As filed with the Securities and Exchange Commission on June 21,
1995

Registration No. 33-_________
                                                      

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

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

Delaware
(State or other jurisdiction
of incorporation or organization)  
                                                                
                           75-1277589
                                                                
           (I.R.S. Employer Identification Number)

6300 S. Syracuse Way, Suite 300
Englewood, Colorado  80111
(Address of Principal Executive Offices)(Zip Code)

KATY INDUSTRIES, INC. LONG-TERM INCENTIVE PLAN
(Full title of the plan)

John R. Prann, Jr.
President and Chief Executive Officer
6300 S. Syracuse Way, Suite 300
Englewood, Colorado  80111
Telephone:  (303) 290-9300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:

Bruce L. Rogers, Esq.
Hogan & Hartson L.L.P.
One Tabor Center
1200 Seventeenth Street, Suite 1500
Denver, Colorado  80202

Calculation of Registration Fee
Title of securities to be registered  - Common Stock, par value
$1.00 per share
Amount to be registered - 500,000
Proposed maximum price per share (1) - $8.25
Proposed maximum aggregate offering price (1) - $4,125,000
Amount of registration fee (2) - $1,422.41

(1)  Calculated pursuant to Rule 457(h), based on an assumed
price of $8.25 per share, which represents the average of the high
and low  
prices of such securities reported in the consolidated reporting
system on June 15, 1995.
(2)  Registration fee is calculated on the basis of 1/29 of 1%
of the proposed maximum aggregate offering price of $4,125,000.
PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS


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


PART II

INFORMATION REQUIREMENT IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Certain Documents by Reference.

          The following documents filed with the Securities and
Exchange Commission are incorporated herein by reference:

               (a)  The Annual Report on Form 10-K of Katy
Industries, Inc. (the "Registrant") for the year ended
December 31, 1994, filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act").

               (b)  All other reports filed pursuant to
Section 13(a) or 15(d) of the Exchange Act, since the end of the
fiscal year covered by the Registrant document referred to in (a)
above.

          All reports and other documents subsequently filed by
the Registrant 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 then offered hereby
have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of the 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 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 deemed to be incorporated by reference herein modifies or
supersedes 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.

          Section 102(b)(7) of the General Corporation Law of
the State of Delaware permits a Delaware corporation to limit the
personal liability of its directors in accordance with the
provisions set forth therein.  The Amended and Restated
Certificate of Incorporation of the Registrant provides that the
personal liability of its directors shall be limited to the
fullest extent permitted by applicable law.

          Section 145 of the General Corporation Law of the
State of Delaware contains provisions permitting Delaware
corporations to indemnify directors, officers, employees or agents
against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person was or is
a director, officer, employee or agent of the corporation provided
that (i) such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the corporation's
best interest and (ii) in the case of a criminal proceeding such
person had no reasonable cause to believe his or her conduct was
unlawful.  In the case of actions or suits by or in the right of
the corporation, no indemnification shall be made in a case in
which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall have determined upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses.  Indemnification as described above
shall only be granted in a specific case upon a determination that
indemnification is proper in the circumstances because the
indemnified person has met the applicable standard of conduct. 
Such determination shall be made (a) by a majority of a quorum of
directors who were not parties to such proceeding, (b) if such
quorum cannot be obtained or if a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion or (c) by the stockholders of the corporation.  The
Amended and Restated Certificate of Incorporation and the By-Laws
of the Registrant provide for indemnification of its directors and
officers to the fullest extent permitted by applicable law.

Item 7.  Exemption from Registration Claimed.

          Not applicable.

Item 8.  Exhibits.

          Reference is made to the Exhibit Index that
immediately precedes the exhibits filed with this Registration
Statement.

Item 9.  Undertakings.

          (a)  The undersigned Registrant hereby undertakes:

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

                    (i)  To include any prospectus required
by section 10(a)(3) of 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 set forth 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 the undertakings set forth in
paragraphs (i) and (ii) above do not apply if the Registration
Statement is on Form 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 Registrant pursuant
to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in this 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 registration by means of
a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.

          (b)  The undersigned Registrant hereby further
undertakes that, for the purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange
Act (and, where applicable, each filing of any employee benefit
plan's annual report pursuant 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.

          (c)  Insofar as the indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore, unenforceable. 
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the 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, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on the 21st
day of June, 1995.

                              KATY INDUSTRIES, INC.
                              
                              
                              By:  /s/ John R. Prann, Jr.
                                   John R. Prann, Jr.,
                                   President, Chief
                                   Executive Officer and
                                   Chief Operating          Officer


          KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints John R.
Prann, Jr. and Paul Kurowski, and each of them, his true and
lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform
each and every act and thing requisite or necessary to be done
in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

          Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement on Form S-8 has been
signed by the following persons in the capacities and as of the
date indicated.<PAGE>
Signature
Title
Date

/s/ Philip E. Johnson
Philip E. Johnson
    Chairman of the Board
    June 21, 1995
/s/ John R. Prann, Jr.
John R. Prann, Jr.
    President, Chief Executive Officer and Director
June 21, 1995
/s/ Paul Kurowski
Paul Kurowski
    Chief Financial Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer)  June 21, 1995
/s/ Lutz Raettig
Lutz Raettig
    Director   June 21, 1995
/s/ Jacob Saliba
Jacob Saliba
    Director   June 21, 1995
/s/ Charles W. Sahlman
Charles W. Sahlman
    Director   June 21, 1995
/s/ Wallace E. Carroll, Jr.
Wallace E. Carroll, Jr.
    Director   June 21, 1995
/s/ Arthur R. Miller
Arthur R. Miller
    Director   June 21, 1995
/s/ William F. Andrews
William F. Andrews
    Director   June 21, 1995
/s/ Glenn W. Turcotte
Glenn W. Turcotte
    Director   June 21, 1995
/s/ William H. Murphy
William H. Murphy
    Director   June 21, 1995
/s/ Daniel B. Carroll
Daniel B. Carroll       Director   June 21, 1995<PAGE>
INDEX TO EXHIBITS

Exhibit
Number    
                Description                                     
                Sequentially
                                                                
                                              Numbered Page
4.1 Katy Industries, Inc. Long-Term Incentive Plan    
5.1 Opinion of Hogan & Hartson L.L.P.  
23.1     Consent of Deloitte & Touche LLP   
23.2     Consent of Hogan & Hartson L.L.P. - included in Exhibit
5.1 
25.1     Powers of Attorney - included in Part II of Registration
Statement     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     EXHIBIT 4.1
     Katy Industries, Inc.
     Long-Term Incentive Plan
     THIS DOCUMENT CONSTITUTES PART OF THE PROSPECTUS COVERING
     SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES
     ACT OF 1993.
          <PAGE>
Contents  
                                                        Page

Article 1. Establishment, Objectives, and Duration      1
Article 2.  Definitions                                 1
Article 3.  Administration                              5
Article 4.  Shares Subject to the Plan and 
            Maximum Awards                              6
Article 5.  Eligibility and Participation               7
Article 6.  Stock Options                               8
Article 7.  Stock Appreciation Rights                  10
Article 8.  Restricted Stock                           11
Article 9.  Performance Units and Performance 
            Shares                                     13
Article 10.  Other Incentive Awards                    14
Article 11.  Performance Measures                      15
Article 12.  Beneficiary Designation                   16
Article 13.  Deferrals                                 16
Article 14.  Rights of Employees                       16
Article 15.  Change in Control                         17
Article 16.  Amendment, Modification, and 
             Termination                               18
Article 17.  Withholding                               18
Article 18.  Financial Assistance                      19
Article 19.  Indemnification                           19
Article 20.  Successors                                19
Article 21.  Legal Construction                        19












Katy Industries, Inc.
     Long-Term Incentive Plan
     Article 1.     Establishment, Objectives, and Duration
          1.1  Establishment of the Plan.  Katy Industries,
     Inc., a Delaware corporation (hereinafter referred to as the
     "Company"), hereby establishes an incentive compensation plan
     to be known as the "Katy Industries, Inc. Long-Term Incentive
     Plan" (hereinafter referred to as the "Plan"), as set forth in
     this document.  The Plan permits the grant of Nonqualified
     Stock Options, Incentive Stock Options, Stock Appreciation
     Rights, Restricted Stock, Performance Shares and Performance
     Units, and Other Incentive Awards.
          Subject to approval by the Company's stockholders,
     the Plan shall become effective as of January 1, 1995 (the
     "Effective Date") and shall remain in effect as provided in
     Section 1.3 hereof.
          1.2  Objectives of the Plan.  The objectives of
     the Plan are to optimize the profitability and growth of the
     Company through incentives which are consistent with the
     Company's goals and which link the personal interests of
     Participants to those of the Company's stockholders; to
     provide Participants with an incentive for excellence in
     individual performance; and to promote teamwork among
     Participants.
          The Plan is further intended to provide
     flexibility to the Company in its ability to motivate,
     attract, and retain the services of Participants who make
     significant contributions to the Company's success and to
     allow Participants to share in the success of the Company.
          1.3  Duration of the Plan.  The Plan shall
     commence on the Effective Date, as described in Section 1.1
     hereof, and shall remain in effect, subject to the right of
     the Board of Directors to amend or terminate the Plan at any
     time pursuant to Article 16 hereof, until all Shares subject
     to it shall have been purchased or acquired according to the
     Plan's provisions.  However, in no event may an Award be
     granted under the Plan on or after December 31, 2004.
     Article 2.  Definitions
          Whenever used in the Plan, the following terms
     shall have the meanings set forth below, and when the meaning
     is intended, the initial letter of the word shall be
     capitalized:
          2.1  "Award" means, individually or collectively,
     a grant under this Plan of Nonqualified Stock Options,
     Incentive Stock Options, Stock Appreciation Rights, Restricted
     Stock, Performance Shares or Performance Units, or Other
     Incentive Awards.
          2.2  "Award Agreement" means an agreement entered
     into by the Company and each Participant setting forth the
     terms and provisions applicable to Awards granted under this
     Plan.
          2.3  "Beneficial Owner" or "Beneficial Ownership"
     shall have the meaning ascribed to such term in Rule 13d-3 of
     the General Rules and Regulations under the Exchange Act.
          2.4  "Board" or "Board of Directors" means the
     Board of Directors of the Company.
          2.5  "Change in Control" of the Company means,
     and shall be deemed to have occurred upon, any of the
     following events:
          (a)  Any Person (other than those Persons in control of
                    the Company as of the Effective Date, or other than
                    a trustee or other fiduciary holding securities
                    under an employee benefit plan of the Company, or a
                    corporation owned directly or indirectly by the
                    stockholders of the Company in substantially the
                    same proportions as their ownership of stock of the
                    Company) becomes the Beneficial Owner, directly or
                    indirectly, of securities of the Company
                    representing thirty percent (30%) or more of the
                    combined voting power of the Company's then
                    outstanding securities; or
          (b)  During any period of two (2) consecutive years (not
                    including any period prior to the Effective Date),
                    individuals who at the beginning of such period
                    constitute the Board (and any new Director, whose
                    election by the Company's stockholders was approved
                    by a vote of at least two-thirds (2/3) of the
                    Directors then still in office who either were
                    Directors at the beginning of the period or whose
                    election or nomination for election was so
                    approved), cease for any reason to constitute a
                    majority thereof; or
          (c)  The stockholders of the Company approve: (i) a plan
                    of complete liquidation of the Company; or (ii) an
                    agreement for the sale or disposition of all or
                    substantially all the Company's assets; or (iii) a
                    merger, consolidation, or reorganization of the
                    Company with or involving any other corporation,
                    other than a merger, consolidation, or
                    reorganization that would result in the voting
                    securities of the Company outstanding immediately
                    prior thereto continuing to represent (either by
                    remaining outstanding or by being converted into
                    voting securities of the surviving entity) at least
                    fifty percent (50%) of the combined voting power of
                    the voting securities of the Company (or such
                    surviving entity) outstanding immediately after
                    such merger, consolidation, or reorganization.
               However, IN no event shall a "Change in Control"
               be deemed to have occurred, with respect to a
               Participant, if the Participant is part of a purchasing
               group which consummates the Change-in-Control
               transaction.  A Participant shall be deemed "part of a
               purchasing group" for purposes of the preceding sentence
               if the Participant is an equity participant in the
               purchasing company or group (except for: (i) passive
               ownership of less than one percent (1%) of the stock of
               the purchasing company; or (ii) ownership of equity
               participation in the purchasing company or group which
               is otherwise not significant, as determined prior to the
               Change in Control by a majority of the nonemployee
               continuing Directors).
          2.6  "Code" means the Internal Revenue Code of
     1986, as amended from time to time.
          2.7  "Committee" means the Compensation Committee
     of the Board, as specified in Article 3 herein.
          2.8  "Company" means Katy Industries, Inc., a
     Delaware corporation, and the Company's Subsidiaries, as well
     as any successor to any of such entities as provided in
     Article 19 herein.
          2.9  "Director" means any individual who is a
     member of the Board of Directors of the Company
          2.10 "Disability" shall have the meaning ascribed
     to such term in the Participant's governing long-term
     disability plan.
          2.11 "Effective Date" shall have the meaning
     ascribed to such term in Section 1.1 hereof.
          2.12 "Employee" means any nonunion employee of
     the Company.  Nonemployee Directors shall not be considered
     Employees under this Plan unless specifically designated
     otherwise.
          2.13 "Exchange Act" means the Securities Exchange
     Act of 1934, as amended from time to time, or any successor
     act thereto.
          2.14 "Fair Market Value" shall be determined on
     the basis of the closing sale price on the principal
     securities exchange on which the Shares are publicly traded
     or, if there is no such sale on the relevant date, then on the
     last previous day on which a sale was reported.
          2.15 "Freestanding SAR" means an SAR that is
     granted independently of any Options, as described in Article
     7 herein.
          2.16 "Incentive Stock Option" or "ISO" means an
     option to purchase Shares granted under Article 6 herein and
     which is designated as an Incentive Stock Option and which is
     intended to meet the requirements of Code Section 422.
          2.17 "Insider" shall mean an individual who is,
     on the relevant date, an officer, director or ten percent
     (10%) beneficial owner of any class of the Company's equity
     securities that is registered pursuant to Section 12 of the
     Exchange Act, all as defined under Section 16 of the Exchange
     Act.
          2.18 "Named Executive Officer" means a
     Participant who, as of the date of vesting and/or payout of an
     Award, as applicable, is one of the group of "covered
     employees," as defined in the regulations promulgated under
     Code Section 162(m), or any successor statute.
          2.19 "Nonemployee Director" means an individual
     who is a member of the Board of Directors of the Company but
     who is not an Employee of the Company.
          2.20 "Nonqualified Stock Option" or "NQSO" means
     an option to purchase Shares granted under Article 6 herein
     and which is not intended to meet the requirements of Code
     Section 422.
          2.21 "Option" means an Incentive Stock Option or
     a Nonqualified Stock Option, as described in Article 6 herein.
          2.22 "Option Price" means the price at which a
     Share may be purchased by a Participant pursuant to an Option.
          2.23 "Other Incentive Award" means an award
     granted pursuant to Article 10 hereof.
          2.24 "Participant" means any individual
     designated as a participant in the Plan by the Committee in
     accordance with Section 5.1 and who has an outstanding Award
     granted under the Plan.
          2.25 "Performance-Based Exception" means the
     performance-based exception from the tax deductibility
     limitations of Code Section 162(m).
          2.26 "Performance Period" means the time period
     during which performance goals must be achieved with respect
     to an Award, as determined by the Committee.
          2.27 "Performance Share" means an Award granted
     to a Participant, as described in Article 9 herein.
          2.28 "Performance Unit" means an Award granted to
     a Participant, as described in Article 9 herein.
          2.29 "Period of Restriction" means the period
     during which the transfer of Shares of Restricted Stock is
     limited in some way (based on the passage of time, the
     achievement of performance goals, or upon the occurrence of
     other events as determined by the Committee, at its
     discretion), and the Shares are subject to a substantial risk
     of forfeiture, as provided in Article 8 herein.
          2.30 "Person" shall have the meaning ascribed to
     such term in Section 3(a)(9) of the Exchange Act and used in
     Sections 13(d) and 14(d) thereof, including a "group" as
     defined in Section 13(d) thereof.
          2.31 "Restricted Stock" means an Award granted to
     a Participant pursuant to Article 8 herein.
          2.32 "Retirement" shall have the meaning ascribed
     to such term in the Participant's governing Company sponsored
     retirement plan.
          2.33 "Shares" means the shares of Common Stock,
     par value $1.00 per share, of the Company.
          2.34 "Stock Appreciation Right" or "SAR" means an
     Award, granted alone or in connection with a related Option,
     designated as an SAR, pursuant to the terms of Article 7
     herein.
          2.35 "Subsidiary" means any corporation,
     partnership, joint venture, affiliate, or other entity in
     which the Company has a majority voting interest, and which
     the Committee designates as a participating entity in the
     Plan.
          2.36 "Tandem SAR" means an SAR that is granted in
     connection with a related Option pursuant to Article 7 herein,
     the exercise of which shall require forfeiture of the right to
     purchase a Share under the related Option (and when a Share is
     purchased under the Option, the Tandem SAR shall similarly be
     canceled).
     Article 3.  Administration
          3.1  The Committee.  The Plan shall be
     administered by the Compensation Committee of the Board, or by
     any other Committee appointed by the Board consisting of not
     less than two (2) Directors who meet the "disinterested
     administration" rules of Rule 16b-3 under the Exchange Act and
     the definition of "outside director" within the meaning of
     Section 162(m) of the Code and the rules and regulations
     thereunder ("Code Section 162(m)").  The members of the
     Committee shall be appointed from time to time by, and shall
     serve at the discretion of, the Board of Directors.
          The Committee shall be comprised solely of
     Directors who are eligible to administer the Plan pursuant to
     Rule 16b-3 under the Exchange Act and Code Section 162(m). 
     However, if for any reason the Committee does not qualify to
     administer the Plan as contemplated by Rule 16b-3 and Code
     Section 162(m) of the Exchange Act, the Board of Directors may
     appoint a new Committee so as to comply with Rule 16b-3 and
     Code Section 162(m).
          3.2  Authority of the Committee.  Except as
     limited by law or by the Certificate of Incorporation or
     Bylaws of the Company, and subject to the provisions herein,
     the Committee shall have full power to select Employees and
     other key individuals performing services for the Company who
     shall participate in the Plan; determine the sizes and types
     of Awards; determine the terms and conditions of Awards in a
     manner consistent with the Plan; construe and interpret the
     Plan and any agreement or instrument entered into under the
     Plan; establish, amend, or waive rules and regulations for the
     Plan's administration; and (subject to the provisions of
     Article 16 herein) amend the terms and conditions of any
     outstanding Award to the extent such terms and conditions are
     within the discretion of the Committee as provided in the
     Plan.  Further, the Committee shall make all other
     determinations which may be necessary or advisable for the
     administration of the Plan.  As permitted by law, the
     Committee may delegate its authority as identified herein.
          The Committee may act only by a majority of its
     members in office, except that the members thereof may
     authorize any one or more of their members or any officer of
     the Company to execute and deliver documents or to take any
     other ministerial action on behalf of the Committee with
     respect to Awards made or to be made to Plan Participants.
          3.3  Decisions Binding.  All determinations and
     decisions made by the Committee pursuant to the provisions of
     the Plan and all related orders and resolutions of the Board
     shall be final, conclusive and binding on all persons,
     including the Company, its stockholders, Employees,
     Participants, and their estates and beneficiaries.
     Article 4.  Shares Subject to the Plan and Maximum Awards
          4.1  Number of Shares Available for Grants. 
     Subject to adjustment as provided in Section 4.3 herein, the
     number of Shares hereby reserved for issuance under the Plan
     shall be 500,000; provided however, that the aggregate maximum
     number of Shares of Restricted Stock and Shares relating to
     Other incentive Awards which may be granted pursuant to
     Articles 8 and 10 herein, shall be 200,000.  Shares issued
     pursuant to the Plan may be either authorized unissued shares,
     treasury shares, reacquired shares, or any combination
     thereof.
          Unless and until the Committee determines that an
     Award to a Named Executive Officer shall not be designed to
     comply with the Performance-Based Exception, the following
     rules shall apply to grants of such Awards under the Plan:
          (a)  The maximum aggregate number of Shares that may be
                    granted or that may vest, as applicable, pursuant
                    to any Award held by any Named Executive Officer
                    shall be 100,000 Shares.
          (b)  The maximum aggregate cash payout with respect to
                    Awards granted in any fiscal year which may be made
                    to any Named Executive Officer shall be $500,000.
          4.2  Lapsed Awards.  If any Award granted under
     this Plan is canceled, terminates, expires, or lapses for any
     reason (with the exception of the termination of a Tandem SAR
     upon exercise of the related Option, or the termination of a
     related Option upon exercise of the corresponding Tandem SAR),
     any Shares subject to such Award again shall be available for
     the grant of an Award under the Plan.
          4.3  Adjustments in Authorized Shares.  In the
     event of any change in corporate capitalization, such as a
     stock split, or a corporate transaction, such as any merger,
     consolidation, separation, including a spin-off, or other
     distribution of stock or property of the Company, any
     reorganization (whether or not such reorganization comes
     within the definition of such term in Code Section 368) or any
     partial or complete liquidation of the Company, such
     adjustment shall be made in the number and class of Shares
     which may be delivered under Section 4.1 herein and in the
     number and class of and/or price of Shares subject to
     outstanding Awards granted under the Plan, as may be
     determined to be appropriate and equitable by the Committee,
     in its sole discretion, to prevent dilution or enlargement of
     rights; provided, however, that the number of Shares subject
     to any Award shall always be a whole number.
     Article 5.  Eligibility and Participation
          5.1  Eligibility.  Persons eligible to
     participate in this Plan include all officers, key employees
     of the Company and other key individuals performing services
     for the Company, as determined by the Committee, including
     Employees and other key individuals who are members of the
     Board and Employees who reside in countries other than the
     United States of America.  Notwithstanding the foregoing, no
     person who is a Director and is also a participant in any
     stock option plan of the Company exclusively for Nonemployee
     Directors shall be eligible to participate in the Plan.
          5.2  Actual Participation.  Subject to the
     provisions of the Plan, the Committee may from time to time,
     select from all eligible Employees and other key individuals
     performing services for the Company, those to whom Awards
     shall be granted and shall determine the nature and amount of
     each Award.
     Article 6.  Stock Options
          6.1  Grant of Options.  Subject to the terms and
     provisions of the Plan, Options may be granted to Participants
     in such number, and upon such terms, and at any time and from
     time to time as shall be determined by the Committee.
          6.2  Award Agreement.  Each Option grant shall be
     evidenced by an Award Agreement that shall specify the Option
     Price, the duration of the Option, the number of Shares to
     which the Option pertains, and such other provisions as the
     Committee shall determine.  The Option Agreement also shall
     specify whether the Option is intended to be an ISO within the
     meaning of Code Section 422, or an NQSO whose grant is
     intended not to fall under the provisions of Code Section 422.
          6.3  Option Price.  The Option Price for each
     grant of an Option under this Plan shall be at least equal to
     one hundred percent (100%) of the Fair Market Value of a Share
     on the date the Option is granted.  Except, however, the
     Option Price for each grant of an ISO under this Plan to an
     Employee who owns more than ten percent (10%) of the combined
     voting power of all classes of stock of the Company on the
     date the ISO is granted shall be equal to one hundred and ten
     percent (110%) of the Fair Market Value of a Share on the date
     the Option is granted.
          6.4  Duration of Options.  Each Option granted to
     a Participant shall expire at such time as the Committee shall
     determine at the time of grant; provided, however, that no
     Option shall be exercisable later than the tenth (10th)
     anniversary date of its grant.  Except, however, no ISO
     granted to an Employee who owns more than ten percent (10%) of
     the combined voting power of all classes of stock of the
     Company on the date the Incentive Stock Option is granted
     shall be exercisable later than the fifth (5th) anniversary
     date of its grant.
          6.5  Exercise of Options.  Options granted under
     this Article 6 shall be exercisable at such times and be
     subject to such restrictions and conditions as the Committee
     shall in each instance approve, which need not be the same for
     each grant or for each Participant.
          6.6  Payment.  Options granted under this Article
     6 shall be exercised by the delivery of a written notice of
     exercise to the Company, setting forth the number of Shares
     with respect to which the Option is to be exercised,
     accompanied by full payment for the Shares.
          The Option Price upon exercise of any Option shall
     be payable to the Company in full either: (a) in cash or its
     equivalent, or (b) by tendering previously acquired Shares
     having an aggregate Fair Market Value at the time of exercise
     equal to the total Option Price (provided that the Shares
     which are tendered must have been held by the Participant for
     at least six (6) months prior to their tender to satisfy the
     Option Price), or (c) by a combination of (a) and (b).
          The Committee also may allow cashless exercise as
     permitted under Federal Reserve Board's Regulation T, subject
     to applicable securities law restrictions, or by any other
     means which the Committee determines to be consistent with the
     Plan's purpose and applicable law.
          As soon as practicable after receipt of a written
     notification of exercise and full payment, the Company shall
     deliver to the Participant, in the Participant's name, Share
     certificates in an appropriate amount based upon the number of
     Shares purchased under the Option(s).
          6.7  Restrictions on Share Transferability.  The
     Committee may impose such restrictions on any Shares acquired
     pursuant to the exercise of an Option granted under this
     Article 6 as it may deem advisable, including, without
     limitation, restrictions under applicable Federal securities
     laws, under the requirements of any stock exchange or market
     upon which such Shares are then listed and/or traded, and
     under any blue sky or state securities laws applicable to such
     Shares.
          6.8  Termination of Employment.  Each
     Participant's Option Award Agreement shall set forth the
     extent to which the Participant shall have the right to
     exercise the Option following termination of the Participant's
     employment with the Company and/or its Subsidiaries.  Such
     provisions shall be determined in the sole discretion of the
     Committee, shall be included in the Award Agreement entered
     into with each Participant, need not be uniform among all
     Options issued pursuant to this Article 6, and may reflect
     distinctions based on the reasons for termination of
     employment.
          6.9  Nontransferability of Options.
          (a)  Incentive Stock Options.  No ISO granted under the
                    Plan may be sold, transferred, pledged, assigned,
                    or otherwise alienated or hypothecated, other than
                    by will or by the laws of descent and distribution. 
                    Further, all ISOs granted to a Participant under
                    the Plan shall be exercisable during his or her
                    lifetime only by such Participant.
          (b)  Nonqualified Stock Options.  Except as otherwise
                    provided in a Participant's Award Agreement, no
                    NQSO granted under this Article 6 may be sold,
                    transferred, pledged, assigned, or otherwise
                    alienated or hypothecated, other than by will or by
                    the laws of descent and distribution.  Further,
                    except as otherwise provided in a Participant's
                    Award Agreement, all NQSOs granted to a Participant
                    under this Article 6 shall be exercisable during
                    his or her lifetime only by such Participant.
          6.10 Maximum Amount of Incentive Stock Option Award. 
     The aggregate Fair Market Value (as of the date of grant of an
     Incentive Stock Option) of Shares with respect to which
     Incentive Stock Options granted to an Employee under this Plan
     are exercisable for the first time by an Employee in any
     calendar year shall not exceed one hundred thousand dollars
     ($100,000.00).
     Article 7.  Stock Appreciation Rights
          7.1  Grant of SARs.  Subject to the terms and
     conditions of the Plan, SARs may be granted to Participants at
     any time and from time to time as shall be determined by the
     Committee.  The Committee may grant Freestanding SARs, Tandem
     SARs, or any combination of these forms of SAR.
          The Committee shall have complete discretion in
     determining the number of SARs granted to each Participant
     (subject to Article 4 herein) and, consistent with the
     provisions of the Plan, in determining the terms and
     conditions pertaining to such SARs.
          The grant price of a Freestanding SAR shall equal
     the Fair Market Value of a Share on the date of grant of the
     SAR.  The grant price of Tandem SARs shall equal the Option
     Price of the related Option.
          7.2  Exercise of Tandem SARs.  Tandem SARs may be
     exercised for all or part of the Shares subject to the related
     Option upon the surrender of the right to exercise the
     equivalent portion of the related Option.  A Tandem SAR may be
     exercised only with respect to the Shares for which its
     related Option is then exercisable.
          Notwithstanding any other provision of this Plan
     to the contrary, with respect to a Tandem SAR granted in
     connection with an ISO: (i) the Tandem SAR will expire no
     later than the expiration of the underlying ISO; (ii) the
     value of the payout with respect to the Tandem SAR may be for
     no more than one hundred percent (100%) of the difference
     between the Option Price of the underlying ISO and the Fair
     Market Value of the Shares subject to the underlying ISO at
     the time the Tandem SAR is exercised; and (iii) the Tandem SAR
     may be exercised only when the Fair Market Value of the Shares
     subject to the ISO exceeds the Option Price of the ISO.
          7.3  Exercise of Freestanding SARs.  Freestanding
     SARs may be exercised upon whatever terms and conditions the
     Committee, in its sole discretion, imposes upon them.
          7.4  SAR Agreement.  Each SAR grant shall be
     evidenced by an Award Agreement that shall specify the grant
     price, the term of the SAR, and such other provisions as the
     Committee shall determine.
          7.5  Term of SARs.  The term of an SAR granted
     under the Plan shall be determined by the Committee, in its
     sole discretion; provided, however, that such term shall not
     exceed ten (10) years.
          7.6  Payment of SAR Amount.  Upon exercise of an
     SAR, a Participant shall be entitled to receive payment from
     the Company in an amount determined by multiplying:
          (a)  The difference between the Fair Market Value of a
                    Share on the date of exercise over the grant price;
                    by
          (b)  The number of Shares with respect to which the SAR
                    is exercised.
          At the discretion of the Committee, the payment
     upon SAR exercise may be in cash, in Shares of equivalent
     value, or in some combination thereof.
          7.7  Rule 16b-3 Requirements.  Notwithstanding
     any other provision of the Plan, the Committee may impose such
     conditions on exercise of an SAR (including, without
     limitation, the right of the Committee to limit the time of
     exercise to specified periods) as may be required to satisfy
     the requirements of Section 16 of the Exchange Act (or any
     successor rule).
          7.8  Termination of Employment.  Each SAR Award
     Agreement shall set forth the extent to which the Participant
     shall have the right to exercise the SAR following termination
     of the Participant's employment with the Company and/or its
     Subsidiaries.  Such provisions shall be determined in the sole
     discretion of the Committee, shall be included in the Award
     Agreement entered into with Participants, need not be uniform
     among all SARs issued pursuant to the Plan, and may reflect
     distinctions based on the reasons for termination of
     employment.
          7.9  Nontransferability of SARs.  Except as
     otherwise provided in a Participant's Award Agreement, no SAR
     granted under the Plan may be sold, transferred, pledged,
     assigned, or otherwise alienated or hypothecated, other than
     by will or by the laws of descent and distribution.  Further,
     except as otherwise provided in a Participant's Award
     Agreement, all SARs granted to a Participant under the Plan
     shall be exercisable during his or her lifetime only by such
     Participant.
     Article 8.  Restricted Stock
          8.1  Grant of Restricted Stock.  Subject to the
     terms and provisions of the Plan, the Committee, at any time
     and from time to time, may grant Shares of Restricted Stock to
     Participants in such amounts as the Committee shall determine.
          8.2  Restricted Stock Agreement.  Each Restricted
     Stock grant shall be evidenced by an Award Agreement that
     shall specify the Period(s) of Restriction, the number of
     Shares of Restricted Stock granted, and such other provisions
     as the Committee shall determine.
          8.3  Transferability.  Except as provided in this
     Article 8, the Shares of Restricted Stock granted herein may
     not be sold, transferred, pledged, assigned, or otherwise
     alienated or hypothecated until the end of the applicable
     Period of Restriction established by the Committee and
     specified in the Restricted Stock Award Agreement, or upon
     earlier satisfaction of any other conditions, as specified by
     the Committee in its sole discretion and set forth in the
     Restricted Stock Agreement.  All rights with respect to the
     Restricted Stock granted to a Participant under the Plan shall
     be available during his or her lifetime only to such
     Participant.
          8.4  Other Restrictions.  Subject to Article 11
     herein, the Committee may impose such other conditions and/or
     restrictions on any Shares of Restricted Stock granted
     pursuant to the Plan as it may deem advisable including,
     without limitation, a requirement that Participants pay a
     stipulated purchase price for each Share of Restricted Stock,
     restrictions based upon the achievement of specific
     performance goals (Company-wide, divisional, and/or
     individual), time-based restrictions on vesting following the
     attainment of the performance goals, and/or restrictions under
     applicable Federal or state securities laws.
          The Company shall retain the certificates
     representing Shares of Restricted Stock in the Company's
     possession until such time as all conditions and/or
     restrictions applicable to such Shares have been satisfied.
          Except as otherwise provided in this Article 8,
     Shares of Restricted Stock covered by each Restricted Stock
     grant made under the Plan shall become freely transferable by
     the Participant after the last day of the applicable Period of
     Restriction.
          8.5  Voting Rights.  During the Period of
     Restriction, Participants holding Shares of Restricted Stock
     granted hereunder may exercise full voting rights with respect
     to those Shares.
          8.6  Dividends and Other Distributions.  During
     the Period of Restriction, Participants holding Shares of
     Restricted Stock granted hereunder may be credited with
     regular cash dividends paid with respect to the underlying
     Shares while they are so held.  The Committee may apply any
     restrictions to the dividends that the Committee deems
     appropriate.
          In the event that any dividend constitutes a
     "derivative security" or an "equity security" pursuant to Rule
     16(a) under the Exchange Act, such dividend shall be subject
     to a vesting period equal to the remaining vesting period of
     the Shares of Restricted Stock with respect to which the
     dividend is paid.
          8.7  Termination of Employment.  Each Restricted
     Stock Award Agreement shall set forth the extent to which the
     Participant shall have the right to receive unvested
     Restricted Shares following termination of the Participant's
     employment with the Company and/or its Subsidiaries.  Such
     provisions shall be determined in the sole discretion of the
     Committee, shall be included in the Award Agreement entered
     into with each Participant, need not be uniform among all
     Shares of Restricted Stock issued pursuant to the Plan, and
     may reflect distinctions based on the reasons for termination
     of employment; provided, however that, except in the cases of
     terminations connected with a Change in Control and
     terminations by reason of death or Disability, the vesting of
     Shares of Restricted Stock which qualify for the Performance-Based
     Exception and which are held by Named Executive Officers
     shall occur at the time they otherwise would have, but for the
     employment termination.
     Article 9.  Performance Units and Performance Shares 
          9.1  Grant of Performance Units/Shares.  Subject
     to the terms of the Plan, Performance Units and/or Performance
     Shares may be granted to Participants in such amounts and upon
     such terms, and at any time and from time to time, as shall be
     determined by the Committee.
          9.2  Value of Performance Units/Shares.  Each
     Performance Unit shall have an initial value that is
     established by the Committee at the time of grant.  Each
     Performance Share shall have an initial value equal to the
     Fair Market Value of a Share on the date of grant.  The
     Committee shall set performance goals in its discretion which,
     depending on the extent to which they are met, will determine
     the number and/or value of Performance Units/Shares that will
     be paid out to the Participant.  For purposes of this Article
     9, the time period during which the performance goals must be
     met shall be called a "Performance Period."
          9.3  Earning of Performance Units/Shares. 
     Subject to the terms of this Plan, after the applicable
     Performance Period has ended, the holder of Performance
     Units/Shares shall be entitled to receive payout on the number
     and value of Performance Units/Shares earned by the
     Participant over the Performance Period, to be determined as a
     function of the extent to which the corresponding performance
     goals have been achieved.
          9.4  Form and Timing of Payment of Performance
     Units/ Shares.  Payment of earned Performance Units/Shares
     shall be made in a single lump sum within seventy-five (75)
     calendar days following the close of the applicable
     Performance Period.  Subject to the terms of this Plan, the
     Committee, in its sole discretion, may pay earned Performance
     Units/Shares in the form of cash or in Shares (or in a
     combination thereof) which have an aggregate Fair Market Value
     equal to the value of the earned Performance Units/Shares at
     the close of the applicable Performance Period.  Such Shares
     may be granted subject to any restrictions deemed appropriate
     by the Committee.
          Prior to the beginning of each Performance Period,
     Participants may elect to defer the receipt of Performance
     Unit/Share payout upon such terms as the Committee deems
     appropriate.
          At the discretion of the Committee, Participants
     may be entitled to receive any dividends declared with respect
     to Shares which have been earned in connection with grants of
     Performance Units and/or Performance Shares which have been
     earned, but not yet distributed to Participants (such
     dividends shall be subject to the same accrual, forfeiture,
     and payout restrictions as apply to dividends earned with
     respect to Shares of Restricted Stock, as set forth in Section
     8.6 herein).  In addition, Participants may, at the discretion
     of the Committee, be entitled to exercise their voting rights
     with respect to such Shares.
          9.5  Termination of Employment Due to Death,
     Disability, or Retirement.  In the event the employment of a
     Participant is terminated by reason of death, Disability or
     Retirement during a Performance Period, the participant shall
     receive a prorated payout of the Performance Units/Shares. 
     The prorated payout shall be determined by the Committee, in
     its sole discretion, shall be based upon the length of time
     that the Participant held the Performance Units/Shares during
     the Performance Period, and shall further be adjusted based on
     the achievement of the preestablished performance goals.
          Payment of earned Performance Units/Shares shall
     be made at the same time as payments are made to Participants
     who did not terminate employment during the applicable
     Performance Period.
          9.6  Termination of Employment for Other Reasons. 
     In the event that a Participant's employment terminates for
     any reason other than those reasons set forth in Section 9.5
     herein, all Performance Units/Shares shall be forfeited by the
     Participant to the Company.
          9.7  Nontransferability.  Except as otherwise
     provided in a Participant's Award Agreement, Performance
     Units/Shares may not be sold, transferred, pledged, assigned,
     or otherwise alienated or hypothecated, other than by will or
     by the laws of descent and distribution.  Further, except as
     otherwise provided in a Participant's Award Agreement, a
     Participant's rights under the Plan shall be exercisable
     during the Participant's lifetime only by the Participant or
     the Participant's legal representative.
     Article 10.  Other Incentive Awards
          10.1 Grant of Other Incentive Awards.  Subject to
     the terms and provisions of the Plan, Other Incentive Awards
     may be granted to Participants in such amount, upon such
     terms, and at any time and from time to time as shall be
     determined by the Committee.
          10.2 Other Incentive Award Agreement.  Each Other
     Incentive Award grant shall be evidenced by an Award Agreement
     that shall specify the amount of the Other Incentive Award
     granted, the terms and conditions applicable to such grant,
     the applicable Performance Period and performance goals, and
     such other provisions as the Committee shall determine,
     subject to the terms and provisions of the Plan.
          10.3 Nontransferability.  Except as otherwise
     provided in a Participant's Award Agreement, Other Incentive
     Awards may not be sold, transferred, pledged, assigned, or
     otherwise alienated or hypothecated, other than by will or by
     the laws of descent and distribution.
          10.4 Form and Timing of Payment of Other
     Incentive Awards.  Payment of Other Incentive Awards shall be
     made at such times and in such form, either in cash or in
     Shares (or a combination thereof) as established by the
     Committee subject to the terms of the Plan.  Such Shares may
     be granted subject to any restrictions deemed appropriate by
     the Committee.  Without limiting the generality of the
     foregoing, annual incentive awards may be paid in the form of
     Other Incentive Awards (which may or may not be subject to
     restrictions, at the discretion of the Committee).
     Article 11.  Performance Measures
          Unless and until the Committee proposes for
     shareholder vote and shareholders approve a change in the
     general performance measures set forth in this Article 11, the
     attainment of which may determine the degree of payout and/or
     vesting with respect to Awards to Named Executive Officers
     which are designed to qualify for the Performance-Based
     Exception, the performance measure(s) to be used for purposes
     of such grants shall be chosen from among the following
     alternatives:
          (a)  Return on Assets ("ROA");
          (b)  Cash Flow Return on Investment ("CFROI");
          (c)  Earnings Before Income Taxes ("EBIT"); or
          (d)  Net Earnings.
          The Committee shall have the discretion to adjust
     the determinations of the degree of attainment of the
     preestablished performance goals; provided, however, that
     Awards which are designed to qualify for the Performance Based
     Exception, and which are held by Named Executive Officers, may
     not be adjusted upward (the Committee shall retain the
     discretion to adjust such Awards downward).
          In the event that applicable tax and/or securities
     laws change to permit Committee discretion to alter the
     governing performance measures without obtaining shareholder
     approval of such changes, the Committee shall have sole
     discretion to make such changes without obtaining shareholder
     approval.  In addition, in the event that the Committee
     determines that it is advisable to grant Awards which shall
     not qualify for the Performance-Based Exception, the Committee
     may make such grants without satisfying the requirements of
     Code Section 162(m).
     Article 12.  Beneficiary Designation
          Each Participant under the Plan may from time to
     time, name any beneficiary or beneficiaries (who may be named
     contingently or successively) to whom any benefit under the
     Plan is to be paid in case of his or her death before he or
     she receives any or all of such benefit.  Each such
     designation shall revoke all prior designations by the same
     Participant, shall be in a form prescribed by the Company and
     will be effective only when filed by the Participant in
     writing with the Company, during the Participant's lifetime. 
     In the absence of any such designation, benefits remaining
     unpaid at the Participant's death shall be paid to the
     Participant's estate.
     Article 13.  Deferrals
          The Committee may permit a Participant to defer
     such Participant's receipt of the payment of cash or the
     delivery of Shares that would otherwise be due to such
     Participant by virtue of the exercise of an Option or SAR, the
     lapse or waiver of restrictions with respect to Restricted
     Stock, or the satisfaction of any requirements or goals with
     respect to Performance Units/Shares or Other Incentive Awards. 
     If any such deferral election is required or permitted, the
     Committee shall, in its sole discretion, establish rules and
     procedures for such payment deferrals.
     Article 14.  Rights of Employees
          14.1 Employment.  Nothing in the Plan shall
     interfere with or limit in any way the right of the Company to
     terminate any Participant's employment at any time, nor confer
     upon any Participant any right to continue in the employ of
     the Company.
          For purposes of this Plan, a transfer of a
     Participant's employment between the Company and a Subsidiary
     or between Subsidiaries, shall not be deemed to be a
     termination of employment.  Upon such a transfer, the
     Committee may make such adjustments to outstanding Awards as
     it deems appropriate to reflect the changed reporting
     relationships.
          14.2 Participation.  No Employee shall have the
     right to be selected to receive an Award under this Plan, or,
     having been so selected, to be selected to receive a future
     Award.
     Article 15.  Change in Control
          15.1 Treatment of Outstanding Awards.  Upon the
     occurrence of a Change in Control, unless otherwise
     specifically prohibited under applicable laws, or by the rules
     and regulations of any governing governmental agencies or
     national securities exchanges:
          (a)  Any and all Options and SARs granted hereunder
                    shall become immediately exercisable, and shall
                    remain exercisable throughout their entire term;
          (b)  Any restriction periods and restrictions imposed on
                    Restricted Shares shall lapse;
          (c)  The target payout opportunities attainable under
                    all outstanding Awards of Performance Units and
                    Performance Shares and Other Incentive Awards shall
                    be deemed to have been fully earned for the entire
                    Performance Period(s) as of the effective date of
                    the Change in Control.  The vesting of all such
                    Awards shall be accelerated as of the effective
                    date of the Change in Control, and there shall be
                    paid out in cash to Participants within thirty (30)
                    days following the effective date of the Change in
                    Control a pro rata portion of all targeted Award
                    opportunities associated with such outstanding
                    Awards, based on the number of complete and partial
                    calendar months within the Performance Period which
                    had elapsed as of such effective date; and
          (d)  Subject to Article 16 herein, the Committee shall
                    have the authority to make any modifications to the
                    Awards as determined by the Committee to be
                    appropriate before the effective date of the Change
                    in Control.
          15.2 Termination, Amendment, and Modifications of
     Change-in-Control Provisions.  Notwithstanding any other
     provision of this Plan or any Award Agreement provision, the
     provisions of this Article 15 may not be terminated, amended,
     or modified on or after the date of a Change in Control to
     affect adversely any Award theretofore granted under the Plan
     without the prior written consent of the Participant with
     respect to said Participant's outstanding Awards; provided,
     however, the Board of Directors, upon recommendation of the
     Committee, may terminate, amend, or modify this Article 15 at
     any time and from time to time prior to the date of a Change
     in Control.
     Article 16.  Amendment, Modification, and Termination
          16.1 Amendment, Modification, and Termination. 
     The Board may at any time and from time to time, alter, amend,
     suspend or terminate the Plan in whole or in part; provided,
     however, that no amendment which requires shareholder approval
     in order for the Plan to continue to comply with Rule 16b-3
     under the Exchange Act, including any successor to such Rule,
     shall be effective unless such amendment shall be approved by
     the requisite vote of shareholders of the Company entitled to
     vote thereon.
          The Committee shall not have the authority to
     cancel outstanding Awards and issue substitute Awards in
     replacement thereof.
          16.2 Awards Previously Granted.  No termination,
     amendment, or modification of the Plan shall adversely affect
     in any material way any Award previously granted under the
     Plan, without the written consent of the Participant holding
     such Award.
          16.3 Compliance with Code Section 162(m).  At all
     times when Code Section 162(m) is applicable, all Awards
     granted under this Plan shall comply with the requirements of
     Code Section 162(m); provided, however, that in the event the
     Committee determines that such compliance is not desired with
     respect to any Award or Awards available for grant under the
     Plan, then compliance with Code Section 162(m) will not be
     required.  In addition, in the event that changes are made to
     Code Section 162(m) to permit greater flexibility with respect
     to any Award or Awards available under the Plan, the Committee
     may, subject to this Article 16, make any adjustments it deems
     appropriate.
     Article 17.  Withholding
          17.1 Tax Withholding.  The Company shall have the
     power and the right to deduct or withhold, or require a
     Participant to remit to the Company, an amount sufficient to
     satisfy Federal, state, and local taxes, domestic or foreign,
     required by law or regulation to be withheld with respect to
     any taxable event arising as a result of this Plan.
          17.2 Share Withholding.  With respect to
     withholding required upon the exercise of Options or SARs,
     upon the lapse of restrictions on Restricted Stock, or upon
     any other taxable event arising as a result of Awards granted
     hereunder, Participants may elect, subject to the approval of
     the Committee, to satisfy the withholding requirement, in
     whole or in part, by having the Company withhold Shares having
     a Fair Market Value on the date the tax is to be determined
     equal to the minimum statutory total tax which could be
     imposed on the transaction.  All such elections shall be
     irrevocable, made in writing, signed by the Participant, and
     shall be subject to any restrictions or limitations that the
     Committee, in its sole discretion, deems appropriate.
     Article 18.  Financial Assistance
          If the Committee determines that such action is
     advisable, the Company may assist any person to whom an Award
     has been granted in obtaining financing from the Company (or
     under any program of the Company approved pursuant to
     applicable law), or from a bank or other third party on such
     terms as are determined by the Committee, and in such amount
     as is required to accomplish the purposes of the Plan,
     including, but not limited to, to permit the exercise of an
     Award, the participation therein, and/or the payment of any
     taxes in respect thereof.  Such assistance may take any form
     that the Committee deems appropriate, including, but not
     limited to, a direct loan from the Company, a guarantee of the
     obligation by the Company, or the maintenance by the Company
     of deposits with such bank or third party.
     Article 19.  Indemnification
          Each person who is or shall have been a member of
     the Committee, or of the Board, shall be indemnified and held
     harmless by the Company against and from any loss, cost,
     liability or expense that may be imposed upon or reasonably
     incurred by him or her in connection with or resulting from
     any claim, action, suit, or proceeding to which he or she may
     be a party or in which he or she may be involved by reason of
     any action taken or failure to act under the Plan and against
     and from any and all amounts paid by him or her in settlement
     thereof, with the Company's approval, or paid by him or her in
     satisfaction of any judgment in any such action, suit, or
     proceeding against him or her, provided he or she shall give
     the Company an opportunity at its own expense, to handle and
     defend the same before he or she undertakes to handle and
     defend it on his or her own behalf.  The foregoing right of
     indemnification shall not be exclusive of any other rights of
     indemnification to which such persons may be entitled under
     the Company's Articles of Incorporation of Bylaws, as a matter
     of law, or otherwise, or any power that the Company may have
     to indemnify them or hold them harmless.
     Article 20.  Successors
          All obligations of the Company under the Plan with
     respect to Awards granted hereunder shall be binding on any
     successor to the Company, whether the existence of such
     successor is the result of a direct or indirect purchase,
     merger, consolidation, or otherwise, of all or substantially
     all of the business and/or assets of the Company.
     Article 21.  Legal Construction
          21.1 Gender and Number.  Except where otherwise
     indicated by the context, any masculine term used herein also
     shall include the feminine; the plural shall include the
     singular and the singular shall include the plural.
          21.2 Severability.  In the event any provision of
     the Plan shall be held illegal or invalid for any reason, the
     illegality or invalidity shall not affect the remaining parts
     of the Plan, and the Plan shall be construed and enforced as
     if the illegal or invalid provision had not been included.
          21.3 Requirements of Law.  The granting of Awards
     and the issuance of Shares under the Plan shall be subject to
     all applicable laws, rules, and regulations, and to such
     approvals by any governmental agencies or national securities
     exchanges as may be required.
          21.4 Securities Law and Tax Law Compliance.  With
     respect to Insiders, transactions under this Plan are intended
     to comply with all applicable conditions or Rule 16b-3 or its
     successors under the 1934 Act and Code Section 162(m).  To the
     extent any provision of the plan or action by the Committee
     fails to so comply it shall be deemed null and void, to the
     extent permitted by law and deemed advisable by the Committee.
          21.5 Stockholder Adoption.  This Plan shall be
     submitted to the stockholders of the Company, for their
     approval and adoption in accordance with applicable law and
     Rule 16b-3 under the Exchange Act and Code Section 162(m). 
     All Awards made hereunder prior to stockholder approval shall
     be granted contingent upon such approval.  If this Plan is not
     so approved and adopted by stockholders, all Awards granted
     hereunder shall be null and void.
          21.6 Governing Law.  To the extent not preempted
     by Federal law, the Plan, and all agreements hereunder, shall
     be construed in accordance with and governed by the laws of
     the State of Delaware.
     
     
          <PAGE>
HOGAN & HARTSON
L.L.P.


          ONE TABOR CENTER
          1200 SEVENTEENTH STREET, SUITE 1500
          DENVER, COLORADO  80202
          TEL (303) 899-7300
          FAX (303) 899-7333
June 21, 1995


Katy Industries, Inc.
6300 S. Syracuse Way, Suite 300
Englewood, Colorado  80111

          Re:  Registration Statement on Form S-8

Dear Gentlemen:

          We have acted as special counsel to Katy Industries,
Inc., a Delaware corporation (the "Company") in connection with
the preparation of the Form S-8 Registration Statement of the
Company filed with the Securities and Exchange Commission (the
"Registration Statement"), with respect to the registration of
500,000 shares of the Company's Common Stock, $1.00 par value
per share (the "Shares") issuable pursuant to the Katy
Industries, Inc. Long-Term Incentive Plan (the "Plan").
          In connection with this opinion, we have made such
inquiries, examined such documents and corporate records and
relied upon such certificates of officers of the Company and
public officials as we have considered necessary or appropriate
for purposes of giving the opinions hereinafter set forth.  We
have assumed the genuineness and authenticity of all signatures
on original documents, the authenticity of all documents
submitted to us as originals and the conformity to originals of
all documents submitted to us as copies thereof.
          On the basis of the foregoing and subject to the
assumptions, qualifications, limitations and exceptions set
forth herein, we are of the opinion that, assuming the
Registration Statement shall have become effective pursuant to
the provisions of the Securities Act of 1933, as amended, the
Shares being offered under the Plan have been duly authorized
and, when duly issued in accordance with the Registration
Statement and the terms of the Plan and any agreement,
resolution or other instrument governing such issuance, the
Shares so issued will be validly issued, fully paid and
nonassessable.

     We assume no obligation to advise you of any changes in the foregoing 
subsequent to the delivery of this opinion letter.  This opinion letter
has been prepared solely for your use in connection with the filing of
the Registration Statement on the date of this opinion letter and should 
not be quoted in whole or in part or otherwise be referred to, nor filed
with or furnished to any governmental agency or other person or entity,
without the prior written consent of this firm.

     We hereby consent to the filing of this opinion letter as Exhibit
5.1 to the Registration Statement.

                                   Very truly yours,



                                   Hogan & Hartson
                                   
BLR/sbo



<PAGE>
INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in this
Registration Statement on Form S-8 of Katy Industries, Inc. of
our reports dated February 24, 1995 (March 14, 1995 as to Note
15) appearing in the Annual Report on Form 10-K of Katy
Industries, Inc. for the year ended December 31, 1994.





DELOITTE & TOUCHE LLP
Chicago, Illinois
June 21, 1995
[{"type": "S-8", "sequence": "1", "description": "FORM S-8 LONG TERM", "secsgml_size_bytes": 74909}]
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As filed with the Securities and Exchange Commission on June 21,
1995

Registration No. 33-_________
                                                      

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

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

Delaware
(State or other jurisdiction
of incorporation or organization)  
                                                                
                           75-1277589
                                                                
           (I.R.S. Employer Identification Number)

6300 S. Syracuse Way, Suite 300
Englewood, Colorado  80111
(Address of Principal Executive Offices)(Zip Code)

KATY INDUSTRIES, INC. LONG-TERM INCENTIVE PLAN
(Full title of the plan)

John R. Prann, Jr.
President and Chief Executive Officer
6300 S. Syracuse Way, Suite 300
Englewood, Colorado  80111
Telephone:  (303) 290-9300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:

Bruce L. Rogers, Esq.
Hogan & Hartson L.L.P.
One Tabor Center
1200 Seventeenth Street, Suite 1500
Denver, Colorado  80202

Calculation of Registration Fee
Title of securities to be registered  - Common Stock, par value
$1.00 per share
Amount to be registered - 500,000
Proposed maximum price per share (1) - $8.25
Proposed maximum aggregate offering price (1) - $4,125,000
Amount of registration fee (2) - $1,422.41

(1)  Calculated pursuant to Rule 457(h), based on an assumed
price of $8.25 per share, which represents the average of the high
and low  
prices of such securities reported in the consolidated reporting
system on June 15, 1995.
(2)  Registration fee is calculated on the basis of 1/29 of 1%
of the proposed maximum aggregate offering price of $4,125,000.
PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

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

PART II

INFORMATION REQUIREMENT IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Certain Documents by Reference.

          The following documents filed with the Securities and
Exchange Commission are incorporated herein by reference:

               (a)  The Annual Report on Form 10-K of Katy
Industries, Inc. (the "Registrant") for the year ended
December 31, 1994, filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act").

               (b)  All other reports filed pursuant to
Section 13(a) or 15(d) of the Exchange Act, since the end of the
fiscal year covered by the Registrant document referred to in (a)
above.

          All reports and other documents subsequently filed by
the Registrant 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 then offered hereby
have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of the 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 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 deemed to be incorporated by reference herein modifies or
supersedes 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.

          Section 102(b)(7) of the General Corporation Law of
the State of Delaware permits a Delaware corporation to limit the
personal liability of its directors in accordance with the
provisions set forth therein.  The Amended and Restated
Certificate of Incorporation of the Registrant provides that the
personal liability of its directors shall be limited to the
fullest extent permitted by applicable law.

          Section 145 of the General Corporation Law of the
State of Delaware contains provisions permitting Delaware
corporations to indemnify directors, officers, employees or agents
against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person was or is
a director, officer, employee or agent of the corporation provided
that (i) such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the corporation's
best interest and (ii) in the case of a criminal proceeding such
person had no reasonable cause to believe his or her conduct was
unlawful.  In the case of actions or suits by or in the right of
the corporation, no indemnification shall be made in a case in
which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall have determined upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses.  Indemnification as described above
shall only be granted in a specific case upon a determination that
indemnification is proper in the circumstances because the
indemnified person has met the applicable standard of conduct. 
Such determination shall be made (a) by a majority of a quorum of
directors who were not parties to such proceeding, (b) if such
quorum cannot be obtained or if a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion or (c) by the stockholders of the corporation.  The
Amended and Restated Certificate of Incorporation and the By-Laws
of the Registrant provide for indemnification of its directors and
officers to the fullest extent permitted by applicable law.

Item 7.  Exemption from Registration Claimed.

          Not applicable.

Item 8.  Exhibits.

          Reference is made to the Exhibit Index that
immediately precedes the exhibits filed with this Registration
Statement.

Item 9.  Undertakings.

          (a)  The undersigned Registrant hereby undertakes:

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

                    (i)  To include any prospectus required
by section 10(a)(3) of 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 set forth 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 the undertakings set forth in
paragraphs (i) and (ii) above do not apply if the Registration
Statement is on Form 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 Registrant pursuant
to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in this 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 registration by means of
a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.

          (b)  The undersigned Registrant hereby further
undertakes that, for the purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange
Act (and, where applicable, each filing of any employee benefit
plan's annual report pursuant 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.

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

          Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on the 21st
day of June, 1995.

                              KATY INDUSTRIES, INC.
                              
                              
                              By:  /s/ John R. Prann, Jr.
                                   John R. Prann, Jr.,
                                   President, Chief
                                   Executive Officer and
                                   Chief Operating          Officer

          KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints John R.
Prann, Jr. and Paul Kurowski, and each of them, his true and
lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform
each and every act and thing requisite or necessary to be done
in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

          Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement on Form S-8 has been
signed by the following persons in the capacities and as of the
date indicated.
Signature
Title
Date

/s/ Philip E. Johnson
Philip E. Johnson
    Chairman of the Board
    June 21, 1995
/s/ John R. Prann, Jr.
John R. Prann, Jr.
    President, Chief Executive Officer and Director
June 21, 1995
/s/ Paul Kurowski
Paul Kurowski
    Chief Financial Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer)  June 21, 1995
/s/ Lutz Raettig
Lutz Raettig
    Director   June 21, 1995
/s/ Jacob Saliba
Jacob Saliba
    Director   June 21, 1995
/s/ Charles W. Sahlman
Charles W. Sahlman
    Director   June 21, 1995
/s/ Wallace E. Carroll, Jr.
Wallace E. Carroll, Jr.
    Director   June 21, 1995
/s/ Arthur R. Miller
Arthur R. Miller
    Director   June 21, 1995
/s/ William F. Andrews
William F. Andrews
    Director   June 21, 1995
/s/ Glenn W. Turcotte
Glenn W. Turcotte
    Director   June 21, 1995
/s/ William H. Murphy
William H. Murphy
    Director   June 21, 1995
/s/ Daniel B. Carroll
Daniel B. Carroll       Director   June 21, 1995
INDEX TO EXHIBITS

Exhibit
Number    
                Description                                     
                Sequentially
                                                                
                                              Numbered Page
4.1 Katy Industries, Inc. Long-Term Incentive Plan    
5.1 Opinion of Hogan & Hartson L.L.P.  
23.1     Consent of Deloitte & Touche LLP   
23.2     Consent of Hogan & Hartson L.L.P. - included in Exhibit
5.1 
25.1     Powers of Attorney - included in Part II of Registration
Statement     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     EXHIBIT 4.1
     Katy Industries, Inc.
     Long-Term Incentive Plan
     THIS DOCUMENT CONSTITUTES PART OF THE PROSPECTUS COVERING
     SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES
     ACT OF 1993.
Contents  
                                                        Page

Article 1. Establishment, Objectives, and Duration      1
Article 2.  Definitions                                 1
Article 3.  Administration                              5
Article 4.  Shares Subject to the Plan and 
            Maximum Awards                              6
Article 5.  Eligibility and Participation               7
Article 6.  Stock Options                               8
Article 7.  Stock Appreciation Rights                  10
Article 8.  Restricted Stock                           11
Article 9.  Performance Units and Performance 
            Shares                                     13
Article 10.  Other Incentive Awards                    14
Article 11.  Performance Measures                      15
Article 12.  Beneficiary Designation                   16
Article 13.  Deferrals                                 16
Article 14.  Rights of Employees                       16
Article 15.  Change in Control                         17
Article 16.  Amendment, Modification, and 
             Termination                               18
Article 17.  Withholding                               18
Article 18.  Financial Assistance                      19
Article 19.  Indemnification                           19
Article 20.  Successors                                19
Article 21.  Legal Construction                        19

Katy Industries, Inc.
     Long-Term Incentive Plan
     Article 1.     Establishment, Objectives, and Duration
          1.1  Establishment of the Plan.  Katy Industries,
     Inc., a Delaware corporation (hereinafter referred to as the
     "Company"), hereby establishes an incentive compensation plan
     to be known as the "Katy Industries, Inc. Long-Term Incentive
     Plan" (hereinafter referred to as the "Plan"), as set forth in
     this document.  The Plan permits the grant of Nonqualified
     Stock Options, Incentive Stock Options, Stock Appreciation
     Rights, Restricted Stock, Performance Shares and Performance
     Units, and Other Incentive Awards.
          Subject to approval by the Company's stockholders,
     the Plan shall become effective as of January 1, 1995 (the
     "Effective Date") and shall remain in effect as provided in
     Section 1.3 hereof.
          1.2  Objectives of the Plan.  The objectives of
     the Plan are to optimize the profitability and growth of the
     Company through incentives which are consistent with the
     Company's goals and which link the personal interests of
     Participants to those of the Company's stockholders; to
     provide Participants with an incentive for excellence in
     individual performance; and to promote teamwork among
     Participants.
          The Plan is further intended to provide
     flexibility to the Company in its ability to motivate,
     attract, and retain the services of Participants who make
     significant contributions to the Company's success and to
     allow Participants to share in the success of the Company.
          1.3  Duration of the Plan.  The Plan shall
     commence on the Effective Date, as described in Section 1.1
     hereof, and shall remain in effect, subject to the right of
     the Board of Directors to amend or terminate the Plan at any
     time pursuant to Article 16 hereof, until all Shares subject
     to it shall have been purchased or acquired according to the
     Plan's provisions.  However, in no event may an Award be
     granted under the Plan on or after December 31, 2004.
     Article 2.  Definitions
          Whenever used in the Plan, the following terms
     shall have the meanings set forth below, and when the meaning
     is intended, the initial letter of the word shall be
     capitalized:
          2.1  "Award" means, individually or collectively,
     a grant under this Plan of Nonqualified Stock Options,
     Incentive Stock Options, Stock Appreciation Rights, Restricted
     Stock, Performance Shares or Performance Units, or Other
     Incentive Awards.
          2.2  "Award Agreement" means an agreement entered
     into by the Company and each Participant setting forth the
     terms and provisions applicable to Awards granted under this
     Plan.
          2.3  "Beneficial Owner" or "Beneficial Ownership"
     shall have the meaning ascribed to such term in Rule 13d-3 of
     the General Rules and Regulations under the Exchange Act.
          2.4  "Board" or "Board of Directors" means the
     Board of Directors of the Company.
          2.5  "Change in Control" of the Company means,
     and shall be deemed to have occurred upon, any of the
     following events:
          (a)  Any Person (other than those Persons in control of
                    the Company as of the Effective Date, or other than
                    a trustee or other fiduciary holding securities
                    under an employee benefit plan of the Company, or a
                    corporation owned directly or indirectly by the
                    stockholders of the Company in substantially the
                    same proportions as their ownership of stock of the
                    Company) becomes the Beneficial Owner, directly or
                    indirectly, of securities of the Company
                    representing thirty percent (30%) or more of the
                    combined voting power of the Company's then
                    outstanding securities; or
          (b)  During any period of two (2) consecutive years (not
                    including any period prior to the Effective Date),
                    individuals who at the beginning of such period
                    constitute the Board (and any new Director, whose
                    election by the Company's stockholders was approved
                    by a vote of at least two-thirds (2/3) of the
                    Directors then still in office who either were
                    Directors at the beginning of the period or whose
                    election or nomination for election was so
                    approved), cease for any reason to constitute a
                    majority thereof; or
          (c)  The stockholders of the Company approve: (i) a plan
                    of complete liquidation of the Company; or (ii) an
                    agreement for the sale or disposition of all or
                    substantially all the Company's assets; or (iii) a
                    merger, consolidation, or reorganization of the
                    Company with or involving any other corporation,
                    other than a merger, consolidation, or
                    reorganization that would result in the voting
                    securities of the Company outstanding immediately
                    prior thereto continuing to represent (either by
                    remaining outstanding or by being converted into
                    voting securities of the surviving entity) at least
                    fifty percent (50%) of the combined voting power of
                    the voting securities of the Company (or such
                    surviving entity) outstanding immediately after
                    such merger, consolidation, or reorganization.
               However, IN no event shall a "Change in Control"
               be deemed to have occurred, with respect to a
               Participant, if the Participant is part of a purchasing
               group which consummates the Change-in-Control
               transaction.  A Participant shall be deemed "part of a
               purchasing group" for purposes of the preceding sentence
               if the Participant is an equity participant in the
               purchasing company or group (except for: (i) passive
               ownership of less than one percent (1%) of the stock of
               the purchasing company; or (ii) ownership of equity
               participation in the purchasing company or group which
               is otherwise not significant, as determined prior to the
               Change in Control by a majority of the nonemployee
               continuing Directors).
          2.6  "Code" means the Internal Revenue Code of
     1986, as amended from time to time.
          2.7  "Committee" means the Compensation Committee
     of the Board, as specified in Article 3 herein.
          2.8  "Company" means Katy Industries, Inc., a
     Delaware corporation, and the Company's Subsidiaries, as well
     as any successor to any of such entities as provided in
     Article 19 herein.
          2.9  "Director" means any individual who is a
     member of the Board of Directors of the Company
          2.10 "Disability" shall have the meaning ascribed
     to such term in the Participant's governing long-term
     disability plan.
          2.11 "Effective Date" shall have the meaning
     ascribed to such term in Section 1.1 hereof.
          2.12 "Employee" means any nonunion employee of
     the Company.  Nonemployee Directors shall not be considered
     Employees under this Plan unless specifically designated
     otherwise.
          2.13 "Exchange Act" means the Securities Exchange
     Act of 1934, as amended from time to time, or any successor
     act thereto.
          2.14 "Fair Market Value" shall be determined on
     the basis of the closing sale price on the principal
     securities exchange on which the Shares are publicly traded
     or, if there is no such sale on the relevant date, then on the
     last previous day on which a sale was reported.
          2.15 "Freestanding SAR" means an SAR that is
     granted independently of any Options, as described in Article
     7 herein.
          2.16 "Incentive Stock Option" or "ISO" means an
     option to purchase Shares granted under Article 6 herein and
     which is designated as an Incentive Stock Option and which is
     intended to meet the requirements of Code Section 422.
          2.17 "Insider" shall mean an individual who is,
     on the relevant date, an officer, director or ten percent
     (10%) beneficial owner of any class of the Company's equity
     securities that is registered pursuant to Section 12 of the
     Exchange Act, all as defined under Section 16 of the Exchange
     Act.
          2.18 "Named Executive Officer" means a
     Participant who, as of the date of vesting and/or payout of an
     Award, as applicable, is one of the group of "covered
     employees," as defined in the regulations promulgated under
     Code Section 162(m), or any successor statute.
          2.19 "Nonemployee Director" means an individual
     who is a member of the Board of Directors of the Company but
     who is not an Employee of the Company.
          2.20 "Nonqualified Stock Option" or "NQSO" means
     an option to purchase Shares granted under Article 6 herein
     and which is not intended to meet the requirements of Code
     Section 422.
          2.21 "Option" means an Incentive Stock Option or
     a Nonqualified Stock Option, as described in Article 6 herein.
          2.22 "Option Price" means the price at which a
     Share may be purchased by a Participant pursuant to an Option.
          2.23 "Other Incentive Award" means an award
     granted pursuant to Article 10 hereof.
          2.24 "Participant" means any individual
     designated as a participant in the Plan by the Committee in
     accordance with Section 5.1 and who has an outstanding Award
     granted under the Plan.
          2.25 "Performance-Based Exception" means the
     performance-based exception from the tax deductibility
     limitations of Code Section 162(m).
          2.26 "Performance Period" means the time period
     during which performance goals must be achieved with respect
     to an Award, as determined by the Committee.
          2.27 "Performance Share" means an Award granted
     to a Participant, as described in Article 9 herein.
          2.28 "Performance Unit" means an Award granted to
     a Participant, as described in Article 9 herein.
          2.29 "Period of Restriction" means the period
     during which the transfer of Shares of Restricted Stock is
     limited in some way (based on the passage of time, the
     achievement of performance goals, or upon the occurrence of
     other events as determined by the Committee, at its
     discretion), and the Shares are subject to a substantial risk
     of forfeiture, as provided in Article 8 herein.
          2.30 "Person" shall have the meaning ascribed to
     such term in Section 3(a)(9) of the Exchange Act and used in
     Sections 13(d) and 14(d) thereof, including a "group" as
     defined in Section 13(d) thereof.
          2.31 "Restricted Stock" means an Award granted to
     a Participant pursuant to Article 8 herein.
          2.32 "Retirement" shall have the meaning ascribed
     to such term in the Participant's governing Company sponsored
     retirement plan.
          2.33 "Shares" means the shares of Common Stock,
     par value $1.00 per share, of the Company.
          2.34 "Stock Appreciation Right" or "SAR" means an
     Award, granted alone or in connection with a related Option,
     designated as an SAR, pursuant to the terms of Article 7
     herein.
          2.35 "Subsidiary" means any corporation,
     partnership, joint venture, affiliate, or other entity in
     which the Company has a majority voting interest, and which
     the Committee designates as a participating entity in the
     Plan.
          2.36 "Tandem SAR" means an SAR that is granted in
     connection with a related Option pursuant to Article 7 herein,
     the exercise of which shall require forfeiture of the right to
     purchase a Share under the related Option (and when a Share is
     purchased under the Option, the Tandem SAR shall similarly be
     canceled).
     Article 3.  Administration
          3.1  The Committee.  The Plan shall be
     administered by the Compensation Committee of the Board, or by
     any other Committee appointed by the Board consisting of not
     less than two (2) Directors who meet the "disinterested
     administration" rules of Rule 16b-3 under the Exchange Act and
     the definition of "outside director" within the meaning of
     Section 162(m) of the Code and the rules and regulations
     thereunder ("Code Section 162(m)").  The members of the
     Committee shall be appointed from time to time by, and shall
     serve at the discretion of, the Board of Directors.
          The Committee shall be comprised solely of
     Directors who are eligible to administer the Plan pursuant to
     Rule 16b-3 under the Exchange Act and Code Section 162(m). 
     However, if for any reason the Committee does not qualify to
     administer the Plan as contemplated by Rule 16b-3 and Code
     Section 162(m) of the Exchange Act, the Board of Directors may
     appoint a new Committee so as to comply with Rule 16b-3 and
     Code Section 162(m).
          3.2  Authority of the Committee.  Except as
     limited by law or by the Certificate of Incorporation or
     Bylaws of the Company, and subject to the provisions herein,
     the Committee shall have full power to select Employees and
     other key individuals performing services for the Company who
     shall participate in the Plan; determine the sizes and types
     of Awards; determine the terms and conditions of Awards in a
     manner consistent with the Plan; construe and interpret the
     Plan and any agreement or instrument entered into under the
     Plan; establish, amend, or waive rules and regulations for the
     Plan's administration; and (subject to the provisions of
     Article 16 herein) amend the terms and conditions of any
     outstanding Award to the extent such terms and conditions are
     within the discretion of the Committee as provided in the
     Plan.  Further, the Committee shall make all other
     determinations which may be necessary or advisable for the
     administration of the Plan.  As permitted by law, the
     Committee may delegate its authority as identified herein.
          The Committee may act only by a majority of its
     members in office, except that the members thereof may
     authorize any one or more of their members or any officer of
     the Company to execute and deliver documents or to take any
     other ministerial action on behalf of the Committee with
     respect to Awards made or to be made to Plan Participants.
          3.3  Decisions Binding.  All determinations and
     decisions made by the Committee pursuant to the provisions of
     the Plan and all related orders and resolutions of the Board
     shall be final, conclusive and binding on all persons,
     including the Company, its stockholders, Employees,
     Participants, and their estates and beneficiaries.
     Article 4.  Shares Subject to the Plan and Maximum Awards
          4.1  Number of Shares Available for Grants. 
     Subject to adjustment as provided in Section 4.3 herein, the
     number of Shares hereby reserved for issuance under the Plan
     shall be 500,000; provided however, that the aggregate maximum
     number of Shares of Restricted Stock and Shares relating to
     Other incentive Awards which may be granted pursuant to
     Articles 8 and 10 herein, shall be 200,000.  Shares issued
     pursuant to the Plan may be either authorized unissued shares,
     treasury shares, reacquired shares, or any combination
     thereof.
          Unless and until the Committee determines that an
     Award to a Named Executive Officer shall not be designed to
     comply with the Performance-Based Exception, the following
     rules shall apply to grants of such Awards under the Plan:
          (a)  The maximum aggregate number of Shares that may be
                    granted or that may vest, as applicable, pursuant
                    to any Award held by any Named Executive Officer
                    shall be 100,000 Shares.
          (b)  The maximum aggregate cash payout with respect to
                    Awards granted in any fiscal year which may be made
                    to any Named Executive Officer shall be $500,000.
          4.2  Lapsed Awards.  If any Award granted under
     this Plan is canceled, terminates, expires, or lapses for any
     reason (with the exception of the termination of a Tandem SAR
     upon exercise of the related Option, or the termination of a
     related Option upon exercise of the corresponding Tandem SAR),
     any Shares subject to such Award again shall be available for
     the grant of an Award under the Plan.
          4.3  Adjustments in Authorized Shares.  In the
     event of any change in corporate capitalization, such as a
     stock split, or a corporate transaction, such as any merger,
     consolidation, separation, including a spin-off, or other
     distribution of stock or property of the Company, any
     reorganization (whether or not such reorganization comes
     within the definition of such term in Code Section 368) or any
     partial or complete liquidation of the Company, such
     adjustment shall be made in the number and class of Shares
     which may be delivered under Section 4.1 herein and in the
     number and class of and/or price of Shares subject to
     outstanding Awards granted under the Plan, as may be
     determined to be appropriate and equitable by the Committee,
     in its sole discretion, to prevent dilution or enlargement of
     rights; provided, however, that the number of Shares subject
     to any Award shall always be a whole number.
     Article 5.  Eligibility and Participation
          5.1  Eligibility.  Persons eligible to
     participate in this Plan include all officers, key employees
     of the Company and other key individuals performing services
     for the Company, as determined by the Committee, including
     Employees and other key individuals who are members of the
     Board and Employees who reside in countries other than the
     United States of America.  Notwithstanding the foregoing, no
     person who is a Director and is also a participant in any
     stock option plan of the Company exclusively for Nonemployee
     Directors shall be eligible to participate in the Plan.
          5.2  Actual Participation.  Subject to the
     provisions of the Plan, the Committee may from time to time,
     select from all eligible Employees and other key individuals
     performing services for the Company, those to whom Awards
     shall be granted and shall determine the nature and amount of
     each Award.
     Article 6.  Stock Options
          6.1  Grant of Options.  Subject to the terms and
     provisions of the Plan, Options may be granted to Participants
     in such number, and upon such terms, and at any time and from
     time to time as shall be determined by the Committee.
          6.2  Award Agreement.  Each Option grant shall be
     evidenced by an Award Agreement that shall specify the Option
     Price, the duration of the Option, the number of Shares to
     which the Option pertains, and such other provisions as the
     Committee shall determine.  The Option Agreement also shall
     specify whether the Option is intended to be an ISO within the
     meaning of Code Section 422, or an NQSO whose grant is
     intended not to fall under the provisions of Code Section 422.
          6.3  Option Price.  The Option Price for each
     grant of an Option under this Plan shall be at least equal to
     one hundred percent (100%) of the Fair Market Value of a Share
     on the date the Option is granted.  Except, however, the
     Option Price for each grant of an ISO under this Plan to an
     Employee who owns more than ten percent (10%) of the combined
     voting power of all classes of stock of the Company on the
     date the ISO is granted shall be equal to one hundred and ten
     percent (110%) of the Fair Market Value of a Share on the date
     the Option is granted.
          6.4  Duration of Options.  Each Option granted to
     a Participant shall expire at such time as the Committee shall
     determine at the time of grant; provided, however, that no
     Option shall be exercisable later than the tenth (10th)
     anniversary date of its grant.  Except, however, no ISO
     granted to an Employee who owns more than ten percent (10%) of
     the combined voting power of all classes of stock of the
     Company on the date the Incentive Stock Option is granted
     shall be exercisable later than the fifth (5th) anniversary
     date of its grant.
          6.5  Exercise of Options.  Options granted under
     this Article 6 shall be exercisable at such times and be
     subject to such restrictions and conditions as the Committee
     shall in each instance approve, which need not be the same for
     each grant or for each Participant.
          6.6  Payment.  Options granted under this Article
     6 shall be exercised by the delivery of a written notice of
     exercise to the Company, setting forth the number of Shares
     with respect to which the Option is to be exercised,
     accompanied by full payment for the Shares.
          The Option Price upon exercise of any Option shall
     be payable to the Company in full either: (a) in cash or its
     equivalent, or (b) by tendering previously acquired Shares
     having an aggregate Fair Market Value at the time of exercise
     equal to the total Option Price (provided that the Shares
     which are tendered must have been held by the Participant for
     at least six (6) months prior to their tender to satisfy the
     Option Price), or (c) by a combination of (a) and (b).
          The Committee also may allow cashless exercise as
     permitted under Federal Reserve Board's Regulation T, subject
     to applicable securities law restrictions, or by any other
     means which the Committee determines to be consistent with the
     Plan's purpose and applicable law.
          As soon as practicable after receipt of a written
     notification of exercise and full payment, the Company shall
     deliver to the Participant, in the Participant's name, Share
     certificates in an appropriate amount based upon the number of
     Shares purchased under the Option(s).
          6.7  Restrictions on Share Transferability.  The
     Committee may impose such restrictions on any Shares acquired
     pursuant to the exercise of an Option granted under this
     Article 6 as it may deem advisable, including, without
     limitation, restrictions under applicable Federal securities
     laws, under the requirements of any stock exchange or market
     upon which such Shares are then listed and/or traded, and
     under any blue sky or state securities laws applicable to such
     Shares.
          6.8  Termination of Employment.  Each
     Participant's Option Award Agreement shall set forth the
     extent to which the Participant shall have the right to
     exercise the Option following termination of the Participant's
     employment with the Company and/or its Subsidiaries.  Such
     provisions shall be determined in the sole discretion of the
     Committee, shall be included in the Award Agreement entered
     into with each Participant, need not be uniform among all
     Options issued pursuant to this Article 6, and may reflect
     distinctions based on the reasons for termination of
     employment.
          6.9  Nontransferability of Options.
          (a)  Incentive Stock Options.  No ISO granted under the
                    Plan may be sold, transferred, pledged, assigned,
                    or otherwise alienated or hypothecated, other than
                    by will or by the laws of descent and distribution. 
                    Further, all ISOs granted to a Participant under
                    the Plan shall be exercisable during his or her
                    lifetime only by such Participant.
          (b)  Nonqualified Stock Options.  Except as otherwise
                    provided in a Participant's Award Agreement, no
                    NQSO granted under this Article 6 may be sold,
                    transferred, pledged, assigned, or otherwise
                    alienated or hypothecated, other than by will or by
                    the laws of descent and distribution.  Further,
                    except as otherwise provided in a Participant's
                    Award Agreement, all NQSOs granted to a Participant
                    under this Article 6 shall be exercisable during
                    his or her lifetime only by such Participant.
          6.10 Maximum Amount of Incentive Stock Option Award. 
     The aggregate Fair Market Value (as of the date of grant of an
     Incentive Stock Option) of Shares with respect to which
     Incentive Stock Options granted to an Employee under this Plan
     are exercisable for the first time by an Employee in any
     calendar year shall not exceed one hundred thousand dollars
     ($100,000.00).
     Article 7.  Stock Appreciation Rights
          7.1  Grant of SARs.  Subject to the terms and
     conditions of the Plan, SARs may be granted to Participants at
     any time and from time to time as shall be determined by the
     Committee.  The Committee may grant Freestanding SARs, Tandem
     SARs, or any combination of these forms of SAR.
          The Committee shall have complete discretion in
     determining the number of SARs granted to each Participant
     (subject to Article 4 herein) and, consistent with the
     provisions of the Plan, in determining the terms and
     conditions pertaining to such SARs.
          The grant price of a Freestanding SAR shall equal
     the Fair Market Value of a Share on the date of grant of the
     SAR.  The grant price of Tandem SARs shall equal the Option
     Price of the related Option.
          7.2  Exercise of Tandem SARs.  Tandem SARs may be
     exercised for all or part of the Shares subject to the related
     Option upon the surrender of the right to exercise the
     equivalent portion of the related Option.  A Tandem SAR may be
     exercised only with respect to the Shares for which its
     related Option is then exercisable.
          Notwithstanding any other provision of this Plan
     to the contrary, with respect to a Tandem SAR granted in
     connection with an ISO: (i) the Tandem SAR will expire no
     later than the expiration of the underlying ISO; (ii) the
     value of the payout with respect to the Tandem SAR may be for
     no more than one hundred percent (100%) of the difference
     between the Option Price of the underlying ISO and the Fair
     Market Value of the Shares subject to the underlying ISO at
     the time the Tandem SAR is exercised; and (iii) the Tandem SAR
     may be exercised only when the Fair Market Value of the Shares
     subject to the ISO exceeds the Option Price of the ISO.
          7.3  Exercise of Freestanding SARs.  Freestanding
     SARs may be exercised upon whatever terms and conditions the
     Committee, in its sole discretion, imposes upon them.
          7.4  SAR Agreement.  Each SAR grant shall be
     evidenced by an Award Agreement that shall specify the grant
     price, the term of the SAR, and such other provisions as the
     Committee shall determine.
          7.5  Term of SARs.  The term of an SAR granted
     under the Plan shall be determined by the Committee, in its
     sole discretion; provided, however, that such term shall not
     exceed ten (10) years.
          7.6  Payment of SAR Amount.  Upon exercise of an
     SAR, a Participant shall be entitled to receive payment from
     the Company in an amount determined by multiplying:
          (a)  The difference between the Fair Market Value of a
                    Share on the date of exercise over the grant price;
                    by
          (b)  The number of Shares with respect to which the SAR
                    is exercised.
          At the discretion of the Committee, the payment
     upon SAR exercise may be in cash, in Shares of equivalent
     value, or in some combination thereof.
          7.7  Rule 16b-3 Requirements.  Notwithstanding
     any other provision of the Plan, the Committee may impose such
     conditions on exercise of an SAR (including, without
     limitation, the right of the Committee to limit the time of
     exercise to specified periods) as may be required to satisfy
     the requirements of Section 16 of the Exchange Act (or any
     successor rule).
          7.8  Termination of Employment.  Each SAR Award
     Agreement shall set forth the extent to which the Participant
     shall have the right to exercise the SAR following termination
     of the Participant's employment with the Company and/or its
     Subsidiaries.  Such provisions shall be determined in the sole
     discretion of the Committee, shall be included in the Award
     Agreement entered into with Participants, need not be uniform
     among all SARs issued pursuant to the Plan, and may reflect
     distinctions based on the reasons for termination of
     employment.
          7.9  Nontransferability of SARs.  Except as
     otherwise provided in a Participant's Award Agreement, no SAR
     granted under the Plan may be sold, transferred, pledged,
     assigned, or otherwise alienated or hypothecated, other than
     by will or by the laws of descent and distribution.  Further,
     except as otherwise provided in a Participant's Award
     Agreement, all SARs granted to a Participant under the Plan
     shall be exercisable during his or her lifetime only by such
     Participant.
     Article 8.  Restricted Stock
          8.1  Grant of Restricted Stock.  Subject to the
     terms and provisions of the Plan, the Committee, at any time
     and from time to time, may grant Shares of Restricted Stock to
     Participants in such amounts as the Committee shall determine.
          8.2  Restricted Stock Agreement.  Each Restricted
     Stock grant shall be evidenced by an Award Agreement that
     shall specify the Period(s) of Restriction, the number of
     Shares of Restricted Stock granted, and such other provisions
     as the Committee shall determine.
          8.3  Transferability.  Except as provided in this
     Article 8, the Shares of Restricted Stock granted herein may
     not be sold, transferred, pledged, assigned, or otherwise
     alienated or hypothecated until the end of the applicable
     Period of Restriction established by the Committee and
     specified in the Restricted Stock Award Agreement, or upon
     earlier satisfaction of any other conditions, as specified by
     the Committee in its sole discretion and set forth in the
     Restricted Stock Agreement.  All rights with respect to the
     Restricted Stock granted to a Participant under the Plan shall
     be available during his or her lifetime only to such
     Participant.
          8.4  Other Restrictions.  Subject to Article 11
     herein, the Committee may impose such other conditions and/or
     restrictions on any Shares of Restricted Stock granted
     pursuant to the Plan as it may deem advisable including,
     without limitation, a requirement that Participants pay a
     stipulated purchase price for each Share of Restricted Stock,
     restrictions based upon the achievement of specific
     performance goals (Company-wide, divisional, and/or
     individual), time-based restrictions on vesting following the
     attainment of the performance goals, and/or restrictions under
     applicable Federal or state securities laws.
          The Company shall retain the certificates
     representing Shares of Restricted Stock in the Company's
     possession until such time as all conditions and/or
     restrictions applicable to such Shares have been satisfied.
          Except as otherwise provided in this Article 8,
     Shares of Restricted Stock covered by each Restricted Stock
     grant made under the Plan shall become freely transferable by
     the Participant after the last day of the applicable Period of
     Restriction.
          8.5  Voting Rights.  During the Period of
     Restriction, Participants holding Shares of Restricted Stock
     granted hereunder may exercise full voting rights with respect
     to those Shares.
          8.6  Dividends and Other Distributions.  During
     the Period of Restriction, Participants holding Shares of
     Restricted Stock granted hereunder may be credited with
     regular cash dividends paid with respect to the underlying
     Shares while they are so held.  The Committee may apply any
     restrictions to the dividends that the Committee deems
     appropriate.
          In the event that any dividend constitutes a
     "derivative security" or an "equity security" pursuant to Rule
     16(a) under the Exchange Act, such dividend shall be subject
     to a vesting period equal to the remaining vesting period of
     the Shares of Restricted Stock with respect to which the
     dividend is paid.
          8.7  Termination of Employment.  Each Restricted
     Stock Award Agreement shall set forth the extent to which the
     Participant shall have the right to receive unvested
     Restricted Shares following termination of the Participant's
     employment with the Company and/or its Subsidiaries.  Such
     provisions shall be determined in the sole discretion of the
     Committee, shall be included in the Award Agreement entered
     into with each Participant, need not be uniform among all
     Shares of Restricted Stock issued pursuant to the Plan, and
     may reflect distinctions based on the reasons for termination
     of employment; provided, however that, except in the cases of
     terminations connected with a Change in Control and
     terminations by reason of death or Disability, the vesting of
     Shares of Restricted Stock which qualify for the Performance-Based
     Exception and which are held by Named Executive Officers
     shall occur at the time they otherwise would have, but for the
     employment termination.
     Article 9.  Performance Units and Performance Shares 
          9.1  Grant of Performance Units/Shares.  Subject
     to the terms of the Plan, Performance Units and/or Performance
     Shares may be granted to Participants in such amounts and upon
     such terms, and at any time and from time to time, as shall be
     determined by the Committee.
          9.2  Value of Performance Units/Shares.  Each
     Performance Unit shall have an initial value that is
     established by the Committee at the time of grant.  Each
     Performance Share shall have an initial value equal to the
     Fair Market Value of a Share on the date of grant.  The
     Committee shall set performance goals in its discretion which,
     depending on the extent to which they are met, will determine
     the number and/or value of Performance Units/Shares that will
     be paid out to the Participant.  For purposes of this Article
     9, the time period during which the performance goals must be
     met shall be called a "Performance Period."
          9.3  Earning of Performance Units/Shares. 
     Subject to the terms of this Plan, after the applicable
     Performance Period has ended, the holder of Performance
     Units/Shares shall be entitled to receive payout on the number
     and value of Performance Units/Shares earned by the
     Participant over the Performance Period, to be determined as a
     function of the extent to which the corresponding performance
     goals have been achieved.
          9.4  Form and Timing of Payment of Performance
     Units/ Shares.  Payment of earned Performance Units/Shares
     shall be made in a single lump sum within seventy-five (75)
     calendar days following the close of the applicable
     Performance Period.  Subject to the terms of this Plan, the
     Committee, in its sole discretion, may pay earned Performance
     Units/Shares in the form of cash or in Shares (or in a
     combination thereof) which have an aggregate Fair Market Value
     equal to the value of the earned Performance Units/Shares at
     the close of the applicable Performance Period.  Such Shares
     may be granted subject to any restrictions deemed appropriate
     by the Committee.
          Prior to the beginning of each Performance Period,
     Participants may elect to defer the receipt of Performance
     Unit/Share payout upon such terms as the Committee deems
     appropriate.
          At the discretion of the Committee, Participants
     may be entitled to receive any dividends declared with respect
     to Shares which have been earned in connection with grants of
     Performance Units and/or Performance Shares which have been
     earned, but not yet distributed to Participants (such
     dividends shall be subject to the same accrual, forfeiture,
     and payout restrictions as apply to dividends earned with
     respect to Shares of Restricted Stock, as set forth in Section
     8.6 herein).  In addition, Participants may, at the discretion
     of the Committee, be entitled to exercise their voting rights
     with respect to such Shares.
          9.5  Termination of Employment Due to Death,
     Disability, or Retirement.  In the event the employment of a
     Participant is terminated by reason of death, Disability or
     Retirement during a Performance Period, the participant shall
     receive a prorated payout of the Performance Units/Shares. 
     The prorated payout shall be determined by the Committee, in
     its sole discretion, shall be based upon the length of time
     that the Participant held the Performance Units/Shares during
     the Performance Period, and shall further be adjusted based on
     the achievement of the preestablished performance goals.
          Payment of earned Performance Units/Shares shall
     be made at the same time as payments are made to Participants
     who did not terminate employment during the applicable
     Performance Period.
          9.6  Termination of Employment for Other Reasons. 
     In the event that a Participant's employment terminates for
     any reason other than those reasons set forth in Section 9.5
     herein, all Performance Units/Shares shall be forfeited by the
     Participant to the Company.
          9.7  Nontransferability.  Except as otherwise
     provided in a Participant's Award Agreement, Performance
     Units/Shares may not be sold, transferred, pledged, assigned,
     or otherwise alienated or hypothecated, other than by will or
     by the laws of descent and distribution.  Further, except as
     otherwise provided in a Participant's Award Agreement, a
     Participant's rights under the Plan shall be exercisable
     during the Participant's lifetime only by the Participant or
     the Participant's legal representative.
     Article 10.  Other Incentive Awards
          10.1 Grant of Other Incentive Awards.  Subject to
     the terms and provisions of the Plan, Other Incentive Awards
     may be granted to Participants in such amount, upon such
     terms, and at any time and from time to time as shall be
     determined by the Committee.
          10.2 Other Incentive Award Agreement.  Each Other
     Incentive Award grant shall be evidenced by an Award Agreement
     that shall specify the amount of the Other Incentive Award
     granted, the terms and conditions applicable to such grant,
     the applicable Performance Period and performance goals, and
     such other provisions as the Committee shall determine,
     subject to the terms and provisions of the Plan.
          10.3 Nontransferability.  Except as otherwise
     provided in a Participant's Award Agreement, Other Incentive
     Awards may not be sold, transferred, pledged, assigned, or
     otherwise alienated or hypothecated, other than by will or by
     the laws of descent and distribution.
          10.4 Form and Timing of Payment of Other
     Incentive Awards.  Payment of Other Incentive Awards shall be
     made at such times and in such form, either in cash or in
     Shares (or a combination thereof) as established by the
     Committee subject to the terms of the Plan.  Such Shares may
     be granted subject to any restrictions deemed appropriate by
     the Committee.  Without limiting the generality of the
     foregoing, annual incentive awards may be paid in the form of
     Other Incentive Awards (which may or may not be subject to
     restrictions, at the discretion of the Committee).
     Article 11.  Performance Measures
          Unless and until the Committee proposes for
     shareholder vote and shareholders approve a change in the
     general performance measures set forth in this Article 11, the
     attainment of which may determine the degree of payout and/or
     vesting with respect to Awards to Named Executive Officers
     which are designed to qualify for the Performance-Based
     Exception, the performance measure(s) to be used for purposes
     of such grants shall be chosen from among the following
     alternatives:
          (a)  Return on Assets ("ROA");
          (b)  Cash Flow Return on Investment ("CFROI");
          (c)  Earnings Before Income Taxes ("EBIT"); or
          (d)  Net Earnings.
          The Committee shall have the discretion to adjust
     the determinations of the degree of attainment of the
     preestablished performance goals; provided, however, that
     Awards which are designed to qualify for the Performance Based
     Exception, and which are held by Named Executive Officers, may
     not be adjusted upward (the Committee shall retain the
     discretion to adjust such Awards downward).
          In the event that applicable tax and/or securities
     laws change to permit Committee discretion to alter the
     governing performance measures without obtaining shareholder
     approval of such changes, the Committee shall have sole
     discretion to make such changes without obtaining shareholder
     approval.  In addition, in the event that the Committee
     determines that it is advisable to grant Awards which shall
     not qualify for the Performance-Based Exception, the Committee
     may make such grants without satisfying the requirements of
     Code Section 162(m).
     Article 12.  Beneficiary Designation
          Each Participant under the Plan may from time to
     time, name any beneficiary or beneficiaries (who may be named
     contingently or successively) to whom any benefit under the
     Plan is to be paid in case of his or her death before he or
     she receives any or all of such benefit.  Each such
     designation shall revoke all prior designations by the same
     Participant, shall be in a form prescribed by the Company and
     will be effective only when filed by the Participant in
     writing with the Company, during the Participant's lifetime. 
     In the absence of any such designation, benefits remaining
     unpaid at the Participant's death shall be paid to the
     Participant's estate.
     Article 13.  Deferrals
          The Committee may permit a Participant to defer
     such Participant's receipt of the payment of cash or the
     delivery of Shares that would otherwise be due to such
     Participant by virtue of the exercise of an Option or SAR, the
     lapse or waiver of restrictions with respect to Restricted
     Stock, or the satisfaction of any requirements or goals with
     respect to Performance Units/Shares or Other Incentive Awards. 
     If any such deferral election is required or permitted, the
     Committee shall, in its sole discretion, establish rules and
     procedures for such payment deferrals.
     Article 14.  Rights of Employees
          14.1 Employment.  Nothing in the Plan shall
     interfere with or limit in any way the right of the Company to
     terminate any Participant's employment at any time, nor confer
     upon any Participant any right to continue in the employ of
     the Company.
          For purposes of this Plan, a transfer of a
     Participant's employment between the Company and a Subsidiary
     or between Subsidiaries, shall not be deemed to be a
     termination of employment.  Upon such a transfer, the
     Committee may make such adjustments to outstanding Awards as
     it deems appropriate to reflect the changed reporting
     relationships.
          14.2 Participation.  No Employee shall have the
     right to be selected to receive an Award under this Plan, or,
     having been so selected, to be selected to receive a future
     Award.
     Article 15.  Change in Control
          15.1 Treatment of Outstanding Awards.  Upon the
     occurrence of a Change in Control, unless otherwise
     specifically prohibited under applicable laws, or by the rules
     and regulations of any governing governmental agencies or
     national securities exchanges:
          (a)  Any and all Options and SARs granted hereunder
                    shall become immediately exercisable, and shall
                    remain exercisable throughout their entire term;
          (b)  Any restriction periods and restrictions imposed on
                    Restricted Shares shall lapse;
          (c)  The target payout opportunities attainable under
                    all outstanding Awards of Performance Units and
                    Performance Shares and Other Incentive Awards shall
                    be deemed to have been fully earned for the entire
                    Performance Period(s) as of the effective date of
                    the Change in Control.  The vesting of all such
                    Awards shall be accelerated as of the effective
                    date of the Change in Control, and there shall be
                    paid out in cash to Participants within thirty (30)
                    days following the effective date of the Change in
                    Control a pro rata portion of all targeted Award
                    opportunities associated with such outstanding
                    Awards, based on the number of complete and partial
                    calendar months within the Performance Period which
                    had elapsed as of such effective date; and
          (d)  Subject to Article 16 herein, the Committee shall
                    have the authority to make any modifications to the
                    Awards as determined by the Committee to be
                    appropriate before the effective date of the Change
                    in Control.
          15.2 Termination, Amendment, and Modifications of
     Change-in-Control Provisions.  Notwithstanding any other
     provision of this Plan or any Award Agreement provision, the
     provisions of this Article 15 may not be terminated, amended,
     or modified on or after the date of a Change in Control to
     affect adversely any Award theretofore granted under the Plan
     without the prior written consent of the Participant with
     respect to said Participant's outstanding Awards; provided,
     however, the Board of Directors, upon recommendation of the
     Committee, may terminate, amend, or modify this Article 15 at
     any time and from time to time prior to the date of a Change
     in Control.
     Article 16.  Amendment, Modification, and Termination
          16.1 Amendment, Modification, and Termination. 
     The Board may at any time and from time to time, alter, amend,
     suspend or terminate the Plan in whole or in part; provided,
     however, that no amendment which requires shareholder approval
     in order for the Plan to continue to comply with Rule 16b-3
     under the Exchange Act, including any successor to such Rule,
     shall be effective unless such amendment shall be approved by
     the requisite vote of shareholders of the Company entitled to
     vote thereon.
          The Committee shall not have the authority to
     cancel outstanding Awards and issue substitute Awards in
     replacement thereof.
          16.2 Awards Previously Granted.  No termination,
     amendment, or modification of the Plan shall adversely affect
     in any material way any Award previously granted under the
     Plan, without the written consent of the Participant holding
     such Award.
          16.3 Compliance with Code Section 162(m).  At all
     times when Code Section 162(m) is applicable, all Awards
     granted under this Plan shall comply with the requirements of
     Code Section 162(m); provided, however, that in the event the
     Committee determines that such compliance is not desired with
     respect to any Award or Awards available for grant under the
     Plan, then compliance with Code Section 162(m) will not be
     required.  In addition, in the event that changes are made to
     Code Section 162(m) to permit greater flexibility with respect
     to any Award or Awards available under the Plan, the Committee
     may, subject to this Article 16, make any adjustments it deems
     appropriate.
     Article 17.  Withholding
          17.1 Tax Withholding.  The Company shall have the
     power and the right to deduct or withhold, or require a
     Participant to remit to the Company, an amount sufficient to
     satisfy Federal, state, and local taxes, domestic or foreign,
     required by law or regulation to be withheld with respect to
     any taxable event arising as a result of this Plan.
          17.2 Share Withholding.  With respect to
     withholding required upon the exercise of Options or SARs,
     upon the lapse of restrictions on Restricted Stock, or upon
     any other taxable event arising as a result of Awards granted
     hereunder, Participants may elect, subject to the approval of
     the Committee, to satisfy the withholding requirement, in
     whole or in part, by having the Company withhold Shares having
     a Fair Market Value on the date the tax is to be determined
     equal to the minimum statutory total tax which could be
     imposed on the transaction.  All such elections shall be
     irrevocable, made in writing, signed by the Participant, and
     shall be subject to any restrictions or limitations that the
     Committee, in its sole discretion, deems appropriate.
     Article 18.  Financial Assistance
          If the Committee determines that such action is
     advisable, the Company may assist any person to whom an Award
     has been granted in obtaining financing from the Company (or
     under any program of the Company approved pursuant to
     applicable law), or from a bank or other third party on such
     terms as are determined by the Committee, and in such amount
     as is required to accomplish the purposes of the Plan,
     including, but not limited to, to permit the exercise of an
     Award, the participation therein, and/or the payment of any
     taxes in respect thereof.  Such assistance may take any form
     that the Committee deems appropriate, including, but not
     limited to, a direct loan from the Company, a guarantee of the
     obligation by the Company, or the maintenance by the Company
     of deposits with such bank or third party.
     Article 19.  Indemnification
          Each person who is or shall have been a member of
     the Committee, or of the Board, shall be indemnified and held
     harmless by the Company against and from any loss, cost,
     liability or expense that may be imposed upon or reasonably
     incurred by him or her in connection with or resulting from
     any claim, action, suit, or proceeding to which he or she may
     be a party or in which he or she may be involved by reason of
     any action taken or failure to act under the Plan and against
     and from any and all amounts paid by him or her in settlement
     thereof, with the Company's approval, or paid by him or her in
     satisfaction of any judgment in any such action, suit, or
     proceeding against him or her, provided he or she shall give
     the Company an opportunity at its own expense, to handle and
     defend the same before he or she undertakes to handle and
     defend it on his or her own behalf.  The foregoing right of
     indemnification shall not be exclusive of any other rights of
     indemnification to which such persons may be entitled under
     the Company's Articles of Incorporation of Bylaws, as a matter
     of law, or otherwise, or any power that the Company may have
     to indemnify them or hold them harmless.
     Article 20.  Successors
          All obligations of the Company under the Plan with
     respect to Awards granted hereunder shall be binding on any
     successor to the Company, whether the existence of such
     successor is the result of a direct or indirect purchase,
     merger, consolidation, or otherwise, of all or substantially
     all of the business and/or assets of the Company.
     Article 21.  Legal Construction
          21.1 Gender and Number.  Except where otherwise
     indicated by the context, any masculine term used herein also
     shall include the feminine; the plural shall include the
     singular and the singular shall include the plural.
          21.2 Severability.  In the event any provision of
     the Plan shall be held illegal or invalid for any reason, the
     illegality or invalidity shall not affect the remaining parts
     of the Plan, and the Plan shall be construed and enforced as
     if the illegal or invalid provision had not been included.
          21.3 Requirements of Law.  The granting of Awards
     and the issuance of Shares under the Plan shall be subject to
     all applicable laws, rules, and regulations, and to such
     approvals by any governmental agencies or national securities
     exchanges as may be required.
          21.4 Securities Law and Tax Law Compliance.  With
     respect to Insiders, transactions under this Plan are intended
     to comply with all applicable conditions or Rule 16b-3 or its
     successors under the 1934 Act and Code Section 162(m).  To the
     extent any provision of the plan or action by the Committee
     fails to so comply it shall be deemed null and void, to the
     extent permitted by law and deemed advisable by the Committee.
          21.5 Stockholder Adoption.  This Plan shall be
     submitted to the stockholders of the Company, for their
     approval and adoption in accordance with applicable law and
     Rule 16b-3 under the Exchange Act and Code Section 162(m). 
     All Awards made hereunder prior to stockholder approval shall
     be granted contingent upon such approval.  If this Plan is not
     so approved and adopted by stockholders, all Awards granted
     hereunder shall be null and void.
          21.6 Governing Law.  To the extent not preempted
     by Federal law, the Plan, and all agreements hereunder, shall
     be construed in accordance with and governed by the laws of
     the State of Delaware.
HOGAN & HARTSON
L.L.P.

          ONE TABOR CENTER
          1200 SEVENTEENTH STREET, SUITE 1500
          DENVER, COLORADO  80202
          TEL (303) 899-7300
          FAX (303) 899-7333
June 21, 1995

Katy Industries, Inc.
6300 S. Syracuse Way, Suite 300
Englewood, Colorado  80111

          Re:  Registration Statement on Form S-8

Dear Gentlemen:

          We have acted as special counsel to Katy Industries,
Inc., a Delaware corporation (the "Company") in connection with
the preparation of the Form S-8 Registration Statement of the
Company filed with the Securities and Exchange Commission (the
"Registration Statement"), with respect to the registration of
500,000 shares of the Company's Common Stock, $1.00 par value
per share (the "Shares") issuable pursuant to the Katy
Industries, Inc. Long-Term Incentive Plan (the "Plan").
          In connection with this opinion, we have made such
inquiries, examined such documents and corporate records and
relied upon such certificates of officers of the Company and
public officials as we have considered necessary or appropriate
for purposes of giving the opinions hereinafter set forth.  We
have assumed the genuineness and authenticity of all signatures
on original documents, the authenticity of all documents
submitted to us as originals and the conformity to originals of
all documents submitted to us as copies thereof.
          On the basis of the foregoing and subject to the
assumptions, qualifications, limitations and exceptions set
forth herein, we are of the opinion that, assuming the
Registration Statement shall have become effective pursuant to
the provisions of the Securities Act of 1933, as amended, the
Shares being offered under the Plan have been duly authorized
and, when duly issued in accordance with the Registration
Statement and the terms of the Plan and any agreement,
resolution or other instrument governing such issuance, the
Shares so issued will be validly issued, fully paid and
nonassessable.

     We assume no obligation to advise you of any changes in the foregoing 
subsequent to the delivery of this opinion letter.  This opinion letter
has been prepared solely for your use in connection with the filing of
the Registration Statement on the date of this opinion letter and should 
not be quoted in whole or in part or otherwise be referred to, nor filed
with or furnished to any governmental agency or other person or entity,
without the prior written consent of this firm.

     We hereby consent to the filing of this opinion letter as Exhibit
5.1 to the Registration Statement.

                                   Very truly yours,

                                   Hogan & Hartson
                                   
BLR/sbo
INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this
Registration Statement on Form S-8 of Katy Industries, Inc. of
our reports dated February 24, 1995 (March 14, 1995 as to Note
15) appearing in the Annual Report on Form 10-K of Katy
Industries, Inc. for the year ended December 31, 1994.

DELOITTE & TOUCHE LLP
Chicago, Illinois
June 21, 1995