<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Angelica Corporation
---------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
---------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
ANGELICA
CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 29, 1996
The Annual Meeting of Shareholders of Angelica
Corporation will be held at the Saint Louis Club, 14th
Floor, 7701 Forsyth Boulevard, Clayton, Missouri, on
Wednesday, May 29, 1996 at 10:00 a.m. local time, for the
following purposes:
1. To elect three Directors for terms expiring at the
1999 Annual Meeting, or until their successors have
been duly elected and qualified.
2. To consider and act upon, if presented at the
meeting, proposals submitted by certain
shareholders as described at pages 13-16 in the
Proxy Statement.
3. To transact such other business as may properly
come before the meeting or any adjournment thereof.
The record date for determining shareholders entitled
to notice of and to vote at the meeting is April 5, 1996.
By Order of the Board
of Directors
JILL WITTER, Secretary
April 16, 1996
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE> 3
ANGELICA
CORPORATION
PROXY STATEMENT
Angelica Corporation (the ``Company'') has furnished this Proxy Statement to
its shareholders in connection with a solicitation of proxies by the Company's
Board of Directors. The proxies solicited are to be used at the Company's Annual
Meeting of Shareholders on May 29, 1996, for the purposes described in the
accompanying Notice of Annual Meeting of Shareholders.
Shares represented by a properly completed and returned proxy will be voted
in accordance with the shareholder's directions on the proxy. If no directions
are given on the proxy, the shares will be voted as recommended by the Board of
Directors. A proxy may be revoked at any time before it is voted by giving
written notice to the Company's Secretary, by executing a later dated proxy or
by appearing in person at the meeting and so advising the inspectors of the
voting.
This Proxy Statement and the accompanying proxy were mailed to shareholders
on or about April 16, 1996.
GENERAL INFORMATION
The only securities entitled to vote at the meeting are the outstanding
shares of the Company's Common Stock (the ``Common Stock''). As of April 5,
1996, the record date for the Annual Meeting, there were 9,157,420 shares of
Common Stock outstanding.
Each shareholder is entitled to one vote per share on each matter to be
considered at the meeting. Shares subject to abstentions will be treated as
shares that are represented at the 1996 Annual Meeting for purposes of
determining the presence of a quorum and as voted for purposes of determining
the approval of the shareholders on a particular proposal unless otherwise
stated in the disclosure regarding such proposal. Shares for which a broker
indicates it has no discretionary authority to vote and which are not otherwise
voted by such broker on a routine matter or matters requiring no prior
authorization or direction of the beneficial owner will not be considered
represented at the 1996 Annual Meeting for purposes of determining the presence
of a quorum or the approval of the shareholders on a particular proposal. Shares
that are voted by a broker on a routine matter but for which such broker has no
authorization or direction to vote on a nonroutine matter will be considered as
represented at the meeting for the determination of a quorum but as not
represented or voting for purposes of determining shareholder approval on such
nonroutine matter.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Company's Board of Directors consists of eight members classified into
two groups of three members each and one group of two members. Three Directors
will be elected to serve three-year terms expiring in 1999, or until their
successors are elected and qualified. Unless authority to vote is withheld,
proxies will be voted for the election of all of the nominees listed below. Mr.
Harbison is presently a member of the Board. Mr. Lee M. Liberman and Mr. Martin
Sneider are completing their terms on the Board through May 29, 1996. A majority
of the outstanding shares entitled to vote must be represented in person or by
proxy at the meeting in order to conduct the election of directors and other
matters mentioned in this Proxy Statement. If such a majority is represented at
the meeting, then the three nominees to the terms expiring in 1999 who receive
the highest total number of votes cast will be elected as Directors. Should any
nominee listed below become unavailable for any reason before the meeting,
proxies will be voted for a substitute person to be selected by the Board of
Directors unless the Board elects to reduce the number of Directors.
2
<PAGE> 4
INFORMATION ABOUT NOMINEES FOR DIRECTORS
THREE-YEAR TERMS EXPIRING IN 1999
EARLE H. HARBISON, JR. -- Chairman of the Board of Harbison Corporation
(manufacturer of molded plastic containers) since October, 1993. Mr. Harbison
retired from Monsanto Company where he had been a member of the Board of
Directors since 1986, Chairman of the Executive Committee from January to
September, 1993, and President and Chief Operating Officer from 1986 to January,
1993. Director: Merrill Lynch and Co. and RightChoice Managed Care, Inc.;
Director of the Company since 1986; Age 67.
CHARLES W. MUELLER -- President, Chief Executive Officer and Director of Union
Electric Company. Mr. Mueller has served as Chief Executive Officer of Union
Electric Company since January 1, 1994, and President and Director since July 1,
1993. He was Senior Vice President--Administrative Services from 1988 to July 1,
1993. Director: Boatmen's National Bank of St. Louis; Age 57.
WILLIAM A. PECK, M.D. -- Dean of the School of Medicine since 1989 and Executive
Vice Chancellor for Medical Affairs since 1993, Washington University. Director:
Allied Healthcare Products, Hologic and Reinsurance Group of America
Incorporated; Age 62.
INFORMATION ABOUT DIRECTORS CONTINUING IN OFFICE
THREE-YEAR TERMS EXPIRING IN 1998
H. EDWIN TRUSHEIM -- Retired Chairman of the Board of General American Life
Insurance Company since January, 1995. Mr. Trusheim served as Chairman of the
Board of General American Life Insurance Company from May, 1992 to January, 1995
and as Chairman of the Board and Chief Executive Officer from 1986 to May, 1992.
Director: Laclede Gas Company, RehabCare Group, Inc., Reinsurance Group of
America Incorporated, and Venture Stores, Inc.; Director of the Company since
1980; Age 68.
LAWRENCE J. YOUNG -- Chairman of the Board, President and Chief Executive
Officer of the Company. Mr. Young has served as Chairman of the Board since
November 1, 1990, Chief Executive Officer since November 1, 1989, and President
since 1988. He was Chief Operating Officer from 1988 to November 1, 1989.
Director: Venture Stores, Inc. and Boatmen's National Bank of St. Louis;
Director of the Company since 1988; Age 51.
THREE-YEAR TERMS EXPIRING IN 1997
LESLIE F. LOEWE -- Chairman Emeritus since November 1, 1990, Chairman of the
Board from 1984 to November 1, 1990 and Chief Executive Officer of the Company
from 1980 until November 1, 1989. Director of the Company since 1980; Age 74.
ELLIOT H. STEIN -- Chairman Emeritus of Stifel Financial Corp. (financial
holding company) since 1988 and Chairman of the Board from 1986 to 1988.
Director: D & K Wholesale Drug, Inc., and West Indies Sugar Company; Director of
the Company since 1958; Age 77.
WILLIAM P. STIRITZ -- President, Chief Executive Officer and Chairman of the
Board of Ralston Purina Company (producer of pet foods and batteries, as well as
other food products). Director: Ball Corporation, Boatmen's Bancshares, Inc.,
Interstate Bakeries Corporation, The May Department Stores Company, Ralcorp
Holdings, Inc. and Reinsurance Group of America Incorporated; Director of the
Company since 1983; Age 61.
COMPENSATION OF DIRECTORS AND OTHER INFORMATION CONCERNING THE BOARD AND ITS
COMMITTEES
Employee Directors receive no additional compensation for service on the
Board of Directors or its Committees. Directors who are not employees of the
Company were paid during the fiscal year ended January 27, 1996, an annual fee
of $16,000, payable in shares of Common Stock of the Company pursuant to the
Non-Employee Directors Stock Plan described below, plus $1,000 for each Board
meeting attended, $450 for each telephonic Board meeting and $700 for each
Committee meeting in which he participated.
Pursuant to the Non-Employee Directors Stock Plan, each non-employee
Director is entitled to receive 100 shares of Common Stock of the Company each
year. In addition, new non-employee Directors receive, upon their
3
<PAGE> 5
election, 400 shares of Common Stock. Stock granted under the plan is
forfeitable until earned out pursuant to a schedule based upon years of
participation in the plan and the Director's age at the time of entering the
plan. Additionally, options to purchase 2,000 shares of Common Stock are granted
annually under the Plan to each non-employee Director at 100% of the fair market
value of the shares on the Option Date (the date of the Annual Meeting in years
1995 through 2004). Shares of Common Stock received as payment of the retainer
fee are based on the fair market value of a share on the Retainer Date (the date
of the Annual Meeting of Shareholders each year). These shares are subject to
forfeiture at the rate of one-tenth of the total shares purchased for each month
less than ten that a non-employee Director serves as a Director after such
Annual Meeting.
All Directors participate in either the Deferred Compensation Option Plan
for Directors or the Deferred Compensation Option Plan for Selected Management
Employees. Directors may defer $5,000 to $10,000 of Board meeting and Committee
meeting fees annually for a period of years, not to exceed four, after becoming
a participant. In consideration of the compensation deferred, and subject to
certain conditions, participants are entitled to receive supplemental retirement
or survivor benefit payments over a 15-year period. The amount of such benefit
is related to the amount of compensation deferred and certain actuarial factors.
The Board of Directors has standing Audit, Compensation and Organization,
and Nominating Committees. All members of the Audit, the Compensation and
Organization and the Nominating Committees are non-employee Directors.
The Audit Committee consists of four Directors: Lee M. Liberman (Chairman),
Earle H. Harbison, Jr., Martin Sneider, and H. Edwin Trusheim. During the last
fiscal year, the Committee held four meetings. The Committee's principal
functions are: to recommend to the Board the employment of the Company's
independent auditors; to approve the scope of the auditors' work and to review
the results of that work; to review with management and the auditors the
Company's quarterly and annual results; to review and approve the auditors'
fees; to review the Company's internal auditing procedures and accounting
controls; to approve any non-audit service rendered by the auditors to the
Company; and to monitor compliance with the Company's Code of Conduct.
The Compensation and Organization Committee consists of four Directors: H.
Edwin Trusheim (Chairman), Lee M. Liberman, Elliot H. Stein, and William P.
Stiritz. During the last fiscal year, the Committee held one meeting. The
Committee's principal functions are: to determine the compensation of the Chief
Executive Officer and certain other executive officers; to review and approve
management's recommendations as to the compensation of other officers and
managerial employees; to recommend contracts for officers and certain managerial
employees; to evaluate the Company's senior management and recommend changes as
appropriate; and to review and approve certain of the Company's major employee
compensation and benefit plans.
The Nominating Committee consists of four Directors: Elliot H. Stein
(Chairman), Earle H. Harbison, Jr., Leslie F. Loewe, and William P. Stiritz.
During the last fiscal year, the Committee held two meetings. The Committee's
principal functions are: to recommend nominees for election as Directors of the
Company; to recommend nominees for Board committee appointment; and to recommend
candidates for appointment as corporate officers. The Committee will consider
any nominee for Director recommended by a shareholder who submits a notice of
nomination to the Company at least 30 days but not more than 60 days prior to
the Annual Meeting of Shareholders. Such notice shall contain appropriate data
with respect to the suggested candidate as required pursuant to the Company's
By-Laws.
The Board of Directors met a total of 11 times during the fiscal year ended
January 27, 1996. All but one of the Directors attended at least 75% of the
total meetings held by the Board and its respective committees, and which each
respective Director was eligible to attend, during the fiscal year. Because of
business-related conflicts, Mr. Harbison attended fewer than 75% of the
aggregate of such meetings.
4
<PAGE> 6
BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
The following table shows the shares of Common Stock beneficially owned by
persons known by the Company to own 5% or more of the outstanding shares of
Common Stock.
<TABLE>
<CAPTION>
BENEFICIALLY OWNED DIRECTLY
OR INDIRECTLY
---------------------------
NAME AND ADDRESS PERCENT
OF BENEFICIAL OWNER COMMON STOCK OF CLASS
------------------- ------------ ---------
<S> <C> <C>
Ariel Capital Management, Inc.<F1>....................... 1,197,985 13.1%
307 N. Michigan Avenue
Chicago, Illinois 60601
First Chicago NBD Corporation<F2>........................ 470,890 5.1%
One First National Plaza
Chicago, IL 60670
First Pacific Advisors, Inc.<F3>......................... 1,021,100 11.2%
11400 W. Olympic Boulevard
Los Angeles, CA 90064
Radnor Capital Management, Inc.<F4>...................... 659,000 7.2%
Two Radnor Corporate Center
100 Matsonford Rd., Suite 250
Radnor, PA 19087
Systematic Financial Management, L.P.<F5>................ 1,145,957 12.5%
Two Executive Drive
Fort Lee, NJ 07024
<FN>
- -------
<F1> Stated information is based on a Schedule 13G, dated December 31, 1995,
filed with the Securities and Exchange Commission. Ariel Capital Management,
Inc., an investment advisor, has sole voting power as to 1,144,535 shares,
shared voting power as to 15,300 shares, and sole dispositive power as to
1,197,985 shares.
<F2> Stated information is based on a Schedule 13G, dated February 9, 1996, filed
with the Securities and Exchange Commission. First Chicago NBD Corporation,
a parent holding company, has sole voting power as to 462,690 shares, sole
dispositive power as to 466,590 shares and shared dispositve power as to
5,800 shares.
<F3> Stated information is based on a Schedule 13G, dated February 13, 1996,
filed with the Securities and Exchange Commission. First Pacific Advisors,
Inc., an investment advisor, has shared voting power as to 306,100 shares
and shared dispositive power as to 1,021,100 shares.
<F4> Stated information is based on a Schedule 13G, dated February 13, 1996,
filed with the Securities and Exchange Commission. Radnor Capital
Management, Inc., an investment advisor, has sole voting power as to 648,000
shares and sole dispositive power as to 659,000 shares.
<F5> Stated information is based on a Schedule 13G, dated February 12, 1996,
filed with the Securities and Exchange Commission. Systematic Financial
Management, L.P., an investment advisor, has shared voting power as to
123,680 shares and sole dispositive power as to 1,145,957 shares.
</TABLE>
5
<PAGE> 7
The following table shows, as of April 5, 1996, the shares of Common Stock
beneficially owned by each person who is a Director or a named executive officer
and all persons as a group who were Directors or executive officers as of that
date. Except as otherwise noted, each such person has sole voting and investment
power as to his or her shares. Each Director and named executive officer owns
less than 1%, and all executive officers and Directors as a group own 3% of the
outstanding shares of Common Stock plus options that are exercisable within 60
days after April 5, 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY
OWNED DIRECTLY OR INDIRECTLY
AS OF APRIL 5, 1996
-----------------------------
OBTAINABLE
THROUGH
STOCK OPTION
OWNED<F1> EXERCISE<F2> TOTAL
--------- ------------ --------
<S> <C> <C> <C>
Theodore M. Armstrong........................................... 9,339<F3> 28,000 37,339
Michael E. Burnham.............................................. 3,838<F4> 13,000 16,838
Gene P. Byrd.................................................... 5,422 24,600 30,022
Earle H. Harbison, Jr........................................... 2,191 600 2,791
Lee M. Liberman................................................. 3,091 3,000<F5> 6,091
Leslie F. Loewe................................................. 28,236<F6> 600 28,836
Martin Sneider.................................................. 1,541 600 2,141
Elliot H. Stein................................................. 19,851<F7> 600 20,451
William P. Stiritz.............................................. 2,341 600 2,941
H. Edwin Trusheim............................................... 2,541 600 3,141
Alan D. Wilson.................................................. 3,359 7,200 10,559
Lawrence J. Young............................................... 28,403 51,000 79,403
All Executive Officers and Directors as a group (16 persons).... 117,199 163,200 280,399
<FN>
- -------
<F1> Includes 1,150 shares for Mr. Harbison, 1,550 shares for Mr. Liberman, 100
shares for Mr. Loewe, 600 shares for Mr. Sneider, 2,550 shares for Mr.
Stein, 1,300 shares for Mr. Stiritz, and 1,450 shares for Mr. Trusheim, all
held under the Company's 1994 Non-Employee Directors Stock Plan or its
predecessor Non-Employee Directors Stock Plan. With respect to such shares,
non-employee Directors have sole voting power and no current investment
power, except for 575 shares held by Mr. Harbison, the 1,550 shares held by
Mr. Liberman, the 100 shares held by Mr. Loewe, the 2,550 shares held by Mr.
Stein, and 725 shares held by Mr. Trusheim which are nonforfeitable.
<F2> Stock options exercisable within 60 days after April 5, 1996.
<F3> Mr. Armstrong disclaims beneficial ownership of 200 shares included above
which are held by a trust for his father of which he is co-trustee.
<F4> Mr. Burnham disclaims beneficial ownership of 120 shares included above
which are held by his spouse as custodian for their children.
<F5> Includes 2,400 options to purchase shares which will become exercisable upon
Mr. Liberman's retirement from the Board on May 29, 1996.
<F6> Mr. Loewe disclaims beneficial ownership of 6,945 shares included above
which are owned by his wife.
<F7> This total includes 15,679 shares held by Mr. Stein as a co-trustee of
various trusts for beneficiaries who are unrelated to him, as to which
shares he has shared voting power and investment power with the co-trustee.
Mr. Stein disclaims beneficial ownership of all the shares referred to in
this note.
</TABLE>
6
<PAGE> 8
EXECUTIVE COMPENSATION
During the last three fiscal years, the amounts shown in the table below
were paid to each of the Company's five most highly compensated executive
officers for services rendered during the applicable fiscal year.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS
---------------------------------------------------------------------
BONUS RESTRICTED ALL OTHER
FISCAL ------------------------- STOCK COMPEN-
NAME AND YEAR NONCASH TOTAL AWARD(S) SATION
PRINCIPAL POSITION ENDING SALARY<F1> CASH <F2><F3> BONUS ($)<F2><F3> OPTIONS (#) ($)<F4>
------------------ ------ ---------- ---- -------- ----- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence J. Young, 1/27/96 $260,000 $46,250 $46,250 $92,500 $23,125 10,000 $600
Chairman, President 1/28/95 245,000 80,965 80,964 161,929 40,482 -- 600
& CEO 1/29/94 240,000 51,903 51,903 103,806 25,951 10,000 600
Theodore M. Armstrong, 1/27/96 164,000 16,500 16,500 33,000 8,250 5,000 600
Senior Vice President-- 1/28/95 157,584 28,142 28,142 56,284 14,071 -- 600
Finance & Administration 1/29/94 150,583 26,167 8,723 34,890 4,361 5,000 600
and Chief Financial Officer
Gene P. Byrd, Vice 1/27/96 155,000 20,000 20,000 40,000 10,000 -- 600
President. Also President, 1/28/95 152,750 19,313 19,312 38,625 9,656 -- 600
Angelica Uniform Group 1/29/94 154,750 17,250 17,250 34,500 8,625 4,000 600
Michael E. Burnham, Vice 1/27/96 93,000 17,871 17,871 35,742 8,935 4,000 600
President. Also President, 1/28/95 84,500 41,937 19,063 61,000 9,532 -- 600
Life Uniform and Shoe 1/29/94 78,000 16,795 9,044 25,839 4,522 3,500 600
Shops
Alan D. Wilson, Vice 1/27/96 156,592 43,110 14,370 57,480 7,185 5,000 600
President. Also President, 1/28/95 132,371 34,817 11,606 46,423 5,803 -- 600
Angelica Healthcare 1/29/94 N/A N/A N/A N/A N/A N/A N/A
Services Group<F5>
<FN>
- --------
<F1> Includes participant deferrals under the Retirement Savings Plan.
<F2> Participants in the Stock Bonus and Incentive Plan may elect to receive up
to 50% of their Incentive Compensation in restricted shares of Company's
Common Stock (``elected shares'') in lieu of cash. Additionally,
participants receive restricted shares in the Company's Common Stock
(``matching shares'') with a fair market value equal to 1/2 of that portion
of the Incentive Compensation which participants elected to take in Common
Stock. Restricted shares of Common Stock (both ``elected shares'' and
``matching shares'') were issued to participants based upon the fair market
value (the average of the high/low transaction prices) of the Common Stock
on the date of issuance. Elected shares are reported under the ``Noncash''
column, while matching shares are reported under the ``Restricted Stock
Awards'' column. The named executive officers received elected shares, which
become transferable in three years as follows: Mr. Young 2,202 shares; Mr.
Armstrong 785 shares; Mr. Byrd 952 shares; Mr. Burnham 851 shares; and Mr.
Wilson 684 shares. Participants receive dividends on all restricted shares.
<F3> At the end of the last fiscal year, the named executive officers held the
following number of shares of restricted stock (elected and matching
shares): Mr. Young, 10,719 shares with an aggregate value of $219,739; Mr.
Armstrong, 2,962 shares with an aggregate value of $60,721; Mr. Byrd, 2,727
shares with an aggregate value of $55,903; Mr. Burnham, 2,101 shares with an
aggregate value of $43,070; and Mr. Wilson, 1,441 shares with an aggregate
value of $29,540.
<F4> Company contributions to the Retirement Savings Plan on behalf of each of
the named executive officers to match 1995 participant deferrals (included
under Salary) made by each to such Plan.
<F5> Mr. Wilson was designated an Executive Officer during the fiscal year ending
1/28/95.
</TABLE>
7
<PAGE> 9
STOCK OPTIONS
The following table contains information concerning the grant of Stock
Options under the Company's 1994 Performance Plan to the named executive
officers of the Company during the last fiscal year.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM
------------------------------------------------- -------------------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#)<F1> YEAR<F4> ($/SH) DATE 0% ($) 5% ($)<F2> 10% ($)<F2>
---- ------- --------- ------- ---------- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence J. Young........ 10,000 12.2% $25.3125 2/28/04 $0 $ 139,555 $ 343,730
Theodore M. Armstrong.... 5,000 6.1 25.3125 2/28/04 0 69,777 171,865
Gene P. Byrd............. -- -- -- -- -- -- --
Alan D. Wilson........... 5,000 6.1 25.3125 2/28/04 0 69,777 171,865
Michael E. Burnham....... 4,000 4.9 25.3125 2/28/04 0 55,822 137,492
All Shareholders<F3>..... N/A N/A N/A N/A 0 127,796,375 314,768,913
All Employee Optionees... 82,250 100.0 25.3125 2/28/04 0 1,147,840 2,827,188
Optionees' Gain as % of
all Shareholders' Gain.. N/A N/A N/A N/A N/A .9% .9%
<FN>
- --------
<F1> All options become exercisable ratably over five years and are subject to
continued employment. In the event of a ``Non-Approved Takeover,'' all
options become immediately exercisable for a period of 90 days, provided,
however, SEC ``Reporting Persons'' are subject to certain qualifications.
The named executive officers received only one grant of options during the
last fiscal year.
<F2> The dollar amounts shown in these columns are the result of calculations at
the 5% and 10% rates prescribed by the Securities and Exchange Commission
and are not intended to forecast possible future appreciation, if any, of
the Company's stock. The Company did not use an alternative formula for a
grant date valuation, as the Company is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors. There can be no assurance that the Company's stock will
perform at the assumed annual rates shown in the table, and the Company
neither makes nor endorses any predictions as to future market performance
of its stock.
<F3> All shareholders are shown in the table to demonstrate that no gain to the
optionees is possible without an increase in stock price beneficial to all
shareholders. The Potential Realizable Value to all shareholders is the
aggregate net gain for all shareholders based upon a fair market value of
$25.3125 per share on February 28, 1995 assuming 9,157,420 shares of the
Company's stock remain outstanding until February 28, 2004 and their value
increases at the annual rates shown in the table.
<F4> Based on 82,250 options granted to 72 employees during the fiscal year.
</TABLE>
8
<PAGE> 10
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executive officers concerning unexercised options held as of the end of the last
fiscal year. No options were exercised by the named executive officers during
the last fiscal year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END (#) FY-END ($)
ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE<F1>
---- ------------ ------------------ ------------- -----------------
<S> <C> <C> <C> <C>
Lawrence J. Young........................ -- $ -- 137,200/110,300 $ --
Theodore M. Armstrong.................... -- -- 23,000/14,000 --
Gene P. Byrd............................. -- -- 20,600/8,400 --
Michael E. Burnham....................... -- -- 9,800/9,700 --
Alan D. Wilson........................... -- -- 5,000/8,000 --
<FN>
- --------
<F1> Based upon the average of the high/low transaction prices as reported on New
York Stock Exchange composite tape on January 26, 1996.
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company entered into a special retirement benefit agreement with Alan D.
Wilson dated August 25, 1987 which provides for monthly benefits of $8,333 over
a ten-year period commencing on or after Mr. Wilson's 65th birthday. All
benefits under the agreement are reduced by the amount of retirement benefits
payable by the Company under certain other Company retirement or deferred
compensation plans. His right to such special retirement benefit vests at the
rate of 6% a year for each of the first ten years of employment and 4% a year
for each year of employment for the next ten years; provided, however, that his
rights shall be 100% vested if he attains age 65 and has been continuously
employed by the Company since the date of the agreement. The retirement benefit
agreement also contains non-disclosure and non-competition covenants.
Under a Management Retention and Incentive Plan, the Board has authorized
agreements with all but one of the executive officers named in the Summary
Compensation Table. Under these agreements, the Company will make an additional
cash payment if, within two years following a change in control of the Company
(as defined in those agreements), the individual's employment is terminated
(other than for cause) or he resigns for good reason such as a change in his
responsibilities, compensation or conditions of continued employment. Each of
these individuals will receive an amount up to 2.99 times his average annual
compensation during the five years prior to the change in control as well as
outplacement counselling and certain medical benefits. Additionally, an
individual will be relieved of all non-compete obligations with respect to the
Company.
Two separate trusts have been established with Boatmen's Trust Company to
fund certain benefits payable to key management personnel, pursuant to certain
employee benefit plans, in the event of their termination of employment after a
change in control of the Company (as defined in the respective plans). One trust
relates to the benefits payable under the Management Retention and Incentive
Plan, and the other trust relates to the benefits payable under the Deferred
Compensation Option Plan for Selected Management Employees and the Supplemental
Plan. In the event of a change in control or potential change in control of the
Company, the Company is required to make a deposit to each trust in an amount
equal to the excess of the maximum amount potentially payable under the plan or
plans to all participants over the current value of the trust assets. Each trust
is revocable by the Company at any time prior to a potential change in control
or a change in control of the Company, and will terminate automatically on the
date which is three years after a change in control. All remaining trust assets
will be returned to the Company upon the revocation
9
<PAGE> 11
or termination of a trust. If the Company makes a deposit to a trust in
connection with a potential change in control, an actual change in control does
not occur within 90 days thereafter, and the Board adopts a resolution that a
change in control is not imminent, then the deposit made by the Company will be
returned. The assets of the trust established to fund benefits under the
Deferred Compensation Option Plan for Selected Management Employees and the
Supplemental Plan are subject to the claims of the general creditors of the
Company in the event of the Company's insolvency.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, or the Securities Exchange
Act of 1934, each as amended, that might incorporate future filings, including
this Proxy Statement, in whole or in part, the following Compensation and
Organization Committee Report Regarding Executive Compensation and the
Performance Graph on page 13 shall not be incorporated by reference, into any
such filings.
COMPENSATION AND ORGANIZATION COMMITTEE REPORT
REGARDING EXECUTIVE COMPENSATION
The Compensation and Organization Committee of the Board of Directors (the
``Committee''), which consists entirely of outside directors, has overall
responsibility to review and recommend broad-based compensation plans to the
Board of Directors. The Committee also reviews and approves participation in
stock-related and long-term incentive plans and executive benefits. The
Committee and the management of the Company are committed to the principle that
a significant portion of total compensation should be commensurate with
performance and attainment of predetermined financial and strategic objectives.
There are two elements in the Company's executive cash compensation program,
base salary and target incentive compensation. The Company's cash compensation
program is structured such that the total of an executive's base salary and
target incentive compensation is within a range deemed to be competitive with
other companies that are considered to be the Company's competitors for
executive talent. In setting the total cash compensation range for executives of
the Company's various operating divisions, the Committee considers compensation
packages offered by companies in competitive markets, such as uniform
manufacturing companies, textile rental companies and specialty retail
companies. Since there are no companies with substantially similar lines of
business as the Company, taken as a whole, the compensation packages for the
officers employed at the Company's executive offices are compared to the
compensation packages of comparable officers of companies of similar size and
complexity as the Company. Companies used for comparative purposes in analyzing
the Company's compensation policies are not necessarily the same companies
included in the performance graph peer group.
The Committee uses a variety of nationally published surveys in order to
develop a median range of compensation. The surveys cover hundreds of companies
and deal with a variety of factors such as labor force, sales revenue, location,
and market. Total cash compensation is maintained within the target range as
developed by the surveys. Although factors such as location, experience and
performance can affect where in the range total cash compensation falls,
attempts are made to maintain total cash compensation at the median of the
range. However, due to results of the Company in recent years causing incentive
compensation for such years to be below target levels, total cash compensation
has been in the lower half of the range.
The Company has established guidelines that the Committee uses in
determining on an ongoing basis the desired split between base salary and target
incentive compensation for executives of the Company. Under these guidelines,
executive positions are assigned grade levels, and officers in the higher paid
grade levels will generally have a smaller percentage of their total
compensation payable as base salary and a greater percentage of their
compensation payable upon the achievement of performance targets established by
the Committee. Under these guidelines, an individual executive's target
incentive compensation ranges from 10% to 65% of base salary compensation based
upon the particular grade level. From time to time, the Committee may establish
target incentive levels for certain senior management executives in excess of
the established guidelines for the particular grade level. The target incentive
portion of the total compensation package is consistent with the Committee's
strong commitment to a pay-for-performance policy with respect to executive
compensation. With the exception of Mr. Young, all of the named executive
officers currently have target incentive compensation percentages within the
established guidelines for their grade levels for their respective executive
positions, which percentages range from 36% to 52%. Mr. Young's target incentive
percentage is in excess of the established guidelines and is discussed later in
this report. To the extent that
10
<PAGE> 12
the split between base salary and target incentive compensation in a newly-hired
executive's initial compensation package deviates from these guidelines, the
Committee will make adjustments in future years in such a manner that the split
between the executive's base salary and target incentive compensation comes
within the executive's applicable grade level guidelines as soon as practicable
after the initial year of employment.
The actual amount of incentive compensation paid is based upon performance
in comparison to a targeted pre-tax earnings level achieved by the Company or
relevant operating group. Factors such as economic or market conditions are
considered in setting the Company's targeted pre-tax earnings level. Actual
incentive compensation earned during the last fiscal year demonstrates the
Board's philosophy. As the Company did not achieve all of its financial
objectives in fiscal 1996, executive officers, with the exception of Mr.
Burnham, received less than their targeted incentive compensation. Those listed
in the Summary Compensation Table received the following percentage of their
targeted incentive compensation: Mr. Young 50%; Mr. Armstrong 50%; Mr. Byrd 50%,
and Mr. Wilson 81%. Because the Life division exceeded its financial objectives
in fiscal 1996, Mr. Burnham received 104% of his targeted incentive
compensation.
The Company's executive officers are encouraged to maintain a significant
long-term stock ownership position in the Company's Common Stock in order to
align their interests with those of the Company's shareholders. The Committee
believes that executives who hold such positions will be more motivated to
generate performance gains by working steadily to increase shareholder value
over the long term. The Stock Bonus and Incentive Plan encourages employees to
invest in the Company's Common Stock by providing a matching incentive, yet
requires that the stock investment be held for set periods after issuance in
order to retain the stock purchased with the Company's match, encouraging
employees to work to increase the price of Common Stock. All eligible executive
officers have elected to participate.
In addition, the Committee, from time to time, awards stock options under
the Company's Stock Option Plan or the 1994 Performance Plan to various
executives. The option price is the fair market value on the date of grant, and
options become exercisable ratably over the next five years if the executive
remains employed by the Company. The Stock Option Plan gives employees the
opportunity to buy Common Stock at option prices which, at the time of exercise,
may be below the then market value. This also encourages employees to work
towards the growth of shareholder value. Grants are viewed as an opportunity for
employees to invest in the Company's Common Stock in such a manner as will
result in a long-term increase in the employee's net worth and a supplement to
retirement savings, while at the same time meeting the Board's goal of employee
ownership of Common Stock. The grant of stock options is strictly discretionary;
however, total grants outstanding, as well as the employee's performance and
grade level are considered in determining the amount of option grants. While the
value realizable from exercisable options depends on the extent to which the
Company's performance is reflected in the market price of the Company's Common
Stock at a particular point in time, the decision to exercise an option and thus
realize the value in any particular year is determined by each individual
executive.
MR. YOUNG'S COMPENSATION FOR THE FISCAL YEAR
The Committee's general approach in setting Mr. Young's annual cash
compensation is to seek to be competitive with other companies of comparable
size and business scope, while at the same time having a large percentage of his
total cash compensation based upon performance criteria. While this may result
in a fluctuation in the actual level of Mr. Young's compensation from year to
year, the Committee believes that its objective appropriately incentivizes the
Company's chief executive officer toward clearly defined goals, while
maintaining some certainty in the level of compensation through the
non-performance-based base salary portion of total compensation. In keeping with
this philosophy, Mr. Young's target incentive compensation for fiscal 1997 is
equal to 81% of his base salary compensation. For the reported fiscal year 1996,
Mr. Young received 50% of his target incentive compensation.
Mr. Young's participation in the Stock Option Plan and the Stock Bonus and
Incentive Plan is also in accordance with the Committee's philosophy that the
chief executive officer be encouraged to maintain a significant stock ownership
position in order to align his interests with those of the Company's
shareholders.
Although no executive officer currently receives in excess of $1,000,000
compensation, the Committee's policy is to maximize the tax deductibility of
executive compensation without compromising the essential framework of the
existing total compensation program. The Committee may elect to forego
deductibility for federal income tax
11
<PAGE> 13
purposes if such action is, in the opinion of the Committee, necessary or
appropriate to further the goals of the Company's executive compensation
program, or otherwise is in the Company's best interests.
Although the foregoing describes the Committee's current compensation
policies applicable to the Company's executive officers, the Committee reserves
the right to change these policies at such time in the future and in such manner
as the Committee deems necessary or appropriate.
SUBMITTED BY THE COMPENSATION AND ORGANIZATION COMMITTEE OF THE COMPANY'S
BOARD OF DIRECTORS
H. E. Trusheim, Chairman L. M. Liberman
E. H. Stein W. P. Stiritz
PENSION PLAN
The Company has maintained a defined benefit Pension Plan since April 1,
1980. An employee earns benefits in any year equal to 0.25% of total
compensation plus an additional 0.25% of that part of compensation which is in
excess of one-half of the Social Security Taxable Wage Base, plus, for each year
of employment in excess of 15 years, an additional 0.05% of total compensation.
Reduced benefits are payable at early retirement. Estimated annual benefits
under the Pension Plan payable upon normal retirement to the named executive
officers are as follows: Mr. Young, $45,712; Mr. Armstrong, $15,491; Mr. Byrd,
$26,745; Mr. Burnham, $27,549; and Mr. Wilson, $16,439. These figures assume
that participants will remain with the Company until their normal retirement
dates and will receive reasonable increases to their current compensation.
The Company also maintains the Supplemental Plan, a supplemental retirement
benefit plan for a limited number of highly compensated officers and management
personnel selected by the Compensation and Organization Committee. All of the
named executive officers participate in the Supplemental Plan.
The ``formula amount'' of supplemental retirement benefit payable under the
Supplemental Plan is determined by the Committee when the participant is invited
to join the Plan and is subject to increase at the Committee's discretion.
Additionally, the Committee may, at its discretion, reduce the formula amount or
``freeze'' the then vested benefit of certain participants. A full benefit is
the participant's final average compensation multiplied by the formula amount
(between 30% and 50%). A participant who has less than 30 years of service at
retirement will receive a reduced amount of the otherwise fully vested formula
amount, based on actual years of service. For the purposes of the Supplemental
Plan, final average compensation means the average compensation paid during the
three most highly compensated years of the participant's last five years of
employment.
Benefits are generally payable over 120 months beginning at age 65, but may
extend for a period of up to 15 years. Any benefit payable under the
Supplemental Plan will be reduced by benefits paid under the Pension Plan.
Estimated annual benefits under the Supplemental Plan payable upon normal
retirement over a ten-year period to the named executive officers are as
follows: Mr. Young, $366,530; Mr. Armstrong, $52,951; Mr. Byrd, $89,384; Mr.
Burnham, $117,875; and Mr. Wilson, $59,637. These figures reflect a reduction
for the benefit payable under the Pension Plan (or predecessor plan), and assume
that participants will remain with the Company until their normal retirement
dates and will receive reasonable increases to their current compensation.
12
<PAGE> 14
PERFORMANCE GRAPH
The following is a line-graph presentation comparing five-year cumulative
total returns among the Company's Common Stock, the Standard & Poors 500 Index
and the Value Line Industrial/Business Services Index for the five years ended
January 31, 1996.
[GRAPH]
<TABLE>
<CAPTION>
1/31/91 1/31/92 1/31/93 1/31/94 1/31/95 1/31/96
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Angelica............................................. 100 120 83 96 94 75
S&P 500.............................................. 100 123 136 154 155 214
Value Line: Industrial/Business Services............. 100 125 149 176 169 207
(ASSUMES $100 INVESTED ON JANUARY 31, 1991 AND THAT DIVIDENDS ARE REINVESTED.)
</TABLE>
SHAREHOLDER PROPOSALS
(ITEM 2 ON PROXY CARD)
SHAREHOLDER PROPOSAL NO. 2A
APPROVAL OF GOLDEN PARACHUTE AGREEMENTS
The Company has been advised that a shareholder proposes to introduce the
following resolution and statement in support hereof at the 1996 Annual Meeting
of Shareholders:
``RESOLVED, that the shareholders recommend that the board of directors
adopt a policy against entering into future agreements with officers and
directors of this corporation which provide compensation contingent on a change
of control of the corporation, unless such compensation agreements are submitted
to a vote of the shareholders and approved by a majority of shares present and
voting on the issue.''
(The name and address of, and the number of shares held by, the proponent can be
obtained upon request from the Office of the Secretary of the Company.)
STATEMENT BY SHAREHOLDER IN SUPPORT OF THE RESOLUTION
``Lucrative severance contracts awarded to senior corporate executives which
provide compensation contingent on a change of control, usually through a merger
or acquisition of the corporation, are known as `golden parachutes.' These
contracts are awarded without shareholder approval.
13
<PAGE> 15
The practice of providing these large cash awards to a small group of senior
corporate managers without shareholder approval has been a subject of public
outcry. In 1988, the U.S. Senate in emphasizing the potential conflict of
interest between management and shareholders created by these agreements voted
ninety eight to one to require shareholder approval of golden parachutes.
Although final action was not taken, it is clear to me that the overwhelming
vote in favor of the measure reflects public sentiment against golden
parachutes. A shareholder vote would allow the corporation's owners to decide
for themselves whether golden parachutes are in their best interests.
I am a founding member of the Investors Rights Association of America and it
is clear to me that requiring a shareholder vote is necessary to address the
conflicts of interest between management and shareholders that arise in the
awarding of golden parachutes.
I urge your support. Vote for this Resolution.''
STATEMENT BY THE BOARD OF DIRECTORS AGAINST THE RESOLUTION
The Company's Board of Directors strongly believes that this shareholder
proposal is contrary to the best interests of the Company and its shareholders.
The Company must be able to attract and retain employees who have the requisite
managerial and operational skills to contribute significantly to the Company's
growth and success. In the current environment of hostile takeovers and other
changes of control, reasonable post-takeover arrangements are often an essential
term of employment contracts. The Board expressly recognized the importance of
retaining key personnel during and after a disruption which is typically
provoked by takeover offers (whether or not ultimately successful) by adopting
the Management Retention and Incentive Plan (the ``Plan'') in 1990 which
provides for change of control severance agreements with certain key executives.
The 12 change-in-control agreements under the Plan to which the Company is a
party are described on page 9 of this Proxy Statement under the caption
``Employment Contracts and Termination of Employment and Change-In-Control
Arrangements.''
Under the Plan, an executive is not automatically entitled to a severance
payment upon a change of control. Instead, an executive will receive payments
only if there is a change of control of the Company as a result of a hostile
takeover and the acquiror either (1) terminates the executive's employment or
(2) adversely changes the terms of the executive's employment. Thus, it is the
acquiror--not the executive--who controls whether the executive will receive a
severance payment. As a result, the executive does not have a financial
incentive to act detrimentally to shareholder interests. In fact, if the
executive voluntarily resigns or is fired for cause (as defined in the Plan), he
or she is not entitled to severance payments.
The Company's change-in-control agreements are not ``lucrative severance
contracts.'' No severance payment may exceed 2.99 times an executive's average
annual compensation for the five calendar years immediately preceding the change
of control. Because the benefit is based on a five-year average, an executive is
prevented from artificially inflating his or her salary immediately prior to the
change of control in order to increase his or her severance payment. Further,
the severance benefit payable for any executive who is 62 years of age or older
at the time of termination is adjusted downward on a pro rata basis to account
for full retirement benefits received at age 65. An executive who is 65 years of
age or older at the time of termination is not entitled to any severance
benefit.
Although the proposal does not relate to the Company's existing
change-in-control agreements, to adopt such a policy with respect to future
arrangements would adversely affect the Company's ability to recruit top
executives, and might force the Company to make alternative, more costly
employment arrangements.
The Board strongly believes that its change-in-control agreements benefit
the shareholders by ensuring that key executives are not distracted by personal
uncertainties which arise during a threatened change of control. The agreements,
which have no current cost to the Company and under which no payments have ever
been made, are designed to keep key executives' undivided attention on their
duties at precisely the time when such attention is needed most. Without a
change-in-control agreement, an executive could be tempted to leave the Company
for another position which offers greater security. In short, the agreements
help motivate key executives to act objectively and in the shareholders' best
interests, even when their jobs and financial well-being may be threatened by a
would-be acquiror of the Company.
14
<PAGE> 16
The Board of Directors is aware that agreements contingent on a ``change of
control'' are sometimes criticized as an anti-takeover device. However, the
Company's change-in-control agreements should not, in the Board's opinion,
significantly inhibit any potential acquiror, particularly in light of the
Company's longstanding realistic compensation policies upon which the severance
payments are based. Furthermore, in the event of a hostile takeover, an acquiror
may well choose to continue at a higher salary the services of some or all of
the subject employees rather than making the relatively modest payments under
existing severance contracts.
Traditionally, compensation arrangements with key executives have been the
responsibility of the Board of Directors. The Board believes it has properly
fulfilled its responsibilities in this area in the past and is fully prepared to
fulfill its responsibilities in the future. Accordingly, the Board of Directors
believes that the adoption of the proposal is not only unnecessary, but would be
detrimental to the best interests of the Company and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS WITHOUT DISSENT A VOTE AGAINST THIS PROPOSAL
NO. 2A. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY.
SHAREHOLDER PROPOSAL NO. 2B
ELIMINATION OF CLASSIFIED BOARD OF DIRECTORS
The Company has been advised that a shareholder proposes to introduce the
following resolution and statement in support hereof at the 1996 Annual Meeting
of Shareholders:
``RESOLVED, that the stockholders of the Company request that the Board of
Directors take the necessary steps, in accordance with state law, to declassify
the Board of Directors so that all directors are elected annually, such
declassification to be effected in a manner that does not affect the unexpired
terms of directors previously elected.''
(The name and address of, and the number of shares held by, the proponent can be
obtained upon request from the Office of the Secretary of the Company.)
STATEMENT BY SHAREHOLDER IN SUPPORT OF THE RESOLUTION
``The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
its implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the Board being elected
annually, is not in the best interests of the Company and its stockholders.
The Board of Directors of the Company is divided into three classes serving
staggered three-year terms. I believe that the Company's classified Board of
Directors maintains the incumbency of the current Board and therefore of current
management, which in turn limits management's accountability to stockholders.
The elimination of the Company's classified Board would require each new
director to stand for election annually and allow stockholders an opportunity to
register their views on the performance of the Board collectively and each
director individually. I believe this is the one of the best methods available
to stockholders to insure that the Company will be managed in a manner that is
in the best interests of the stockholders.
I am a founding member of the Investors Rights Association of America and I
believe that concerns expressed by companies with classified boards that the
annual election of all directors could leave companies without experienced
directors in the event that all incumbents are voted out by stockholders, are
unfounded. In my view, in the unlikely event that stockholders vote to replace
all directors, this decision would express stockholder dissatisfaction with the
incumbent directors and reflect the need for change.
I urge your support, vote for this resolution.''
STATEMENT BY THE BOARD OF DIRECTORS AGAINST THE RESOLUTION
Under the corporate law of Missouri, the State in which the Company is
incorporated, the change contemplated by the proposal would require an amendment
to the Company's By-Laws, which must first be approved by the Board of
Directors. A vote in favor of Proposal No. 2B, therefore, would constitute a
request that the Board initiate an amendment. The Board does not believe,
however, that such an amendment would be in the best interests of the Company or
its shareholders.
15
<PAGE> 17
The staggered election of directors is intended to prevent precipitous
changes in the composition of the Board by preventing the election of an
entirely new Board in a single year. In the opinion of this Board, a staggered
Board of Directors facilitates continuity and stability of leadership and policy
by assuring that several experienced personnel familiar with the Company and its
business will be on the Board of Directors at all times. Preventing such a
precipitous change serves to moderate changes in corporate policies, business
strategies and operations which are not in the best interests of the Company and
its shareholders.
The Board of Directors recognizes that the proposal would enable a group of
individuals or entities owning a significant but minority position in a company
to obtain actual control of the Company or further some other personal goal with
respect to the Company or its shares or assets by electing at a single annual
meeting its own slate of directors. Such an attempt, even if unsuccessful, can
seriously disrupt the business of the Company and cause it to incur substantial
expense. Board classification encourages any person or group seeking to acquire
control of the Company to initiate such action through arm's-length negotiations
with management and the Board of Directors, who are in a position to negotiate a
transaction which is fair to all Company shareholders. In the event the Board is
radically changed, it may be unable or unwilling to protect the interests of all
shareholders from the abusive tactics of a corporate raider who seeks to obtain
effective control of any public corporation for its own purposes rather than to
create long-term value for the shareholders.
The staggered election of Directors used by the Company is a common practice
and is similar to procedures which have been adopted by the shareholders of many
major corporations. It is specifically permitted by the laws of many states,
including the State of Missouri, as well as the rules of the New York Stock
Exchange.
THE BOARD OF DIRECTORS RECOMMENDS WITHOUT DISSENT A VOTE AGAINST THIS PROPOSAL
NO. 2B. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY A CONTRARY CHOICE ON THE PROXY.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as independent public accountants for the
Company since 1954, and the Board of Directors has selected it to serve in that
capacity again. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting of Shareholders. Such representatives will have an
opportunity to make a statement, if they so desire, and will be available to
respond to appropriate questions by shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company at its principal
executive offices no later than December 16, 1996 to be included in the
Company's proxy materials for its 1997 Annual Meeting of Shareholders.
Shareholder proposals not in full conformity with applicable rules of the
Securities and Exchange Commission may be excluded from such materials.
GENERAL
Proxies will be solicited by mail. They also may be solicited by officers
and regular employees of the Company personally or by telephone, but such
persons will not be specifically compensated for such services. Corporate
Investor Communications, Inc. has been retained to assist in the solicitation of
proxies for a fee of $5,000, plus expenses. Banks, brokers, nominees, and other
custodians and fiduciaries may be reimbursed for their reasonable out-of-pocket
expenses in forwarding soliciting material to the beneficial owners. The cost of
soliciting proxies will be borne by the Company.
The Board of Directors does not intend to bring any other matters before the
meeting, and, at the date of this Proxy Statement, the Board of Directors is not
informed of any matters that others may bring before the meeting. However, if
any other matters properly come before the meeting, it is the intention of the
proxies named on the proxy card to vote as proxies on such matters in accordance
with their judgment as to the Company's best interest.
SHAREHOLDERS ARE URGED TO DATE, SIGN, AND PROMPTLY RETURN THE ENCLOSED PROXY IN
THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOUR COOPERATION WILL BE APPRECIATED.
St. Louis, Missouri
April 16, 1996
16
<PAGE> 18
(Fold And Detach Here)
- -------------------------------------------------------------------------------
ANGELICA CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 29, 1996
DIRECTORS RECOMMEND A VOTE FOR
1. ELECTION OF DIRECTORS: For terms expiring in 1999:
Earle H. Harbison, Jr., Charles W. Mueller, William A. Peck, M.D.
/ / FOR all nominees listed.
/ / FOR all nominees listed except ________________________________________
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
DIRECTORS RECOMMEND A VOTE AGAINST
2. A. Shareholder proposal on
Approval of Golden Parachute
Agreements
FOR AGAINST ABSTAIN
/ / / / / /
B. Shareholder proposal on
Elimination of Classified Board
of Directors
FOR AGAINST ABSTAIN
/ / / / / /
3. In such manner as said proxies may in their discretion determine, upon such
other matters as may properly come before the meeting.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS FORM.
<PAGE> 19
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING, WHETHER OR NOT
YOU ATTEND THE MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE
URGE YOU TO COMPLETE, DETACH AND MAIL THE PROXY FORM BELOW.
(Fold And Detach Here)
- -------------------------------------------------------------------------------
The undersigned hereby appoints Lawrence J. Young and T.M. Armstrong, and each
of them, the proxy of the undersigned, each with power of substitution, to vote
all shares which the undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders of Angelica Corporation to be held on May
29, 1996, and at any adjournment thereof; provided, however, that said shares
shall be voted as specified on the reverse side hereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. UNLESS OTHERWISE INDICATED ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE
NOMINEES LISTED; AND, UNLESS THE SHAREHOLDER GIVES OTHER INSTRUCTIONS, WILL BE
VOTED AGAINST ITEMS 2A AND 2B.
Date: _____________________, 1996
----------------------------------
----------------------------------
(SIGNATURE OF SHAREHOLDER(S))
(Please sign proxy exactly as name
appears hereon. Joint owners
should each sign personally.
Corporate proxies should be signed
by authorized officer. Executors,
administrators, trustees, etc.
should so indicate when signing.)
/ / Check here if you plan to
attend the Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE> 20
APPENDIX
Page 13 of the printed Proxy contains a Performance Graph. The
information contained in the graph is depicted in the table that
immediately follows.
