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Exhibit 10.1
 

Katy Industries, Inc.
305 Rock Industrial Park Drive
Bridgeton, MO 63044

March 31, 2009

Mr. Robert D. Redmond
619 Oswego Dr.
Gibsonia, PA  15044

Dear Dan:

On behalf of Katy Industries, Inc. (“Katy” or the “Company”) I am pleased to
extend to you this offer of employment on the following terms and conditions:

Title.  Vice President – Operations.

Salary.  Annual salary of $240,000, subject to annual review by the Compensation
Committee of the Board (as defined below).

Annual Bonus.  Target annual bonus equal to 50% of salary, subject to
achievement of the performance targets and other provisions of the Company’s
management incentive plan (the “Bonus Plan”).  In addition to your target annual
bonus, you will have the opportunity to receive a supplemental bonus for
performance materially in excess of annual financial targets, at the discretion
of the Compensation Committee of the Board.  Any bonus due to you under this
section in respect of a calendar year shall be paid to you as soon as
practicable after the end of such calendar year (the Company will endeavor to
pay the bonus not later than April 1 of the year following the year in which the
bonus was earned, but in all events will pay the bonus not later than December
31 of the year following the year in which the bonus was earned).

Severance.  If you are involuntarily terminated other than for “Cause” the
Company will continue to pay your regular base salary for a period of six
months. “Cause” will be defined as (i) willful failure to perform, or gross
negligence in the performance of, your material duties and responsibilities to
the Company and its affiliates; (ii) commission of a material act of fraud or
embezzlement or any material dishonesty with regard to the Company or any of its
affiliates; or (iii) conviction of, or plea of nolo contendere to, a felony or
other crime involving moral turpitude.
 
 
 

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Mr. Robert D. Redmond
Page 2
March 31, 2009
 
 
Common Stock Options.  You will be granted options to purchase 125,000 shares of
the Company’s common stock.  Options granted will be exercisable at the price of
the Company’s shares on the Over-the-Counter Bulletin Board (“OTC BB”) at the
time the option grant is finalized (currently approximately $.75 per share) but
not less than $1.00.  Options will vest in three equal annual installments on
the first, second, and third anniversaries of your Employment Date, subject to
your continued employment with the Company.  Options will have a maximum
exercise period of ten years from the date of the initial grant, and will be
subject to accelerated vesting in the event of a Change in Control.  To the
extent that your employment is terminated without “Cause” (as defined), you
would be entitled to exercise your vested options during some limited time
period, while your unvested options would be canceled.

Medical Benefits.  The Company will provide you with a comprehensive medical
benefits package consistent with its established policies.

Transfer Package:  The company will provide moving expense reimbursement per the
attached policy.

Other Benefits.  You will be given a onetime signing bonus of $5,000.00.  You
shall be entitled to four (4) weeks of vacation per annum, to be taken at such
times and intervals as you shall determine, subject to the reasonable business
needs of the Company.  The Company will provide you with an automobile allowance
of $600 per month.

Confidential Information.  You will comply with the policies and procedures of
the Company and its affiliates for protecting non-public or confidential
information of the Company and its affiliates and shall not disclose any such
information to any person (except as required by applicable law or for the good
faith performance of your duties and responsibilities to the Company and its
affiliates), or use any such information for your own benefit or gain.  You
agree that this restriction shall continue to apply after your employment
terminates, regardless of the reason for such termination.

Non-Competition.  While you are employed by the Company and for six months (or,
if your termination of employment occurs as a result of or within six months
following a Change in Control, twelve months) following termination of your
employment for any reason, you shall not, directly or indirectly, whether as
owner, partner, investor, consultant, agent, employee, co-venturer or otherwise,
compete with the Company or any of its affiliates or undertake any planning for
any business competitive with the Company or any of its affiliates within the
United States.  Prohibited activity includes without limitation accepting
employment or a consulting position with any person who is, or at any time
within twelve months prior to termination of your employment has been, a
customer of the Company or any of its affiliates.  You further agree that, in
the event that any provision of this section shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its being extended over
too great a time, too large a geographic area or too great a range of
activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
 
 
 

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Mr. Robert D. Redmond
Page 3
March 31, 2009

 
Non-Solicitation.  You agree that while you are employed by the Company and for
six months (or, if your termination of employment occurs as a result of or
within six months following a Change in Control, twelve months) following
termination of your employment for any reason, you will not (i) hire or attempt
to hire any employee of the Company or any of its affiliates; (ii) assist in
such hiring by any person; (iii) encourage any such employee to terminate his or
her relationship with the Company or any of its affiliates; (iv) solicit or
encourage any customer or vendor of the Company or any of its affiliates to
terminate its relationship with them; or (v) in the case of a customer, to
conduct with any person any business or activity which such customer conducts or
could conduct with the Company or any of its affiliates.  You further agree
that, in the event that any provision of this section shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.

Employment Date.   Your target employment date will be April 13, 2009.  This
offer is contingent on the passing of a criminal background check and drug
screen.

[Remainder of page intentionally left blank]

 
 

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Mr. Robert D. Redmond
Page 4
March 31, 2009

If you are in agreement with the contents of this letter agreement, please
execute it in the space provided below and return one copy to me, retaining a
copy for your files.  If you have any questions or comments, please do not
hesitate to contact me.  We look forward to working with you to build value for
all of Katy’s shareholders.

Sincerely,

/s/ David J. Feldman

David J. Feldman
President & CEO

cc: Christopher Lacovara
Christopher Anderson
Pat Carroll

Agreed and accepted:

/s/ Robert D. Redmond       
Robert D. Redmond   Date

 
 
 

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