Compensation and Benefits
Assurance Agreement
Katy Industries, Inc.
(Effective January 1, 1996)
Contents
Page
Section 1. Terms of Agreement 1
Section 2. Severance Benefits 2
Section 3. Rabbi Trust and Change-in-Control
Payments 7
Section 4. Excise Tax 8
Section 5. Successors and Assignments 9
Section 6. Miscellaneous 10
Section 7. Contractual Rights and Legal
Remedies 10
Compensation and Benefits Assurance Agreement
This COMPENSATION AND BENEFITS ASSURANCE AGREEMENT
(this "Agreement") is made, entered into, and is
effective as of this first day of January 1996 (the
"Effective Date") by and between Katy Industries, Inc.
(hereinafter referred to as the "Company") and
___________________________ (hereinafter referred to as
the "Executive").
WHEREAS, the Executive is presently employed by the
Company in a key management capacity; and
WHEREAS, the Executive possesses considerable
experience and knowledge of the business and affairs of
the Company concerning its policies, methods,
personnel, and operations; and
WHEREAS, the Company is desirous of assuring the
continued employment of the Executive in a key
management capacity, and the Executive is desirous of
having such assurances.
NOW THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements of the parties
set forth in this Agreement, and of other good and
valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
Section 1. Term of Agreement.
This Agreement will commence on the Effective Date
and shall continue in effect for two full calendar
years (through December 31, 1997) (the "Initial Term").
The Initial Term of this Agreement automatically
shall be extended for two additional years at the end
of the Initial Term, and then again after each
successive two-year period thereafter (each such two-year period
following the Initial Term a "Successive
Period"). However, either party may terminate this
Agreement at the end of the Initial Term, or at the end
of any Successive Period thereafter, by giving the
other party written notice of intent not to renew,
delivered at least six (6) months prior to the end of
such Initial Term or Successive Period. If such notice
is properly delivered by either party, this Agreement,
along with all corresponding rights, duties, and
covenants shall automatically expire at the end of the
Initial Term or Successive Period then in progress.
In the event that a "Change in Control" of the
Company occurs (as such term is hereinafter defined)
during the Initial Term or any Successive Period, upon
the effective date of such Change in Control, the term
of this Agreement shall automatically and irrevocably
be renewed for a period of twenty-four (24) full
calendar months from the effective date of such Change
in Control. This Agreement shall thereafter
automatically terminate following the twenty-four (24)
month Change-in-Control renewal period. Further, this
Agreement shall be assigned to, and shall be assumed by
the purchaser in such Change in Control, as further
provided in Section 5 herein.
Section 2. Severance Benefits
2.1. Right to Severance Benefits. The Executive
shall be entitled to receive from the Company Severance
Benefits as described in Paragraph 2.3 herein, if
during the term of this Agreement there has been a
Change in Control of the Company (as defined in
Paragraph 2.4 herein) and if, within twenty-four (24)
calendar months immediately thereafter, the Executive's
employment with the Company shall end for any reason
specified in Paragraph 2.2 herein as being a Qualifying
Termination. The Severance Benefits described in
Paragraphs 2.3(a), 2.3(b), 2.3(c), and 2.3(d) herein
shall be paid in cash to the Executive in a single lump
sum as soon as practicable following the Qualifying
Termination, but in no event later than thirty (30)
calendar days from such date. Notwithstanding the
foregoing, Severance Benefits which become due pursuant
to Paragraphs 2.2(c) and 5.1 shall be paid immediately.
The Severance Benefits described in
Paragraphs 2.3(a), 2.3(b), 2.3(c), and 2.3(d) herein
shall be paid out of the general assets of the Company.
To the extent the Company pays such amounts out of its
general assets, the Company shall be entitled to a
payment from the Rabbi Trust established pursuant to
Paragraph 3.1 herein, in accordance with the terms of
such Rabbi Trust. In the event that the Executive does
not receive the Severance Benefits due hereunder from
the Company within thirty (30) days of his Qualifying
Termination, the Executive may provide written notice
to the Trustee of the Rabbi Trust of the amount due
hereunder and the Trustee shall pay such amount in
accordance with the terms of the Rabbi Trust.
2.2. Qualifying Termination. The occurrence of any
one or more of the following events (i.e., a
"Qualifying Termination") within twenty-four (24)
calendar months immediately following a Change in
Control of the Company shall trigger the payment of
Severance Benefits to the Executive, as such benefits
are described under Paragraph 2.3 herein:
(a) The Company's involuntary termination of the
Executive's employment without Cause (as such term is
defined in Paragraph 2.6 herein);
(b) The Executive's voluntary termination of
employment for Good Reason (as such term is defined in
Paragraph 2.5 herein); and
(c) The Company, or any successor company, commits
a material breach of any of the provisions of this
Agreement.
A Qualifying Termination shall not include a
termination of the Executive's employment within
twenty-four (24) calendar months after a Change in
Control by reason of death, Disability (as such term is
defined under the Company's governing disability plan,
or any successor plan thereto), the Executive's
voluntary termination without Good Reason, or the
Company's involuntary termination of the Executive's
employment for Cause.
2.3. Description of Severance Benefits. In the event
that the Executive becomes entitled to receive
Severance Benefits, as provided in Paragraphs 2.1 and
2.2 herein, the Company shall pay to the Executive and
provide the Executive with the following:
(a) A lump-sum cash amount equal to the Executive's
unpaid Base Salary (as such term is defined in
Paragraph 2.7 herein), accrued vacation pay,
unreimbursed business expenses, and all other items
earned by and owed to the Executive through and
including the date of the Qualifying Termination. Such
payment shall constitute full satisfaction for these
amounts owed to the Executive.
(b) A lump-sum cash amount equal to two (2)
multiplied by the Executive's annual rate of Base
Salary in effect upon the date of the Qualifying
Termination or, if greater, by the Executive's annual
rate of Base Salary in effect immediately prior to the
occurrence of the Change in Control.
(c) A lump-sum cash amount equal to the greater of
(i) the Executive's then-current target bonus
opportunity (stated in terms of a percentage of Base
Salary) established under the Katy Industries, Inc.
Annual Bonus Plan (or any successor plan thereto) for
the bonus plan year in which the Executive's date of
Qualifying Termination occurs, adjusted on a pro rata
basis based on the number of days the Executive was
actually employed during such bonus plan year (but in
no event shall such target bonus be less than that in
effect for the period immediately prior to the
occurrence of the Change in Control); or (ii) the
actual bonus earned through the date of the Qualifying
Termination, based on the then-current level of goal
achievement. Such payment shall constitute full
satisfaction for these amounts owed to the Executive.
(d) A lump-sum cash amount equal to the sum of (i)
two (2) multiplied by the maximum possible estimated
Company match of the Executive's contributions to the
Company's 401(k) savings plan as of the date the
Executive's Qualifying Termination occurs; and (ii) the
not yet vested Company contributions (with interest
thereon up to the date of payment) credited to the
Executive's account under the Company's 401(k) plan
measured as of the date of the Executive's Qualifying
Termination. Provided, however, that the source of
payment of this sum shall be the general assets of the
Company unless the payment of such amounts is otherwise
permissible from the corresponding qualified plan trust
without violating any governmental regulations or
statutes. Such payment shall constitute full
satisfaction for these amounts owed to the Executive.
(e) At the exact same cost to the Executive, and at
the same coverage level as in effect as of the
Executive's date of the Qualifying Termination (subject
to changes in coverage levels applicable to all
employees generally), a continuation of the Executive's
(and the Executive's eligible dependents') health
insurance coverage for twenty-four (24) months from the
date of the Qualifying Termination. The applicable
COBRA health insurance benefit continuation period
shall begin at the end of this twenty-four (24) month
benefit continuation period.
The providing of these health insurance benefits
by the Company shall be discontinued prior to the
end of the twenty-four (24) month continuation
period to the extent that the Executive becomes
covered under the health insurance coverage of a
subsequent employer which does not contain any
exclusion or limitation with respect to any
preexisting condition of the Executive or the
Executive's eligible dependents. For purposes of
enforcing this offset provision, the Executive
shall have a duty to inform the Company as to the
terms and conditions of any subsequent employment
and the corresponding benefits earned from such
employment. The Executive shall provide, or cause
to provide, to the Company in writing correct,
complete, and timely information concerning the
same.
(f) The Executive shall be entitled, at the expense
of the Company, to receive standard outplacement
services from a nationally recognized outplacement firm
of the Executive's selection, for a period of up to two
(2) years from the Executive's date of Qualifying
Termination. However, such services shall be at the
Company's expense to a maximum amount not to exceed
twenty-five percent (25%) of the Executive's annual
rate of Base Salary as of the date of the Qualifying
Termination.
2.4. Definition of "Change in Control." "Change in
Control" of the Company means, and shall be deemed to
have occurred upon, the first to occur of 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 of 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 the
Executive, if the Executive is part of a purchasing
group which consummates the Change-in-Control
transaction. The Executive shall be deemed "part of
a purchasing group" for purposes of the preceding
sentence if the Executive 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).
2.5. Definition of "Good Reason." "Good Reason"
shall be determined by the Executive, in the exercise
of good faith and reasonable judgment, and shall mean,
without the Executive's express written consent, the
occurrence of any one or more of the following within
two (2) years immediately following a Change in
Control:
(i) The assignment of the Executive to duties
inconsistent with the Executive's authorities,
duties, responsibilities, and status as an
officer of the Company, or a reduction or
alteration in the nature or status of the
Executive's authorities, duties, or
responsibilities, from those in effect as of
ninety (90) calendar days prior to the Change
in Control, other than an insubstantial and
inadvertent act that is remedied by the
Company promptly after receipt of notice
thereof given by the Executive;
(ii) The Company's requiring the Executive to be based
at a location in excess of fifty (50) miles
from the location of the Executive's principal
job location or office immediately prior to the
Change in Control; except for required
travel on the Company's business to an
extent consistent with the Executive's then
present business travel obligations;
(iii) A reduction by the Company of the Executive's
Base Salary in effect on the Effective Date,
or as the same shall be increased from time to
time;
(iv) The failure of the Company to keep in effect any
of the Company's compensation, health and
welfare benefits, or perquisite programs
under which the Executive receives value,
as such program exists
immediately prior to the Change in Control.
However, the replacement of an existing program
with a new program will be permissible (and not
grounds for a Good Reason termination) if done
for all employees generally and the value to be
delivered to the Executive under the new
program is at least as great as the value
delivered to the Executive under the existing
programs; or
(v) Any breach by the Company of its obligations
under Section 5 of this Agreement or any
failure of a successor company to assume and
agree to perform the Company's entire
obligations under this Agreement, as
required by Section 5 herein.
The Executive's right to terminate employment for
Good Reason shall not be affected by the
Executive's incapacity due to physical or
mental illness. The Executive's continued
employment shall not constitute consent to,
or a waiver of rights with respect to, any
circumstance constituting Good Reason herein.
2.6. Definition of "Cause." "Cause" shall be
determined by the Administrative Committee, in the
exercise of good faith and reasonable judgment, and
shall mean the occurrence of any one or more of the
following:
(a) A demonstrably willful and deliberate act or
failure to act by the Executive (other than as a
result of incapacity due to physical or mental
illness) which is committed in bad faith, without
reasonable belief that such action or inaction is
in the best interests of the Company, which
causes actual material financial injury to the
Company and which act or inaction is not remedied
within fifteen (15) business days of written
notice from the Company; or
(b) The Executive's conviction for committing an act
of fraud, embezzlement, theft, or any other act
constituting a felony involving moral turpitude
or causing material harm, financial or otherwise,
to the Company.
2.7. Other Defined Terms. The following terms shall
have the meanings set forth below:
(a) "Base Salary" means, at any time, the then-regular
annual rate of pay which the Executive is
receiving as annual salary, excluding amounts (i)
designated by the Company as payment toward
reimbursement of expenses; or (ii) received under
incentive or other bonus plans, regardless of
whether or not the amounts are deferred.
(b) "Beneficial Owner" shall have the meaning
ascribed to such term in Rule 13d-3 of the
General Rules and Regulations under the Exchange
Act (as such term is defined below).
(c) "Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, or any
successor act thereto.
(d) "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.
Section 3. Rabbi Trust and Change-in-Control Payments
3.1. Establishment of a Rabbi Trust. As soon as
administratively possible following the Effective Date,
the Company shall establish an irrevocable Rabbi Trust,
governed by this Agreement (which shall be a grantor
trust within the meaning of Internal Revenue Code
Sections 671-678) for the benefit of the Executive,
other executives covered by a similar agreement, and
their beneficiaries, as appropriate. The Rabbi Trust
shall have an independent Trustee (such Trustee to have
a fiduciary duty to carry out the terms and conditions
of the Trust) as selected by the Company, and shall
have restrictions as to the Company's ability to amend
the Trust or to cancel benefits provided thereunder.
Assets contained in the Rabbi Trust shall at all
times be specifically subject to the claims of the
Company's general creditors in the event of bankruptcy
or insolvency; such terms shall be specifically defined
within the provisions of the Rabbi Trust, along with a
required procedure for notifying the Trustee of any
such bankruptcy or insolvency.
3.2. Funding of Rabbi Trust. As soon as practicable
following a Change in Control, but in no event later
than thirty (30) calendar days from such date, the
Company shall fund the Rabbi Trust in an amount
(without regard to any contributions made to the Rabbi
Trust pursuant to other severance agreements between
the Company and any other executives of the Company)
equal to the sum of (a) the Severance Benefits
described in Paragraphs 2.3(a), 2.3(b), 2.3(c), and
2.3(d) herein, calculated as if the Executive's
Qualifying Termination occurred on the effective date
of the Change in Control; (b) the estimated Gross-Up
Payment (as such term is defined in Paragraph 4.1
herein), calculated as if the Executive's Qualifying
Termination occurred on the effective date of the
Change in Control and as if the Executive were taxed at
the highest marginal state and federal income and
employment tax rates; and (c) one hundred thousand
dollars ($100,000) for potential legal fees incurred by
the Executive in enforcing his rights under this
Agreement.
Section 4. Excise Tax
4.1. Excise Tax Payment. If any portion of the
Severance Benefits or any other payment under this
Agreement, or under any other agreement with, or plan
of the Company, including but not limited to stock
options and other long-term incentives (in the
aggregate "Total Payments") would constitute an "excess
parachute payment," such that a golden parachute excise
tax is due, the Company shall provide to the Executive,
in cash, an additional payment in an amount to cover
the full cost of any excise tax and the Executive's
state and federal income and employment taxes on this
additional payment (cumulatively, the "Gross-Up
Payment"). For this purpose, the Executive shall be
deemed to be in the highest marginal rate of federal
and state taxes. This payment shall be made as soon as
possible following the date of the Executive's
Qualifying Termination, but in no event later than
thirty (30) calendar days of such date.
The Gross-Up Payment described herein shall be paid
out of the general assets of the Company. To the extent
the Company pays such amount out of its general assets,
the Company shall be entitled to a payment from the
Rabbi Trust established pursuant to Paragraph 3.1
herein, in accordance with the terms of such Rabbi
Trust. In the event that the Executive does not receive
the Gross-Up Payments due hereunder from the Company
within thirty (30) days of his Qualifying Termination,
the Executive may provide written notice to the Trustee
of the Rabbi Trust of the amount due hereunder and the
Trustee shall pay such amount in accordance with the
terms of the Rabbi Trust.
For purposes of this Agreement, the term "excess
parachute payment" shall have the meaning assigned to
such term in Section 280G of the Internal Revenue Code,
as amended (the "Code"), and the term "excise tax"
shall mean the tax imposed on such excess parachute
payment pursuant to Sections 280G and 4999 of the Code.
4.2. Subsequent Recalculation. In the event the
Internal Revenue Service subsequently adjusts the
excise tax computation herein described, the Company
shall reimburse the Executive for the full amount
necessary to make the Executive whole on an after-tax
basis (less any amounts received by the Executive that
the Executive would not have received had the
computations initially been computed as subsequently
adjusted), including the value of any underpaid excise
tax, and any related interest and/or penalties due to
the Internal Revenue Service.
Section 5. Successors and Assignments
5.1. Successors. The Company will require any
successor (whether via a Change in Control, direct or
indirect, by purchase, merger, consolidation, or
otherwise) of the Company to expressly assume and agree
to perform the obligations under this Agreement in the
same manner and to the same extent that the Company
would be required to perform it if no such succession
had taken place.
Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such
succession shall, as of the date immediately preceding
the date of a Change in Control, automatically give the
Executive Good Reason to collect, immediately, full
benefits hereunder as a Qualifying Termination.
5.2. Assignment by Executive. This Agreement shall
inure to the benefit of and be enforceable by the
Executive's personal or legal representatives,
executors, administrators, successors, heirs,
distributees, devisees, and legatees. If an Executive
should die while any amount is still payable to the
Executive hereunder had the Executive continued to
live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of
this Agreement, to the Executive's devisee, legatee, or
other designee, or if there is no such designee, to the
Executive's estate.
An Executive's rights hereunder shall not otherwise
be assignable.
Section 6. Miscellaneous
6.1.Administration. This Agreement shall be
administered by the Board of Directors of the Company,
or by a Committee of the Board designated by the Board
(the "Administrative Committee"). The Administrative
Committee (with the approval of the Board, if the Board
is not the Administrative Committee) is authorized to
interpret this Agreement, to prescribe and rescind
rules and regulations, and to make all other
determinations necessary or advisable for the
administration of this Agreement.
In fulfilling its administrative duties hereunder,
the Administrative Committee may rely on outside
counsel, independent accountants, or other consultants
to render advice or assistance.
6.2. Notices. Any notice required to be delivered
to the Company or the Administrative Committee by the
Executive hereunder shall be properly delivered to the
Company when personally delivered to (including by a
reputable overnight courier), or actually received
through the U.S. mail, postage prepaid, by:
Katy Industries, Inc.
6300 South Syracuse Way, Suite 300
Englewood, CO 80111
Attn: President
Any notice required to be delivered to the Executive
by the Company or the Administrative Committee
hereunder shall be properly delivered to the Executive
when personally delivered to (including by a reputable
overnight courier), or actually received through the
U.S. mail, postage prepaid, by, the Executive at his
last known address as reflected on the books and
records of the Company.
Section 7. Contractual Rights and Legal Remedies
7.1. Contractual Rights to Benefits. This Agreement
establishes in the Executive a right to the benefits to
which the Executive is entitled hereunder. However,
except as expressly stated herein, nothing herein
contained shall require or be deemed to require, or
prohibit or be deemed to prohibit, the Company to
segregate, earmark, or otherwise set aside any funds or
other assets, in trust or otherwise, to provide for any
payments to be made or required hereunder.
7.2. Legal Fees and Expenses. The Company shall pay
all legal fees, costs of litigation, prejudgment
interest, and other expenses which are incurred in good
faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the
Executive becomes entitled under this Agreement, or as
a result of the Company's (or any third party's)
contesting the validity, enforceability, or
interpretation of the Agreement, or as a result of any
conflict between the parties pertaining to this
Agreement. Such payment shall be made from the funds
earmarked for such purpose in the trust fund described
in Paragraph 3.1 hereto and, to the extent such fees
and expenses exceed such earmarked amount, the Company
shall pay such fees and expenses from the general
assets of the Company.
7.3. Arbitration. The Executive shall have the
right and option to elect (in lieu of litigation) to
have any dispute or controversy arising under or in
connection with this Agreement settled by arbitration,
conducted before a panel of three (3) arbitrators
sitting in a location selected by the Executive within
fifty (50) miles from the location of his or her job
with the Company, in accordance with the rules of the
American Arbitration Association then in effect. The
Executive's election to arbitrate, as herein provided,
and the decision of the arbitrators in that proceeding,
shall be binding on the Company and the Executive.
Judgment may be entered on the award of the
arbitrator in any court having jurisdiction. All
expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be
borne by the Company.
7.4. Unfunded Agreement. This Agreement is intended
to be an unfunded general asset promise for a select,
highly compensated member of the Company's management
and, therefore, is intended to be exempt from the
substantive provisions of the Employee Retirement
Income Security Act of 1974 as amended.
7.5. Exclusivity of Benefits. Unless specifically
provided herein, neither the provisions of this
Agreement nor the benefits provided hereunder shall
reduce any amounts otherwise payable, or in any way
diminish the Executive's rights as an employee of the
Company, whether existing now or hereafter, under any
compensation and/or benefit plans, programs, policies,
or practices provided by the Company, for which the
Executive may qualify.
Vested benefits or other amounts which the Executive
is otherwise entitled to receive under any plan,
policy, practice, or program of the Company (i.e.,
including, but not limited to, vested benefits under
the Company's 401(k) plan), at or subsequent to the
Executive's date of Qualifying Termination shall be
payable in accordance with such plan, policy, practice,
or program except as expressly modified by this
Agreement.
7.6. Includable Compensation. Severance Benefits
provided hereunder shall not be considered "includable
compensation" for purposes of determining the
Executive's benefits under any other plan or program of
the Company.
7.7. Employment Status. Nothing herein contained
shall be deemed to create an employment agreement
between the Company and the Executive, providing for
the employment of the Executive by the Company for any
fixed period of time. The Executive's employment with
the Company is terminable at will by the Company or the
Executive and each shall have the right to terminate
the Executive's employment with the Company at any
time, with or without Cause, subject to the Company's
obligation to provide Severance Benefits as required
hereunder.
In no event shall the Executive be obligated to seek
other employment or take any other action by way of
mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement, nor
shall the amount of any payment hereunder be reduced by
any compensation earned by the Executive as a result of
employment by another employer, other than as provided
in Paragraph 2.3(e) herein.
7.8. Entire Agreement. This Agreement represents
the entire agreement between the parties with respect
to the subject matter hereof, and supersedes all prior
discussions, negotiations, and agreements concerning
the subject matter hereof, including, but not limited
to, any prior severance agreement made between the
Executive and the Company.
7.9. Tax Withholding. The Company shall withhold
from any amounts payable under this Agreement all
federal, state, city, or other taxes as legally
required to be withheld.
7.10. Waiver of Rights. Except as otherwise provided
herein, the Executive's acceptance of Severance
Benefits, the Gross-Up Payment (if applicable), and any
other payments required hereunder shall be deemed to be
a waiver of all rights and claims of the Executive
against the Company pertaining to any matters arising
under this Agreement.
7.11. Severability. In the event any provision of the
Agreement shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect
the remaining parts of the Agreement, and the Agreement
shall be construed and enforced as if the illegal or
invalid provision had not been included.
7.12. Applicable Law. To the extent not preempted by
the laws of the United States, the laws of the State of
Delaware shall be the controlling law in all matters
relating to this Agreement.
IN WITNESS WHEREOF, the Company has executed this
Agreement, to be effective as of the day and year first
written above.
ATTEST: Katy Industries, Inc.
By: ______________________ By:______________________
Secretary Title: _________________
_______________________ Executive