SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
June 28, 2001
(Date of report (date of earliest event reported))
KATY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-5558 75-1277589
(State or other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
6300 S. SYRACUSE WAY, SUITE 300
ENGLEWOOD, COLORADO 80111
(Address and Zip Code of Principal Executive Offices)
(303) 290-9300
(Registrant's telephone number, including area code)
Item 1. Changes in Control of Registrant.
(a) On June 28, 2001, after receipt of stockholder approval, Katy Industries,
Inc. ("Katy") closed on the sale of 700,000 shares of its newly-issued
convertible preferred stock to KKTY Holding Company, L.L.C. ("KKTY") at an
aggregate purchase price of $70 million. KKTY obtained the $70 million
required to consummate the transaction from the sale of membership
interests to an investment fund affiliated with Kohlberg & Co., L.L.C. The
700,000 shares of convertible preferred stock are convertible into
approximately 11,666,666 shares of Katy common stock, which would represent
approximately 58.2% of the outstanding shares of common stock calculated on
a fully diluted basis (excluding outstanding options) after giving effect
to the conversion.
KKTY will receive payment-in-kind ("PIK") dividends on the convertible
preferred stock (that is, dividends in the form of additional shares of
Katy convertible preferred stock) at a rate of 15% per annum (compounded
annually) for three years and five months following the closing. If KKTY
continues to hold the convertible preferred stock for the three year and
five month period, it will receive PIK dividends of approximately 431,555
shares of convertible preferred stock, which would be convertible into
approximately 7,192,598 shares of Katy common stock. The shares of Katy
common stock issuable upon conversion of the convertible preferred stock
issued to KKTY at the closing, together with the shares of Katy common
stock issuable to KKTY upon the conversion of the convertible preferred
stock issuable to KKTY through KKTY's PIK dividend right, would represent
approximately 69.2% of the outstanding shares of common stock calculated on
a fully diluted basis (excluding outstanding options) after giving effect
to the conversion.
The convertible preferred stock is convertible at KKTY's option upon the
earlier of June 28, 2006 or the occurrence of certain extraordinary events
with respect to Katy.
At Katy's annual stockholders meeting on June 28, 2001, stockholders
approved, among other things, the election of the following five director
nominees, each of whom was designated by KKTY and who collectively
constitute a majority of the board of directors: Christopher Anderson,
William F. Andrews, Samuel P. Frieder, James A. Kohlberg and Christopher
Lacovara. So long as KKTY owns any convertible preferred stock of Katy,
KKTY has the right to nominate for election at any stockholders meeting a
simple majority of Katy's board of directors. Also, until KKTY converts any
of its Katy convertible preferred stock, certain Katy stockholders (Wallace
E. Carroll, Jr., Amelia M. Carroll and certain trusts and entities
associated with the Wallace E. Carroll, Jr. family) have agreed to vote
2,480,000 of their shares of Katy common stock in favor of electing the
nominees to Katy's board of directors designated by KKTY at all
stockholders meetings after the 2001 annual stockholders meeting.
The following agreements and documents are filed as exhibits hereto and are
incorporated herein by reference: (i) the Preferred Stock Purchase and
Recapitalization Agreement, dated June 2, 2001, between KKTY and Katy, (ii)
the Stock Voting Agreement, dated June 2, 2001, between KKTY and certain
Katy stockholders, (iii) the Restated Certificate of Incorporation of Katy,
as amended, which includes the Certificate of Amendment to the
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Restated Certificate of Incorporation filed with the Secretary of State of
the State of Delaware on June 28, 2001, and (iv) the press release issued
by Katy on June 28, 2001. Any description of the Preferred Stock Purchase
and Recapitalization Agreement, the Stock Voting Agreement or the terms of
the convertible preferred stock set forth in the Certificate of Amendment
to the Restated Certificate of Incorporation filed with the Secretary of
State of the State of Delaware on June 28, 2001 contained in the foregoing
summary is qualified in its entirety by reference to the applicable exhibit
filed herewith.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 2.1 Preferred Stock Purchase and Recapitalization Agreement,
dated June 2, 2001, between KKTY Holding Company, L.L.C. and
Katy Industries, Inc. (previously filed as Annex B to Katy
Industries, Inc.'s Revised Proxy Statement on Schedule 14A
filed with the Securities and Exchange Commission on June 8,
2001 and incorporated herein by reference).
Exhibit 3.1 Restated Certificate of Incorporation of Katy Industries,
Inc., as amended.
Exhibit 4.1 Stock Voting Agreement, dated June 2, 2001, between KKTY
Holding Company, L.L.C. and certain stockholders of Katy
Industries, Inc. (previously filed as Annex D to Katy
Industries, Inc.'s Revised Proxy Statement on Schedule 14A
filed with the Securities and Exchange Commission on June 8,
2001 and incorporated herein by reference).
Exhibit 99.1 Press Release issued by Katy Industries, Inc. on June 28,
2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 13, 2001 KATY INDUSTRIES, INC.
By: /s/ STEPHEN P. NICHOLSON
-------------------------------------------
Stephen P. Nicholson
Vice President, Finance and Chief Financial
Officer
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EXHIBIT INDEX
Exhibit Number Exhibit
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Exhibit 2.1 Preferred Stock Purchase and Recapitalization Agreement,
dated June 2, 2001, between KKTY Holding Company, L.L.C. and
Katy Industries, Inc. (previously filed as Annex B to Katy
Industries, Inc.'s Revised Proxy Statement on Schedule 14A
filed with the Securities and Exchange Commission on June 8,
2001 and incorporated herein by reference).
Exhibit 3.1 Restated Certificate of Incorporation of Katy Industries,
Inc., as amended.
Exhibit 4.1 Stock Voting Agreement, dated June 2, 2001, between KKTY
Holding Company, L.L.C. and certain stockholders of Katy
Industries, Inc. (previously filed as Annex D to Katy
Industries, Inc.'s Revised Proxy Statement on Schedule 14A
filed with the Securities and Exchange Commission on June 8,
2001 and incorporated herein by reference).
Exhibit 99.1 Press Release issued by Katy Industries, Inc. on June 28,
2001.
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