Delaware  General  Corporation  Law is amended after the date of
incorporation  of  the  Corporation  to  authorize  corporation  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 Delaware General Corporation Law, as so amended.

         6. This Certificate of Merger shall be effective on or such date as the
Order herein above referred to shall provide.

         The Company currently  maintains  policies of insurance under which the
directors and officers of the Company are insured, within the limits and subject
to the limitations of the policies,  against certain expenses in connection with
the defense of actions,  suits or  proceedings,  and certain  liabilities  which
might be imposed as a result of such  actions,  suits or  proceedings,  to which
they are parties by reason of being or having been such directors or officers.

Item 7.     EXEMPTION FROM REGISTRATION CLAIMED

         Not Applicable.

Item 8.     EXHIBITS

         See Exhibit Index.

Item 9.     UNDERTAKINGS

         The Company hereby undertakes:

         (1) To file during any period in which  offers or sales are being made,
post-effective amendment(s) to this Registration Statement:

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

              (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 in the Registration Statement;

              (iii)To include any material information with respect to the plan
                  of distribution  not previously  disclosed in the Registration
                  Statement or any material  change to such  information  in the
                  Registration Statement;
Provided,  however,  that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration  Statement is on S-3 or Form S-8, and the information  required
to be included in a post-effective amendment by those paragraphs is contained in
periodic  reports  filed by the  Company  pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.

         (2) That,  for the  purpose  of  determining  any  liability  under the
Securities Act, 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 the  registration  by  means  of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

         (4) The undersigned  registrant hereby undertakes that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
registrants  annual  report  pursuant to Section  13(a) or Section  15(d) of the
Exchange Act (and, where  applicable,  each filing of an employee benefit plan's
annual  report to Section  15(d) of the Exchange  Act) that is  incorporated  by
reference in the 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.

         (5) Insofar as the  indemnification  for liabilities  arising under the
Securities Act may be permitted to directors,  officers and controlling  persons
of the  Company  pursuant  to the  foregoing  provisions,  the  Company has been
advised  that in the opinion of the  Securities  and Exchange  Commission,  such
indemnification  is against public policy as expressed in the Securities Act and
is,  therefore,  unenforceable.  In the event  that a claim for  indemnification
against  such  liabilities  (other than the payment by the Company for  expenses
incurred or paid by a director,  officer or controlling person of the Company in
the successful defense of any action,  suit or proceeding) is asserted by such a
director,  officer or controlling person in connection with the securities being
registered,  the Company  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  Securities  Act, and will be governed by the final
adjudication of such issue.
SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  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 or  amendment  thereto to be signed on its behalf by the
undersigned,  thereunto  to duly  authorized,  in the City of Santa Fe  Springs,
State of California on November 10, 1997.

                                   REINHOLD INDUSTRIES, INC.
 
                                   By: /s/  Brett R. Meinsen
                                       Brett R. Meinsen
                                       Vice President-Finance and Administration
                                       Treasurer and Secretary
                                       (Chief Financial Officer)

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  Registration  Statement  and power of  attorney  have  been  signed by the
following persons in the capacities and in the dates indicated.

         By his signature,  each of the following  persons  authorizes  Brett R.
Meinsen and Michael T. Furry or any of them, with full power of substitution, to
execute in his name and on his behalf,  and to file any  amendments  (including,
without limitation,  post-effective  amendments) to this Registration  Statement
necessary  or  advisable  in the opinion of any of them to enable the Company to
comply with the Securities Act, and any rules,  regulations and  requirements of
the Commission thereunder, in connection with the registration of the additional
securities which are the subject of this Registration Statement.

Date:         November 10, 1997                         /s/  Michael T. Furry
                                                       -------------------------
                                                       Michael T. Furry
                                                       President and Director
                                                       Chief Executive Officer

Date:         November 10, 1997                         /s/  Lawrence H. Diamond
                                                       -------------------------
                                                       Lawrence H. Diamond
                                                       Chairman of the Board

Date:         November 10, 1997                         /s/  Robert B. Steinberg
                                                       -------------------------
                                                       Robert B. Steinberg
                                                       Director
EXHIBIT INDEX

Exhibit Number                   Exhibit

2.1                              Keene  Corporation's  Fourth  Amended  Plan  of
                                 Reorganization   Under   Chapter   11  of   the
                                 Bankruptcy   Code   dated   March   11,   1996,
                                 incorporated  herein by  reference  to  Exhibit
                                 99(a) to  Keene  Corporation's  Form 8-K  filed
                                 with the Commission on June 28, 1996.

2.2                              Motion to  Approve Modifications  to the  Keene
                                 Corporation     Fourth     Amended    Plan   of
                                 Reorganization   Under   Chapter   11   of  the
                                 Bankruptcy    Code   dated   June   12,   1996,
                                 incorporated herein by  reference to Exhibit 99
                                 (b) to Keene Corporation's Form 8-K filed  with
                                 the Commission on June 28, 1996.

2.3                              Finding of Fact,  Conclusions  of Law and Order
                                 Confirming Keene  Corporation's  Fourth Amended
                                 Plan of Reorganization  Under Chapter 11 of the
                                 Bankruptcy Code, as modified,  entered June 14,
                                 1996,   incorporated  herein  by  reference  to
                                 Exhibit 99(c) to Keene  Corporation's  Form 8-K
                                 filed with the Commission on June 28, 1996.

3.1                              Amended    and    restated    Certificate    of
                                 Incorporation  of  Reinhold   Industries, Inc.,
                                 incorporated herein by  reference to Exhibit 99
                                 (a),   Exhibit   A   to  the   Plan,  to  Keene
                                 Corporation's   Form   8-K   filed   with   the
                                 Commission on June 28, 1996.

3.2                              Amended  and   restated   By-laws  of  Reinhold
                                 Industries,  Inc. (Formerly Keene Corporation),
                                 incorporated  herein by  reference  to  Exhibit
                                 99(a),   Exhibit  B  to  the  Plan,   to  Keene
                                 Corporation's   Form   8-K   filed   with   the
                                 Commission on June 28, 1996.

3.3                              Certificate of  Merger of  Reinhold Industries,
                                 Inc.  into   Keene   Corporation,  incorporated
                                 herein by reference to Exhibit 99(a), Exhibit C
                                 to the  Plan, to Keene  Corporation's Form  8-K
                                 filed with the Commission on June 28, 1996.

4.1                              Reinhold Industries, Inc. Stock  Incentive Plan
                                 (filed herewith).

5.1                              Opinion of Petillon & Hansen (filed herewith).

23.1                             Consent  of  Petillon  &  Hansen  (contained in
                                 Exhibit 5.1).

23.2                             Consent of Independent Accountants - KPMG  Peat
                                 Marwick LLP (filed herewith).

24.1                             Power of Attorney (included on signature page).
EXHIBIT 4.1

                            REINHOLD INDUSTRIES, INC.
                              STOCK INCENTIVE PLAN

SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN

         1.1. Establishment.  Reinhold Industries,  Inc., a Delaware corporation
(the "Company"),  hereby establishes the "STOCK INCENTIVE PLAN" (the "Plan") for
key employees.  The Plan permits the grant of Stock Options,  Stock Appreciation
Rights and Restricted Stock.

         1.2.  Purpose.  The purpose of the Plan is to advance the  interests of
the Company  and its  Subsidiaries  and  promote  continuity  of  management  by
encouraging  and  providing  key employees  with the  opportunity  to acquire an
equity interest in the Company and to participate in the increase in shareholder
value as  reflected  in the growth in the price of the  shares of the  Company's
Stock and by  enabling  the  Company to attract  and retain the  services of key
employees.

         1.3.  Effective Date. The Plan shall become  effective on the Effective
Date, as defined in the Debtor's Fourth Amended Plan of  Reorganization of Keene
Corporation, as debtor and debtor-in-possession,  dated March 11, 1996 and filed
with the United States Bankruptcy Court for the Southern District of New York on
March 11, 1996,  as such Plan may be amended or modified  from time to time (the
"Bankruptcy  Plan"),  subject to the  approval by the  affirmative  votes of the
holders of a majority of the securities of the Company entitled to vote.

SECTION 2. DEFINITIONS; CONSTRUCTION

         2.1. Definitions.  Whenever used herein, the following terms shall have
their respective meanings set forth below:

         (a) "Act" means the Securities Exchange Act of 1934, as amended.

         (b) "Board" means the Board of Directors of the Company.

         (c) "Change in  Capitalization"  means any increase or reduction in the
         number of shares of Stock,  or any change  (including,  but not limited
         to, a change in value) in the shares of Stock or  exchange of shares of
         Stock for a different  number or kind of shares or other  securities of
         the Company or any other  corporation  or other entity,  by reason of a
         reclassification,      recapitalization,     merger,     consolidation,
         reorganization,  spin-off,  split-up,  issuance (other than pursuant to
         the Plan of Reorganization) of warrants or rights or debentures,  stock
         dividend,  stock split or reverse stock split,  extraordinary dividend,
         property dividend, combination or exchange of shares or otherwise.

         (d) A "Change in Control"  means an event or series of events after the
         Consummation  Date by which (i) any  "person" or "group" (as such terms
         are  used  in  Section  13 (d)  and  14(d)  of  the  Act)  becomes  the
         "beneficial  owner" (as defined in Rule 13d-3 under the Act),  directly
         or indirectly, of more than fifty (50%) percent of the aggregate voting
         power of all the capital stock of the Company normally entitled to vote
         in  the  election  of  directors  or  (ii)  during  any  period  of two
consecutive  calendar  years  individuals  who at the beginning of such
         period  constituted  the Board  (together with any new directors  whose
         election by the Board or whose nomination for election by the Company's
         stockholders  was  approved  by a vote of at  least a  majority  of the
         directors  then  still in  office  who  either  were  directors  at the
         beginning of such period or whose election or nomination was previously
         so  approved)  cease for any reason to  constitute  a  majority  of the
         directors then in office.

         (e) "Code" means the Internal Revenue Code of 1986, as amended.

         (f) "Committee" means a committee of the Board designated to administer
         the Plan which shall consist solely of two or more members of the Board
         who are "disinterested"  within the meaning of Rule 16b-3 under the Act
         and  "outside  directors"  within the meaning of Section  162(m) of the
         Code.

         (g) "Company" means Reinhold Industries,  Inc., a Delaware corporation,
         as successor-in-interest to Keene Corporation.

         (h)  "Disability"  means  that,  for a  period  of six (6)  consecutive
         months,  an individual is unable to engage in any substantial  activity
         required by his  employment  by reason of any  medically  determinable,
         physical  or mental  impairment,  which,  in the  opinion of  qualified
         physicians, is likely to continue for an indefinite period or result in
         the death of the individual within the near future.

         (i)  "Eligible  Employee"  means  any key  employee  designated  by the
         Committee as eligible to  participate  in the Plan  pursuant to Section
         3.1 hereof.

         (j) "Employee  Option" means an Option granted to an Eligible  Employee
         pursuant to Section 6.

         (k) "Fair  Market  Value"  means the mean of the high and low prices at
         which the Stock is  reported  to have  traded on the  relevant  date as
         reported on the NASDAQ Electronic Interdealer Quotation System ("NASDAQ
         System");  and if  there is no trade  on the  relevant  date,  the Fair
         Market  Value  shall mean the mean of the low asked and high bid prices
         on that date as reported on the NASDAQ System.  If the principal market
         for the Stock shall become a national securities exchange then the fair
         market  value  shall  mean the mean of the high and low prices at which
         the Stock is reported to have traded on the relevant date; and if there
         is no trade on the relevant  date, the Fair Market Value shall mean the
         mean of the low asked  and high bid  prices  on that  date.  If no Fair
         Market Value has been  established  in accordance  with the  foregoing,
         Fair Market Value shall be the value  established  by the Board in good
         faith and, in the case of an Incentive Stock Option, in accordance with
         Section 422 of the Code.

         (l) "Option"  means the right to purchase Stock at a stated price for a
         specified  period of time.  For purposes of the Plan,  an Option may be
         either (i) an "incentive  stock  option"  within the meaning of Section
         422 of the Code or (ii) a "nonstatutory stock option."

         (m) "Option  Agreement" means the agreement  evidencing the grant of an
         Option as described in Subsection 6.2.
(n)  "Option  Price"  means the price at which  Stock may be  purchased
         pursuant to an Option.

         (o) "Optionee"  means a person to whom an Option has been granted under
         the Plan.

         (p) "Participant"  means an Eligible Employee who has been granted and,
         at the time of reference, holds an Option or share of Restricted Stock.

         (q) "Period of  Restriction"  means the period  during  which shares of
         Restricted  Stock are subject to restrictions  pursuant to Section 9 of
         the Plan.

         (r)  "Restricted  Stock"  means Stock  granted to an Eligible  Employee
         pursuant to Section 9 of the Plan.

         (s)  "Retirement"  means the termination of employment with the Company
         or any  Subsidiary  by  reason of the  attainment  of the age which the
         Company,  by policy or otherwise,  has  established as the age at which
         salaried  employees  may  or  shall  be  required  to  terminate  their
         employment and receive retirement benefits.

         (t)  "Stock"  means the Class A New Common  Stock of the  Company,  par
         value $0.01 per share.

         (u) "Stock  Appreciation Right" means the right to receive the increase
         in the value of Stock subject to an Option in lieu of  purchasing  such
         Stock.

         (v) "Subsidiary" means any present or future subsidiary of the Company,
         as defined in Section 424(f) of the Code.

         2.2. Number.  Except  when  otherwise  indicated by  the  context,  the
singular shall include the plural, and the plural shall include the singular.

SECTION 3. ELIGIBILITY AND PARTICIPATION

         3.1.  Eligibility  and  Participation.  Eligible  Employees in the Plan
shall be  selected by the  Committee  from among  those  officers  and other key
employees  of the  Company  and its  Subsidiaries  who,  in the  opinion  of the
Committee, are in a position to contribute materially to the Company's continued
growth and development and to its long-term financial success.

SECTION 4. STOCK SUBJECT TO PLAN

         4.1.  Number.  The total number of shares of Stock  subject to issuance
under the Plan may not exceed 100,000  subject to adjustment  upon occurrence of
any of the events  indicated in Subsection  4.5. The maximum number of shares of
Stock with respect to which Options or Stock Appreciation  Rights may be granted
to any Eligible  Employee during the term of the Plan cannot exceed 10,000.  The
shares to be  delivered  under  the Plan may  consist,  in whole or in part,  of
authorized  but  unissued  Stock or treasury  Stock,  not reserved for any other
purpose.

         4.2. Unused Stock; Unexercised Rights. In the event any shares of Stock
are  subject  to an  Option,  which for any  reason,  expires  or is  terminated
unexercised  as to such shares,  or any shares of Stock  subject to a Restricted
Stock  grant made  under the Plan are  reacquired  by the  Company  pursuant  to
Section 9 of the Plan,  such shares  again shall become  available  for issuance
under the Plan.
4.3.   Exercise  of  Stock   Appreciation   Right.   Whenever  a  Stock
Appreciation  Right,  other than a Stock Appreciation Right described in Section
8.1(a)(ii),  is exercised  and payment of the amount  determined  in  Subsection
8.l(b) is made in cash,  the  shares of Stock  allocable  to the  portion of the
Option  surrendered  may again be the  subject of Options  or  Restricted  Stock
hereunder.  Whenever a Stock  Appreciation Right is exercised and payment of the
amount  determined in Subsection  8.1(b) is made in shares of Stock or any Stock
Appreciation  Right described in Section  8.1(a)(ii) is exercised,  no shares of
Stock with respect to which the Stock  Appreciation Right is exercised may again
be the subject of Options or Restricted Stock hereunder.

         4.4.  Restricted  Stock.  Whenever  any  shares of Stock  granted to an
Eligible  Employee are forfeited  pursuant to Section 9 herein,  such shares may
again be the subject of Options or Restricted Stock  hereunder,  but only if the
Participant  had not been paid any  dividend  or received  any other  benefit of
ownership of such forfeited shares.

         4.5. Adjustment in Capitalization.

         (a) In the event of a Change in  Capitalization,  the  Committee  shall
         conclusively determine the appropriate adjustments,  if any, to the (i)
         maximum  number and class of shares of Stock or other  securities  with
         respect to which Options or  Restricted  Stock may be granted under the
         Plan; (ii) the number and class of shares of Stock or other  securities
         which are subject to  outstanding  Options or Restricted  Stock granted
         under the Plan, and the purchase  price  therefor,  if applicable;  and
         (iii) the maximum  number of shares of Stock or other  securities  with
         respect to which Options or Stock Appreciation Rights may be granted to
         any Eligible Employee during the term of the Plan.

         (b) Any such  adjustment  in the  shares  of Stock or other  securities
         subject  to  outstanding   incentive   stock  options   (including  any
         adjustments in the purchase  price) shall be made in such manner as not
         to  constitute a  modification  as defined by Section  424(h)(3) of the
         Code and only to the extent otherwise permitted by Sections 422 and 424
         of the Code.

         (c)  If,  by  reason  of a  Change  in  Capitalization,  a  grantee  of
         Restricted Stock shall be entitled to, or an Optionee shall be entitled
         to exercise an Option with  respect to, new,  additional  or  different
         shares of stock or securities,  such new additional or different shares
         shall thereupon be subject to all of the conditions,  restrictions  and
         performance  criteria which were applicable to the Restricted  Stock or
         shares of Stock  subject to the  Option,  as the case may be,  prior to
         such Change in Capitalization.

SECTION 5. DURATION OF PLAN

         5.1. Duration of Plan. The Plan shall remain in effect,  subject to the
Board's right to earlier  terminate the Plan pursuant to Subsection 12.3 hereof,
until all Stock subject to it shall have been purchased or acquired  pursuant to
the provisions hereof.  Notwithstanding  the foregoing,  no Option or Restricted
Stock may be  granted  under the Plan on or after the tenth  anniversary  of the
Consummation Date.
SECTION 6. OPTION GRANTS FOR ELIGIBLE EMPLOYEES

         6.1. Grant of Employee Options. Subject to the provisions of Sections 4
and 5,  Employee  Options may be granted to Eligible  Employees  at any time and
from time to time as shall be determined by the Committee.  The Committee  shall
have complete  discretion  consistent  with the terms of the Plan in determining
whether to grant  Employee  Options  and the  number of Options  granted to each
Eligible Employee. The Committee also shall determine whether an Employee Option
is to be an incentive stock option within the meaning of Section 422 of the Code
or a nonstatutory  stock option.  Nothing in this Section 6 of the Plan shall be
deemed to  prevent  the grant of  nonstatutory  stock  options  in excess of the
maximum established by Section 422 of the Code.

         6.2.  Option  Agreement.  Each Employee Option shall be evidenced by an
Option  Agreement  that shall  specify  the type of Option  granted,  the Option
Price,  the  duration of the Option,  the number of shares of Stock to which the
Option pertains and such other provisions as the Committee shall determine.

         6.3.  Option Price.  The Option Price for each Employee Option shall be
determined by, or in the manner specified by, the Committee;  provided, however,
that no Employee  Option  shall have an Option  Price that is less than the Fair
Market Value of the Stock on the date the Option is granted (110% of Fair Market
Value in the case of an incentive stock option granted to any person who, within
the  meaning of Section  422 of the Code,  owns stock  possessing  more than ten
(10%) percent of the total combined  voting power of all classes of stock of the
Company or any Subsidiary (a "Ten Percent Stockholder")).

         6.4. Duration of Employee Options. Each Employee Option shall expire at
such time as the Committee shall determine at the time it is granted;  provided,
however,  that no  Employee  Option  shall be  exercisable  later than the tenth
anniversary date of its grant (the fifth anniversary in the case of an incentive
stock option granted to a Ten Percent Stockholder).

         6.5.  Exercise of Employee Options;  Vesting.  Employee Options granted
under the Plan shall be exercisable at such times and be subject to such vesting
schedules,  restrictions  and conditions as the Committee shall in each instance
approve,  which  need  not be the  same for all  Eligible  Employees;  provided,
however,  that in no event shall a Participant's rights to exercise such Options
vest more rapidly than 33 1/3% annually, beginning on the first anniversary date
following the granting of such Option.

SECTION 7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS

         7.1. Payment.  The Option Price shall be payable to the Company in full
upon exercise of an Option either (i) in cash or its equivalent,  or (ii) at the
discretion of the Committee,  by tendering  shares of Stock held by the Optionee
for more than six (6) months  having a Fair Market Value at the time of exercise
equal  to the  Option  Price  or (iii) by a  combination  of (i) and  (ii).  The
proceeds  from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.

         7.2.  Restrictions on Stock  Transferability.  The Committee may impose
such restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable,  including,  without limitation,
restrictions  under applicable Federal securities law, under requirements of any
stock  exchange  upon which such  shares of Stock are then  listed and under any
blue sky or state securities laws applicable to such shares.

         7.3.  Termination  of  Employment  Due to  Retirement  or  Voluntary or
Involuntary  Separation.  The Committee may provide in the Option Agreement that
(i) in the event the  employment  of the  Optionee  is  terminated  by reason of
Retirement,  any  outstanding  Options  granted to the  Optionee  which are then
exercisable shall continue to be exercisable at any time prior to the earlier of
the expiration  date of the Options and one year after the date of  termination,
or (ii) in the event that the  employment of the Optionee is terminated  for any
reason other than Retirement,  death, Disability or Cause (as defined in Section
7.5), any outstanding options granted to the Optionee which are then exercisable
may continue to be exercisable  until the earlier of the expiration date of such
Options  and  three  months  after  the date of  termination.  Any  Options  not
exercisable  upon  Retirement  or  other  termination  except  due to  death  or
Disability shall terminate immediately.

         7.4.  Termination  of  Employment  Due  to  Death  or  Disability.  The
Committee may provide in the Option  Agreement  that in the event the employment
of the Optionee is terminated by reason of death or Disability, the rights under
any then outstanding  Option granted to the Optionee  pursuant to the Plan shall
become fully  exercisable until the earlier of the expiration date of the Option
and one (1) year after the date of such termination,  subject to such exceptions
(which shall be set forth in the Option  Agreement) as the Committee may, in its
sole discretion, approve.

         7.5. Termination of Employment for Cause.  Notwithstanding  anything to
the contrary herein, if the employment of the Optionee shall terminate for Cause
(as defined herein), any then outstanding Option granted pursuant to the Plan to
the Optionee shall terminate immediately;  provided, however, that the Committee
may  waive,  in whole or in part,  the  automatic  forfeiture  of such  Employee
Options and may set forth such waiver or condition in the Option Agreement or at
any other time, including following the termination of employment.  For purposes
of this Plan,  "Cause"  means the  Optionee's  knowingly or  recklessly  causing
material  injury  to the  Company,  the  Optionee's  willful  misconduct  in the
performance of (or failure to perform) his duties  hereunder,  or the Optionee's
dishonest,  fraudulent or unlawful behavior involving moral turpitude whether or
not in connection with his employment.

         7.6.  Non-transferability  and  Exercisability  of  Options.  No Option
granted under the Plan may be sold, transferred,  pledged, assigned or otherwise
alienated or hypothecated,  otherwise than by will or by the laws of descent and
distribution.  Further,  all Options granted to an Optionee under the Plan shall
be exercisable  during his lifetime only by such Optionee.  Notwithstanding  any
provision of the Plan to the contrary,  no Option shall be exercisable  prior to
the time a registration  statement under the Securities Act of 1933 is effective
with respect to the shares of Stock issuable upon the exercise of such Option.

SECTION 8. STOCK APPRECIATION RIGHTS

         8.1. Stock  Appreciation  Rights. The Committee may, in its discretion,
in connection with the grant of an Employee Option,  grant to the Optionee Stock
Appreciation  Rights, the terms and conditions of which shall be set forth in an
agreement as determined by the Committee. A Stock Appreciation Right shall cover
the same shares of Stock  covered by the Option (or such lesser number of shares
of Stock as the Committee may determine)  and shall,  except as provided in this
Section 8, be subject to the same terms and  conditions  as the related  Option.
Stock  Appreciation   Rights  shall  be  subject  to  the  following  terms  and
provisions:

         (a) A Stock Appreciation Right may be granted:

         (i) either at the time of grant, or at any time  thereafter  during the
         term of the Option if related to a nonstatutory stock option; or

         (ii) only at the time of grant if related to an incentive stock option.

         (b) A Stock  Appreciation  Right will entitle the holder of the related
         Option,  upon exercise of the Stock  Appreciation  Right,  to surrender
         such Option, or any portion thereof to the extent  unexercised,  and to
         receive  payment of an amount  determined by multiplying (i) the excess
         of the Fair Market Value of a share of Stock on the date of exercise of
         such Stock  Appreciation  Right over the  purchase  price of a share of
         Stock  under the  related  Option,  by (ii) the  number of shares as to
         which such Stock Appreciation Right has been exercised. Notwithstanding
         the foregoing, the Committee may limit in any manner the amount payable
         with respect to any Stock  Appreciation Right by including such a limit
         in the agreement evidencing the Stock Appreciation Right at the time it
         is granted.

         (c) A Stock  Appreciation  Right  will be  exercisable  at such time or
         times and only to the extent that a related Option is exercisable,  and
         will not be transferable  except to the extent that such related Option
         may be transferable.  A Stock  Appreciation Right granted in connection
         with an incentive  stock option shall be  exercisable  only if the Fair
         Market  Value of a share of Stock on the date of  exercise  exceeds the
         purchase price of a share of Stock specified in the related Option.

         (d) Upon the exercise of a Stock Appreciation Right, the related Option
         shall be  canceled to the extent of the number of shares of Stock as to
         which the Stock Appreciation Right is exercised,  and upon the exercise
         of an Option granted in connection with a Stock Appreciation Right, the
         Stock  Appreciation Right shall be canceled to the extent of the number
         of shares of Stock as to which the Option is exercised or surrendered.

         (e) Stock Appreciation Rights shall be exercised by an Optionee only by
         a written notice delivered in person or by mail to the Secretary of the
         Company at the Company's  principal  executive  office,  specifying the
         number of shares of Stock with respect to which the Stock  Appreciation
         Right is being exercised.  If requested by the Committee,  the Optionee
         shall deliver the agreement  evidencing  the Stock  Appreciation  Right
         being exercised and the agreement  evidencing any related Option to the
         Secretary of the Company who shall  endorse  thereon a notation of such
         exercise and return such agreement to the Optionee.

         (f) Payment of the amount  determined  under Section 8.1(b) may be made
         by the  Company in the  discretion  of the  Committee,  solely in whole
         shares of Stock in a number  determined  at their Fair Market  Value on
         the date  preceding  the date of  exercise  of the  Stock  Appreciation
Right, or solely in cash, or in a combination of cash and Stock. If the
         Committee  decides to make full payment in Stock and the amount payable
         results in a fractional share, payment for the fractional share will be
         made in cash.  Notwithstanding the foregoing, no payment in the form of
         cash may be made upon the exercise of a Stock  Appreciation Right to an
         officer of the Company or a Subsidiary  who is subject to Section 16 of
         the Exchange Act, unless the exercise of such Stock  Appreciation Right
         is made either (i) during the period  beginning  on the third  business
         day and  ending  on the  twelfth  business  day  following  the date of
         release for publication of the Company's quarterly or annual statements
         of sales and earnings or (ii)  pursuant to an  irrevocable  election to
         receive cash made at least six (6) months prior to the exercise of such
         Stock Appreciation Right.

         (g) No Stock  Appreciation  Right may be exercised  before the date six
         (6) months after the date it is granted.

         (h)  Subject  to the  terms  of the  Plan,  the  Committee  may  modify
         outstanding awards of Stock Appreciation Rights or accept the surrender
         of outstanding awards of Stock  Appreciation  Rights (to the extent not
         exercised)   and  grant   new   awards   in   substitution   for  them.
         Notwithstanding  the foregoing,  no  modification  of an award of Stock
         Appreciation  Rights  shall  adversely  alter or impair  any  rights or
         obligations under the agreement granting such Stock Appreciation Rights
         without the Optionee's consent.

SECTION 9. RESTRICTED STOCK

         9.1. Grant of Restricted Stock;  Vesting.  Subject to the provisions of
Sections 4 and 5, the  Committee,  at any time and from time to time,  may grant
shares of Restricted Stock under the Plan to such Eligible Employees and in such
amounts as it shall determine in its sole  discretion.  Each grant of Restricted
Stock shall be made  pursuant to a written  agreement  which shall  contain such
restrictions,  terms  and  conditions  as the  Committee  may  determine  in its
discretion.  Restrictions  upon shares of  Restricted  Stock shall lapse at such
time or times and on such terms and  conditions as the Committee may  determine;
provided,  however, that in no event shall such restrictions on vesting lapse at
rate more rapidly, on an annual basis, than 33 1/3% of the number of shares such
Restricted  Stock subject to such grant beginning on the first  anniversary date
following the grant of such Restricted Stock.

         9.2. Transferability.  Except as provided in this Section 9, the shares
of Restricted  Stock granted  hereunder may not be sold,  transferred,  pledged,
assigned or otherwise alienated or hypothecated for such period of time as shall
be determined by the  Committee and shall be specified in the  Restricted  Stock
grant,  or upon earlier  satisfaction  of other  conditions  as specified by the
Committee in its sole  discretion and set forth in the  Restricted  Stock grant;
provided,  however, that Restricted Stock granted to officers,  directors or any
person who owns,  directly  or  indirectly,  more than ten (10%)  percent of any
class of equity security of the Company which is registered  pursuant to Section
13 of the Act may not be sold  for at least  six (6)  months  after  the date of
grant.

         9.3.   Other   Restrictions.   The  Committee  may  impose  such  other
restrictions on any shares of Restricted Stock granted to any Eligible  Employee
pursuant to the Plan as it may deem  advisable  including,  without  limitation,
restrictions  under applicable  federal or state securities laws, and may legend
the certificates  representing  Restricted  Stock to give appropriate  notice of
such restrictions.
9.4.   Certificate  Legend.  In  addition  to  any  legends  placed  on
certificates  pursuant to Subsection 9.3 hereof,  each certificate  representing
shares of Restricted Stock granted pursuant to the Plan shall bear the following
legend:

         "The sale or other transfer of the shares of stock  represented by this
         certificate,  whether voluntary, involuntary or by operation of law, is
         subject to certain  restrictions  on transfer set forth in the Reinhold
         Industries,  Inc. Stock Incentive Plan, rules of administration adopted
         pursuant to such Plan and a Restricted Stock grant dated. A copy of the
         Plan, such rules and such  Restricted  Stock grant may be obtained from
         the Secretary of Reinhold Industries, Inc."

         9.5.  Removal of  Restrictions.  Except as  otherwise  provided in this
Section 9, shares of  Restricted  Stock covered by each  Restricted  Stock grant
made under the Plan shall become freely  transferable  by the Eligible  Employee
after the last day of the Period of  Restriction.  Once the shares are  released
from the  restrictions,  the  Eligible  Employee  shall be  entitled to have the
legend required by Subsection 9.4 removed from his or her Stock certificate.

         9.6.  Voting  Rights.  During  the  Period  of  Restriction,   Eligible
Employees holding shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those shares.

         9.7.   Dividends  and  Other   Distributions.   During  the  Period  of
Restriction,  Eligible  Employees  holding  shares of  Restricted  Stock granted
hereunder  shall be entitled to receive all  dividends  and other  distributions
paid with respect to those shares while they are so held. If any such  dividends
or distributions are paid in shares of Stock, the shares shall be subject to the
same  restrictions  on  transferability  as the shares of Restricted  Stock with
respect to which they were paid.

SECTION 10. BENEFICIARY DESIGNATION

         10.1. Beneficiary Designation. Subject to Subsections 7.6 and 9.2, each
Participant  under the Plan  may,  from time to time,  name any  beneficiary  or
beneficiaries  (who  may be  named  contingently  or  successively)  to whom any
benefit under the Plan is to be paid in case of the  Participant's  death before
he or she receives any or all of such benefit.  Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee and will be effective  only when filed by the  Participant  in writing
with the Committee during the lifetime of the Participant. In the absence of any
such designation,  benefits remaining unpaid at the Participant's death shall be
paid to the estate of the Participant.

SECTION 11. RIGHTS OF EMPLOYEES

         11.1.  Employment.  The  selection  of any person to receive an Option,
Stock  Appreciation Right or Restricted Stock hereunder shall not interfere with
or limit in any way the right of the Company or any Subsidiary to terminate such
Participant's  employment  at any time and shall not give such  Participant  any
right to continue as an employee of the Company or any Subsidiary.
11.2.  Participation.  No employee shall have a right to be selected as
an Eligible  Employee or,  having been so selected,  to be selected  again as an
Optionee or recipient of Restricted  Stock.  Each grant of Options or Restricted
Stock  hereunder shall be separate and distinct from every other grant and shall
not be  construed  either to give or deny the  grantee  the right to be  granted
additional benefits under the Plan.

         11.3.  Plan Not Exclusive.  The Plan is not exclusive.  The Company may
have other  plans,  programs  and  arrangements  for the grant of  options,  the
issuance of shares or other  compensation.  The Plan does not  require  that any
Optionee  or  holder of  Restricted  Stock  participate,  or be  precluded  from
participation, in such other plans, programs and arrangements.

SECTION 12. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE

         12.1.  Administration.  The  Committee  shall  be  responsible  for the
administration  of the Plan.  The  Committee,  by majority  action  thereof,  is
authorized to interpret the Plan,  to  prescribe,  amend,  and rescind rules and
regulations  relating to the Plan,  to provide  for  conditions  and  assurances
deemed  necessary or advisable to protect the  interests of the Company,  and to
make all other  determinations  necessary or advisable for the administration of
the Plan,  but only to the extent not contrary to the express  provisions of the
Plan.  Determinations,  interpretations,  or other  actions made or taken by the
Committee  pursuant to the provisions of the Plan shall be final and binding and
conclusive  for all purposes and upon all persons  whomsoever.  No member of the
Committee  shall  be  personally   liable  for  any  action,   determination  or
interpretation  made or taken with  respect  to the Plan and all  members of the
Committee  shall be fully  indemnified  by the Company  with respect to any such
action, determination or interpretation.

         12.2.  Change  in  Control.  Without  limiting  the  authority  of  the
Committee as provided herein, the Committee, either at the time Employee Options
or shares of Restricted Stock are granted,  or, if so provided in the applicable
Option Agreement or Restricted Stock grant, at any time thereafter,  shall [have
the authority to accelerate in whole or in part the  exercisability  of Employee
Options  and/or  the last day of the  Period  of  Restriction  upon a Change  in
Control.  The Option  Agreements  and  Restricted  Stock grants  approved by the
Committee may contain provisions  whereby,  in the event of a Change in Control,
the acceleration of the  exercisability  of Employee Options and/or the last day
of the  Period  of  Restriction  may be  automatic  or  may  be  subject  to the
discretion  of the  Committee  or may depend upon  whether the Change in Control
shall be  approved  by a  majority  of the  members  of the Board or such  other
criteria as the  Committee  may  specify.  Nothing  herein  shall  obligate  the
Committee to take any action upon a Change in Control.

         12.3. Amendment, Modification and Termination of Plan. The Board may at
any  time  terminate,  and from  time to time may  amend  or  modify  the  Plan;
provided,  however,  that no such action of the Board,  without  approval of the
stockholders, may:

         (a)  Increase  the total  amount of Stock which may be issued under the
         Plan, except as provided in Subsection 4.5 of the Plan.

         (b) Materially increase the cost of the Plan or materially increase the
         benefits to Participants.
(c) Extend the period during which  Options or Restricted  Stock may be
         granted.

         (d) Extend the  maximum  period  after the date of grant  during  which
         Options may be exercised.

         (e)  Change the class of  individuals  eligible  to receive  Options or
         Restricted Stock.

          Any amendment  which  requires  stockholder  approval in order for the
Plan to  continue  to  comply  with  Rule  16b-3  of the Act or any  other  law,
regulation or stock exchange  requirement shall not be effective unless approved
by the requisite vote of stockholders. No amendment, modification or termination
of the Plan shall in any manner adversely affect any Options or Restricted Stock
theretofore  granted to any Participant  under the Plan,  without the consent of
that Participant.

         12.4.   Interpretation.   Unless  otherwise  expressly  stated  in  the
agreement  governing,  any  grant of  Options,  Stock  Appreciation  Rights  and
Restricted Stock, such grant, as the case may be, is intended to be compensation
within the meaning of Section  162(m)(4)(C) of the Code. The Committee shall not
be entitled to exercise  any  discretion  otherwise  authorized  hereunder  with
respect  to such  Options if the  ability to  exercise  such  discretion  or the
exercise of such discretion itself would cause the compensation  attributable to
such Options to fail to qualify as such compensation.

SECTION 13. TAX WITHHOLDING

         13.1.  Tax  Withholding.  (a) At such  times  as an  Eligible  Employee
recognizes  taxable  income in  connection  with the  receipt  of shares or cash
hereunder (a "Taxable Event"), the Eligible Employee shall pay to the Company an
amount equal to the federal,  state and local income taxes and other  amounts as
may be required by law to be  withheld  by the  Company in  connection  with the
Taxable Event (the "Withholding  Taxes") prior to the issuance,  or release from
escrow,  of such shares or the payment of such cash.  The Company shall have the
right to deduct from any payment of cash to an Eligible Employee an amount equal
to the  Withholding  Taxes in  satisfaction of the obligation to pay Withholding
Taxes.  In  satisfaction  of his  obligation  to pay  Withholding  Taxes  to the
Company, the Eligible Employee may make a written election (the "Tax Election"),
which may be accepted or rejected in the  discretion of the  Committee,  to have
withheld  a  portion  of the  shares of Stock  then  issuable  to him  having an
aggregate  Fair Market Value,  on the date  preceding the date of such issuance,
equal to the Withholding Taxes, provided that in respect of an Eligible Employee
who may be subject to liability  under Section 16(b) of the Exchange Act either:
(i) the Tax  Election  is made at least six (6) months  prior to the date of the
Taxable  Event and the Tax Election is  irrevocable  with respect to all Taxable
Events of a similar nature  occurring  prior to the expiration of six (6) months
following a revocation of the Tax Election;  or (ii) in the case of the exercise
of an Option (A) the  Optionee  makes the Tax  Election  at least six (6) months
after the date the Option was granted,  (B) the Option is  exercised  during the
ten (10) day  period  beginning  on the  third  business  day and  ending on the
twelfth  business day  following  the release for  publication  of the Company's
quarterly or annual  statement of sales and earnings (a "Window Period") and (C)
the Tax Election is made during the Window Period in which the related Option is
exercised  or prior to such  Window  Period and  subsequent  to the  immediately
preceding Window Period; or (iii) in the case of a Taxable Event relating to the
grant of shares of  Restricted  Stock (A) the  Eligible  Employee  makes the Tax
Election  at least six (6) months  after the date such stock was granted and (B)
the Tax Election is made (x) in the case of a Taxable Event  occurring  within a
Window  Period,  during the Window Period in which the Taxable Event occurs,  or
(y) in the case of a Taxable Event not occurring within a Window Period,  during
the Window  Period  immediately  preceding  the Taxable  Event  relating to such
Restricted  Stock.  Notwithstanding  the  foregoing,  the Committee  may, by the
adoption of rules or otherwise,  (i) modify the  provisions of this Section 13.1
or impose such other  restrictions  or  limitations  on Tax  Elections as may be
necessary to ensure that the Tax  Elections  will be exempt  transactions  under
Section  16(b) of the Exchange  Act, and (ii) permit Tax Elections to be made at
such  other  times  and  subject  to  such  other  conditions  as the  Committee
determines will constitute exempt transactions under Section 16(b) of the Act.

SECTION 14. REQUIREMENTS OF LAW

         14.1. Requirements of Law. The granting of Options or Restricted Stock,
and the  issuance  of shares of Stock upon the  exercise  of an Option  shall be
subject to all applicable laws, rules and regulations,  and to such approvals by
any governmental agencies or national securities exchanges as may be required.

         14.2. Governing Law. The Plan, and all agreements  hereunder,  shall be
construed in  accordance  with and governed by the laws of the State of New York
without  giving effect to the choice of law  principles  thereof,  except to the
extent that such law is preempted by federal law.
EXHIBIT 5.1

                                 Law Offices of
                                PETILLON & HANSEN
                   A Partnership of Professional Corporations
                              1260 Union Bank Tower
                            21515 Hawthorne Boulevard
                           Torrance, California 90503
                           Telephone (310) 543 - 0500
                           Facsimile (310) 543 - 0550

                                November 10, 1997

Reinhold Industries, Inc.
12827 E. Imperial Highway
Santa Fe Springs, CA 90670-4713

RE:      Registration Statement on Form S-8
         Stock Incentive Plan

Ladies and Gentlemen:

We have examined the Registration  Statement on Form S-8 to be filed by Reinhold
Industries, Inc., a Delaware corporation (the "Company") with the Securities and
Exchange  Commission  in  connection  with the  registration  by the  Company of
100,000 shares (the  "Shares") of its Class A New Common Stock,  $.01 par value,
reserved for issuance under the Company's Stock Incentive Plan (the "Plan").  We
advise you that, in our opinion,  upon completion of the actions contemplated by
us as your  counsel  to be taken  by you  prior to the  issuance  of the  Shares
pursuant to the Registration  Statement and the Plan, and upon completion of the
actions to permit such  transactions  to be carried out in  accordance  with the
securities laws of the various states where required, the Shares will be validly
issued, fully paid and nonassessable shares of Common Stock.

We  hereby  consent  to  the  filing  of  this  opinion  as an  exhibit  to  the
Registration Statement.

Very truly yours,

/S/  Petillon & Hansen
PETILLON & HANSEN
EXHIBIT 23.2

                       Consent of Independent Accountants

The Board of Directors
Reinhold Industries, Inc.:

We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statement  on Form S-8 of Reinhold  Industries,  Inc.  for the  registration  of
100,000  shares of its common stock of our report dated January 17, 1997, on our
audits of the financial statements of Reinhold  Industries,  Inc. as of December
31, 1996 and for the year ended  December 31,  1995,  the period from January 1,
1996 through July 31, 1996 (the  Predecessor  Company),  and for the period from
August 1, 1996 through December 31, 1996 (the Reorganized Company),  included in
Reinhold  Industries,  Inc.'s 1996 Annual  Report on Form 10-KSB  filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1934.

                                                    

Los Angeles, California
November 10, 1997
                                           
                                               /S/ KPMG Peat Marwick LLP