<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the Fiscal Year Ended January 27, 1996
Commission File Number 1-5674
-----------------
ANGELICA CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 43-0905260
(State or other jurisdiction of (I.R.S. Employer Identification No.
incorporation or organization)
424 South Woods Mill Road 63017-3406
Chesterfield, Missouri (Zip Code)
(Address of principal executive offices)
(314) 854-3800
Registrant's telephone number, including area code
--------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------------------------- --------------------
Common Stock, $1.00 Par Value New York Stock Exchange
Preferred Stock Purchase Rights issuable pursuant to
Registrant's Shareholder Protection Rights Plan New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No----
------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
------
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant. The aggregate market value shall be computed by reference
to the price at which the stock was sold, or the average bid and asked prices
of such stock, as of a specified date within 60 days prior to the date of
filing.
$191,539,682 April 5, 1996
- ------------------- -------------------------------
Value Date of Valuation
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of April 5, 1996.
Common Stock, $1.00 par value, 9,157,420 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
1) Portions of the Annual Report to Shareholders for year ended 1/27/96 are
incorporated in Parts I, II & IV; 2) Portions of the Proxy Statement dated
4/16/96 are incorporated in Part III.
<PAGE> 2
PART I
------
Item 1. Business
- -----------------
GENERAL DEVELOPMENT OF BUSINESS
Angelica Corporation (the "Company") and its subsidiaries provide products
and services to a wide variety of institutions and individuals, which are in
primarily three markets: health services, hospitality and other service
industries. The Company was founded in 1878 and was incorporated as Angelica
Corporation in 1968.
The Company's businesses are reported in three industry segments: Textile
Services (formerly referred to as "Rental Services"), Manufacturing and
Marketing and Retail Sales. Information about the Company's industry
segments appears on page 27 of the Company's Annual Report to Shareholders
for the year ended January 27, 1996 and is incorporated herein by reference.
This information includes for each segment sales and textile service
revenues, earnings, identifiable assets, depreciation and capital additions
for each of the five years in the period ended January 27, 1996.
Textile Services
- ----------------
This segment has 35 plants generally in or near major metropolitan areas in
the United States principally providing textile rental and laundry services
for health care institutions, presently servicing approximately 960
institutions with approximately 152,000 beds. This segment also provides
general linen services in selected areas, principally to hotels, casinos,
motels and restaurants.
The markets in which the Textile Services segment operates are very
competitive, being characterized by a large number of independent,
privately-owned competitors. Industry statistics are not available, but the
Company believes that its Textile Services segment constitutes the largest
supplier of textile rental and laundry services to health care institutions
in the United States. Competition is on the basis of quality, reliability
and price.
Manufacturing and Marketing
- ---------------------------
The Company's Manufacturing and Marketing operations consist of Angelica
Image Apparel (formerly referred to as the "Angelica Uniform Group") in the
United States and smaller operations in Canada and the United Kingdom,
collectively engaged in the manufacture and sale of uniforms and business
career apparel for a wide variety of institutions and businesses. The raw
materials used by Angelica Image Apparel in the conduct of its business
consist principally of textile piece goods, thread, and trimmings, such as
buttons, zippers and labels. The Company purchases piece goods from most
major United States manufacturers of textile products. These materials are
available from a number of sources.
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The Manufacturing and Marketing operations compete with more than four dozen
largely privately-owned firms, including divisions of larger corporations, in
the United States, Canada and England. Competition is also provided by local
firms in most major metropolitan areas. The nature and degree of competition
varies with the customer and market where it occurs. Industry statistics are
not available, but the Company believes that it is the leading supplier of
garments to hospitals, hotels and motels, and food service establishments and
one of the leading suppliers of uniforms to textile service suppliers in the
United States. Competition is extensive and is based on many factors,
including design, quality, consistency of product, delivery, price and
distribution.
Retail Sales
- ------------
The Retail Sales segment is a specialty retailer offering uniforms and duty
shoes primarily for nurses and other health care professionals through a
nationwide chain of 269 retail stores under the name of Life Uniform and Shoe
Shops, located primarily in malls and strip shopping centers.
The Company believes there are approximately 2,500 specialty retail stores in
the U.S., primarily privately-owned, offering merchandise comparable to that
offered by the Company's Retail Sales segment. In addition, such merchandise
is also offered by others, including many large apparel retailers. Retail
operations are conducted under highly competitive conditions in the local area
where each of the Company's stores is located, with competition being on the
basis of store location, merchandise selection and value. Industry statistics
are not available, but the Company believes its Retail Sales segment is the
nation's largest specialty retailer offering uniforms and duty shoes to nurses
and other health care professionals.
Additional Information
- ----------------------
The Company does not hold any material patents, licenses, franchises or
concessions. It does not consider its business to be seasonal to any
significant extent. The Manufacturing and Marketing business is characterized
by high working capital requirements in the form of inventories required to
satisfy the prompt delivery requirements of its customers. Otherwise, the
Company has no unusual working capital requirements. No segment of the
Company's business is dependent on a single customer or a few customers.
Since the bulk of the Company's sales are to institutional users which buy on
a regular recurring basis, the Company's backlog of orders at any given time
consists principally of firm orders in the process of being filled and is not
considered significant to the Company's business. No portion of the
Company's business is subject to renegotiation of profits or termination of
contracts at the election of the government.
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<PAGE> 4
Research and Development
- ------------------------
Angelica Image Apparel carries on research, development and testing programs
both internally and in cooperation with independent laboratories and research
institutions, and works with suppliers to develop specialized fabrics to
improve performance and to meet specific technological requirements. The
dollar amount spent is not significant.
Environmental Considerations
- ----------------------------
The Company does not expect any material expenditures will be required in
order to comply with any Federal, state or local environmental regulations.
Employees
- ---------
The Company employs approximately 9,700 persons (including approximately 820
part-time employees).
Financial Information About Foreign and Domestic Operations and
Export Sales
- ---------------------------------------------------------------
The information required by this Item is hereby incorporated by reference to
Note 10 of "Notes to Consolidated Financial Statements" appearing on page 27
of the Company's Annual Report to Shareholders for the year ended January 27,
1996.
Item 2. Properties
- -------------------
The Company's real estate, both owned and leased, which is used in its
Manufacturing and Marketing segment, at January 27, 1996 was comprised of 19
manufacturing plants in the United States, one plant in Costa Rica, and one
plant in Great Britain, plus appropriate warehouses and sales facilities in
the United States, Canada and the United Kingdom. As of January 27, 1996, 35
laundries plus warehouse facilities located in 16 states were used in the
Textile Services segment, and 269 retail specialty stores located in 36
states were used in the Retail Sales segment. In the opinion of the Company,
all such facilities are maintained in good condition and are adequate and
suitable for the purposes for which they are used. The manufacturing
facilities are normally fully utilized and operate generally on a one-shift
basis. Laundry facilities generally are not fully utilized, although some of
them operate on a multi-shift basis. The Company estimates that output of
these facilities could be increased by 20 percent with existing equipment by
working longer hours and by an additional 25 percent (for a total of 45
percent) by working longer hours plus installation of additional equipment.
As a part of the restructuring plan adopted in January, 1996, the Company
plans, over the next twelve months, to close certain of its laundries and to
transfer the volumes being processed in those plants to other of the
Company's laundries, thereby achieving economies of scale and greater
efficiencies in operation. In addition, as part of the plan certain
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<PAGE> 5
other laundries will be replaced by the construction of new facilities nearby.
A substantial portion of the real estate utilized by the Company is leased.
Capitalized leases, primarily utilized by the Manufacturing and Marketing
segment, represent approximately 1% of the net book value of all fixed assets
at January 27, 1996. No difficulty in renewing leases which expire in the
near future is anticipated by the Company.
Real estate which is owned by the Company is approximately 50% of the net
book value of all fixed assets. There is no individual parcel of real estate
owned or leased which is of material significance to the Company's total
assets.
Item 3. Legal Proceedings
- --------------------------
The Company is not a party, and none of its property is subject, to any
material pending legal proceeding other than ordinary routine litigation
incidental to the business. Management believes that liabilities, if any,
resulting from pending routine litigation in the ordinary course of the
Company's business should not materially affect the financial condition or
operations of the Company.
Item 4. Submission of Matters to Vote of Security Holders
- ----------------------------------------------------------
No matters were submitted to a vote of shareholders during the fourth quarter
of the Company's year ended January 27, 1996.
Executive Officers of the Registrant
- ------------------------------------
<TABLE>
<CAPTION>
Present Position (and Year First
Prior Offices During Past Elected As
Name Five Years) <F1> <F2> An Officer Age
---- ----------------------------- ---------- ---
<S> <C> <C> <C>
Lawrence J. Young <F3> Chairman of the Board, 1975 51
President, Chief Executive
Officer and Director;
President, Angelica Image
Apparel, a division of Angelica
Corporation
Theodore M. Armstrong Senior Vice President- 1986 56
Finance and Administration
and Chief Financial Officer
John S. Aleman Vice President-Human Resources 1985 60
Jill Witter Vice President, General Counsel 1985 41
and Secretary
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<PAGE> 6
L. Linden Mann Controller and Assistant 1978 56
Secretary
Thomas M. Degnan <F4> Treasurer 1993 40
Michael E. Burnham <F5> Vice President; President, 1993 44
Life Uniform and Shoe Shops,
subsidiaries of Angelica
Corporation
Alan D. Wilson<F6> Vice President; President, 1995 53
Angelica Healthcare Services
Group, subsidiaries of
Angelica Corporation
<FN>
<F1> Except as set forth below, the principal occupations of the officers
throughout the past five years have been the performance of the functions
of the offices shown above.
<F2> All officers serve at the pleasure of the Board of Directors.
<F3> In addition to being Chairman of the Board, Chief Executive Officer and
President of the Company, Lawrence J. Young has been President of Angelica
Image Apparel, a division of Angelica Corporation, since March 12, 1996.
<F4> Thomas M. Degnan has been Treasurer of the Company since March 30,
1993. He was Assistant Treasurer from May 23, 1989 to March 30, 1993.
<F5> Michael E. Burnham has been a Vice President of the Company since May
25, 1993 and President of Life Uniform and Shoe Shops since August 1,
1990.
<F6> Alan D. Wilson has been a Vice President of the Company and
President of Angelica Healthcare Services Group since March 15, 1995.
Prior to that he was, and continues to be, President of the Eastern Rental
Division of Angelica Healthcare Services Group.
</TABLE>
None of the executive officers of the Company are related to each other.
There are no arrangements or understandings between any executive officer of
the Company and any other person pursuant to which such officer was selected.
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<PAGE> 7
PART II
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Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
- ------------------------------------------------------------------------------
The information required by this item is included under the caption "Common
Stock Data" on page 29 of the Company's Annual Report to Shareholders for the
year ended January 27, 1996 (hereinafter "Annual Report") and is incorporated
herein by reference. The number of shareholders of record was 1,569 at April
5, 1996. The Company's Board of Directors regularly reviews the dividends
paid, and the Company expects to continue to pay dividends. However, there
can be no assurance that dividends will be paid in the future since they are
dependent on earnings, the financial condition of the Company and other
factors.
Item 6. Selected Financial Data
- --------------------------------
The information required by this item is included under the caption
"Financial Summary-11 Years" on pages 30 and 31 of the Company's Annual
Report and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
- ----------------------------------------------------------
Condition and Results of Operations
- -----------------------------------
The information required by this item is included in the text contained under
the caption "Financial Review" on pages 17 and 18 of the Company's Annual
Report and is incorporated herein by reference. The Company does not believe
the effects of inflation and changing prices have been, or will be, material
to the Company's results of operations. The Company believes that it is not
affected by inflation except to the extent that the economy in general is
affected thereby.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The information required by this item appears on pages 19 through 28 of the
Company's Annual Report and is incorporated herein by reference. The
financial statement schedule listed at Item 14(a)(2) is incorporated herein
by reference.
Item 9. Changes in and Disagreements With Accountants on
- ---------------------------------------------------------
Accounting and Financial Disclosure
- -----------------------------------
Not Applicable.
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<PAGE> 8
PART III
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Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
Information with respect to Directors of the Company under the captions
"Information About Nominees for Directors" and "Information About Directors
Continuing in Office," on page 3 of the Company's Proxy Statement for the
Annual Meeting of Shareholders to be held on May 29, 1996 (hereinafter "Proxy
Statement") is incorporated herein by reference. Information with respect to
executive officers of the Company appears under the caption "Executive
Officers of the Registrant" on pages 4 and 5 of Part I of this Form 10-K.
Item 11. Executive Compensation
- --------------------------------
Information with respect to executive compensation under the captions
"Compensation of Directors and Other Information Concerning the Board and its
Committees" on pages 3 and 4, "Summary Compensation Table" on page 7, "Option
Grants in Last Fiscal Year" on page 8, "Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Values" on page 9, "Employment
Contracts and Termination of Employment and Change-In-Control Arrangements"
on pages 9 and 10, and "Pension Plan" on page 12 of the Company's Proxy
Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
Information with respect to security ownership of certain beneficial owners
and management under the caption "Beneficial Ownership of the Company's
Securities" on pages 5 and 6 of the Company's Proxy Statement is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
Not applicable.
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<PAGE> 9
PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Report
(a) Document List Page
------------- --------------
<S> <C>
1. Financial Statements
--------------------
The following financial statements are
incorporated by reference herein and in
Item 8 above from the Company's Annual Report
to Shareholders for the year ended
January 27, 1996:
(i) Consolidated Statements of Income - 19
Years ended January 27, 1996,
January 28, 1995, and January
29, 1994
(ii) Consolidated Balance Sheets - January 20
27, 1996 and January 28, 1995
(iii) Consolidated Statements of Share- 21
holders' Equity - Years ended
January 27, 1996, January 28, 1995,
and January 29, 1994
(iv) Consolidated Statements of Cash Flows- 22
Years ended January 27, 1996, January 28,
1995, and January 29, 1994
(v) Notes to Consolidated Financial State- 23-28
ments
(vi) Report of Independent Public 29
Accountants
</TABLE>
-8-
<PAGE> 10
2. Supplementary Data and Financial Statement Schedule
---------------------------------------------------
(i) The supplementary data entitled "Unaudited Quarterly
Financial Data" is incorporated by reference herein and in
Item 8 above from page 28 of the Company's Annual Report to
Shareholders for the year ended January 27, 1996.
(ii) The following financial statement schedule is submitted as a
separate section of this report beginning at page 13:
Schedule II - Valuation and Qualifying Accounts - For the
Three Years Ended January 27, 1996
All other schedules are not submitted because they are not applicable or not
required or because the information is included in the financial statements
or notes thereto.
(iii) Report of Independent Public Accountants on Schedule II
appears at page 12 of the Form 10-K.
3. Exhibits
--------
See Exhibit Index on pages 14-17 hereof for a list of all
management contracts, compensatory plans and arrangements
required by this item (Exhibit Nos. 10.1 through 10.23) and all
other Exhibits filed or incorporated by reference as a part of
this report.
(b) Reports on Form 8-K
-------------------
The Registrant filed no reports on Form 8-K during the last quarter of
the year ended January 27, 1996.
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<PAGE> 11
Other Matters
- -------------
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990), under the Securities Act of 1933, as amended,
the undersigned registrant hereby undertakes as follows, which undertaking is
hereby incorporated by reference into registrant's Registration Statements on
Form S-8 Nos. 33-5524 (filed May 8, 1986), 33-22850 (filed June 29, 1988),
2-77932 (filed June 9, 1982), 2-97291 (filed April 25, 1985), and 33-625
(filed October 3, 1985):
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
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<PAGE> 12
SIGNATURE
---------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized.
ANGELICA CORPORATION
------------------------
(Registrant)
By: /s/ L. J. Young
--------------------------
L.J. Young
Chairman of the Board,
President and Chief Executive
Officer (Principal Executive
Officer)
Date: April 23, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
By: /s/ T. M. Armstrong By: /s/ L. Linden Mann
---------------------------- ------------------------------
T. M. Armstrong L. Linden Mann
Senior Vice President- Controller
Finance and Administration (Principal Accounting Officer)
Chief Financial Officer
(Principal Financial Officer)
Earle H. Harbison, Jr. <F*> Lee M. Liberman <F*>
- ---------------------------------- ------------------------------
(Earle H. Harbison, Jr.) (Lee M. Liberman)
Director Director
Leslie F. Loewe <F*> Martin Sneider <F*>
- ---------------------------------- ------------------------------
(Leslie F. Loewe) (Martin Sneider)
Director Director
Elliot H. Stein <F*> William P. Stiritz <F*>
- ---------------------------------- ------------------------------
(Elliot H. Stein) (William P. Stiritz)
Director Director
H. Edwin Trusheim <F*>
- ----------------------------------
(H. Edwin Trusheim)
Director
By his signature below, L.J. Young has signed this Form 10-K on behalf of
each person named above whose name is followed by an asterisk, pursuant to
power of attorney filed with this Form 10-K.
/s/ L.J. Young
--------------------------------------
L.J. Young, as attorney-in-fact
Date: April 23, 1996
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<PAGE> 13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Angelica Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in the Annual Report to
Shareholders of Angelica Corporation and subsidiaries incorporated by
reference in this Form 10-K, and have issued our report thereon dated March
12, 1996. Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item 14(a)2(ii) and
appearing on page 13 is the responsibility of the Corporation's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in
our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated
financial statements taken as a whole.
/s/ Arthur Andersen LLP
-------------------------------------
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
March 12, 1996
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<PAGE> 14
Schedule II
<TABLE>
ANGELICA CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED JANUARY 27, 1996
(In Thousands)
-----------------------------------------------
<CAPTION>
Balance at Charged Balance
Beginning to Costs at End of
Description of Period and Expenses Deductions <Fa> Period
- ----------- ---------- ------------ --------------- ---------
<S> <C> <C> <C> <C>
Reserve for doubtful
accounts - deducted
from receivables in
the balance sheet
<CAPTION>
YEAR ENDED JANUARY 27, 1996
---------------------------
<S> <C> <C> <C> <C>
$2,699 $1,331 $1,343 $2,687
------ ------ ------ ------
<CAPTION>
YEAR ENDED JANUARY 28, 1995
---------------------------
<S> <C> <C> <C> <C>
$2,630 $1,622 $1,553 $2,699
------ ------ ------ ------
<CAPTION>
YEAR ENDED JANUARY 29, 1994
---------------------------
<S> <C> <C> <C> <C>
$3,386 $ 778 $1,534 $2,630
------ ------ ------ ------
<FN>
<Fa> Doubtful accounts written off against reserve provided, net of
recoveries.
</TABLE>
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<PAGE> 15
<TABLE>
EXHIBIT INDEX
- -------------
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<FN>
<F*>Asterisk indicates exhibits filed herewith.
<F**>Management contract or compensatory plan incorporated by
reference from the document listed.
<C> <S>
3.1 Restated Articles of Incorporation of the Company, as currently
in effect. Said Articles were last filed as and are
incorporated herein by reference to Exhibit 3.1 to the Form
10-K for the fiscal year ended 1/26/91.
3.2 Current By-Laws of the Company, as last amended May 24, 1994.
Said By-Laws were last filed as and are incorporated herein by
reference to Exhibit 3.2 to the Form 10-K for the fiscal year
ended 1/28/95.
4.1 Shareholder Protection Rights Plan. Filed as Registration
Statement on Form 8-A dated August 24, 1988 and incorporated
herein by reference.
4.2 10.3% and 9.76% Senior Notes to insurance company due annually
to 2004, together with Note Facility Agreement. Filed as and
incorporated herein by reference to Exhibit 4.2 to the Form
10-K for the fiscal year ended 1/27/90.
4.3 9.15% Senior Notes to insurance companies due December 31, 2001,
together with Note Agreements and First Amendment thereto.
Filed as and incorporated herein by reference to Exhibit 4.3 to
the Form 10-K for the fiscal year ended 2/1/92.
4.4 8.225% Senior Notes to Nationwide Life Insurance Company,
American United Life Insurance Company, Aid Association for
Lutherans, and Modern Woodmen of America due May 1, 2006,
together with Note Agreement. Filed as and incorporated herein
by reference to Exhibit 4.4 to the Form 10-Q for the fiscal
quarter ended July 29, 1995.
4.5 Uncommitted Shelf Agreement dated March 1, 1996 for Senior Notes
to insurance company, together with Amendment Agreement No. 1
to Note Facility Agreement referred to in Exhibit 4.2 above.<F*>
4.6 Term Loan Agreement between Angelica Corporation and The First
National Bank of Boston dated as of October 2, 1995.<F*>
Note: No other long-term debt instrument issued by the
Registrant exceeds 10% of the consolidated total assets of the
Registrant and its subsidiaries. In
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<PAGE> 16
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<C> <S>
accordance with Item 601(b) (4) (iii) (A) of Regulation S-K, the
Registrant will furnish to the Commission upon request copies of
long-term debt instruments and related agreements.
10.1 Angelica Corporation 1994 Performance Plan (as amended 1/31/95)
- Form 10-K for fiscal year ended 1/28/95, Exhibit 10.1.<F**>
10.2 Retirement Benefit Agreement between the Company and Alan D.
Wilson dated August 25, 1987 - Form 10-K for fiscal year ended
1/28/95, Exhibit 10.2.<F**>
10.3 Form of Participation Agreement for the Angelica Corporation
Management Retention and Incentive Plan with attachment setting
out officers covered under such agreements and the "Benefit
Multiple" listed for each - Form 10-K for fiscal year ended
1/30/93, Exhibit 10.3.<F**>
10.4 Angelica Corporation Stock Option Plan (As amended November 29,
1994)-Form 10-K for fiscal year ended 1/28/95, Exhibit 10.7.<F**>
10.5 Angelica Corporation Stock Award Plan - Form 10-K for fiscal year
ended 2/1/92, exhibit 10.<F**>
10.6 Angelica Corporation Retirement Savings Plan, as amended and
restated - Form 10-K for fiscal year ended 1/27/90, exhibit
19.3, incorporating all amendments thereto through the date of
this filing.<F**>
10.7 Supplemental Plan - Form 10-K for fiscal year ended 1/27/90,
exhibit 19.10, incorporating all amendments thereto through the
date of this filing.<F**>
10.8 Incentive Compensation Plan (restated) - Form 10-K for fiscal
year ended 1/27/90, exhibit 19.11.<F**>
10.9 Deferred Compensation Option Plan for Selected Management
Employees - Form 10-K for fiscal year ended 1/26/91, exhibit
19.9, incorporating all amendments thereto filed through the
date of this filing.<F**>
10.10 Deferred Compensation Option Plan for Directors - Form 10-K for
fiscal year ended 1/26/91, exhibit 19.8, incorporating all
amendments thereto filed through the date of this filing.<F**>
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<PAGE> 17
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<C> <S>
10.11 Supplemental and Deferred Compensation Trust - Form 10-K for
fiscal year ended 2/1/92, exhibit 19.5.<F**>
10.12 Management Retention Trust - Form 10-K for fiscal year ended
2/1/92, exhibit 19.4.<F**>
10.13 Performance Shares Plan for Selected Senior Management(restated)
- Form 10-K for fiscal year ended 1/26/91, exhibit 19.3.<F**>
10.14 Management Retention and Incentive Plan (restated) - Form 10-K
for fiscal year ended 1/26/91, exhibit 19.1.<F**>
10.15 Non-Employee Directors Stock Plan - Form 10-K for fiscal year
ended 1/27/90, exhibit 10.3, incorporating all amendments
thereto through the date of this filing.<F**>
10.16 Restated Deferred Compensation Plan for Non-Employee Directors
- Form 10-K for fiscal year ended 1/28/84, exhibit 10 (v),
incorporating all amendments thereto through the date of this
filing.<F**>
10.17 Restated Angelica Corporation Stock Bonus and Incentive Plan
(Incorporating Amendments Adopted Through October 25, 1994) -
Form 10-K for fiscal year ended 1/28/95, Exhibit 10.20,
incorporating all amendments thereto through the date of this
filing.<F**>
10.18 Angelica Corporation Pension Plan as Amended and Restated -
Form 10-K for fiscal year ended 1/26/91, exhibit 19.7,
incorporating all amendments thereto through the date of this
filing.<F**>
10.19 Angelica Corporation 1994 Non-Employee Directors Stock Plan,
incorporated by reference to Appendix A of the Company's Proxy
Statement for the Annual Meeting of Shareholders held on May
23, 1995.<F**>
10.20 Specimen form of Stock Option Agreement under the Angelica
Corporation Stock Option Plan.<F*>
10.21 Specimen form of Stock Option Agreement under the Angelica
Corporation 1994 Performance Plan.<F*>
10.22 Sixth Amendment to Angelica Corporation Pension Plan (As
Restated April 1, 1989), dated February 27, 1996. The last
amendment thereto was filed as Exhibit 10.26 to Form 10-K for
the fiscal year ended 1/28/95.<F*>
-16-
<PAGE> 18
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<C> <S>
10.23 Amendment to Restated Angelica Corporation Stock Bonus and
Incentive Plan, dated March 28, 1996.<F*>
13 Certain portions of the Annual Report to Shareholders for the
fiscal year ended January 27, 1996, which have been
incorporated by reference<F*>
21 Subsidiaries<F*>
23 Consent of Independent Public Accountants<F*>
24 Power of Attorney<F*>
27 Financial Data Schedule<F*>
99.1 Annual Report on Form 11-K for the Angelica Corporation
Retirement Savings Plan.<F*>
99.2 Annual Report on Form 11-K for the Angelica Corporation
Collinwood 401(k) Plan.<F*>
99.3 Annual Report on Form 11-K for the Angelica Corporation Savannah
401(k) Plan.<F*>
99.4 Annual Report on Form 11-K for the Angelica Corporation Missouri
Plants 401(k) Plan.<F*>
99.5 Annual Report on Form 11-K for the Angelica Corporation Tax
Credit Employee Stock Ownership Plan ("PAYSOP Plan").<F*>
</TABLE>
The Company will furnish to any record or beneficial shareholder requesting a
copy of this Annual Report on Form 10-K a copy of any exhibit indicated in
the above list as filed with this Annual Report on Form 10-K upon payment to
it of its expenses in furnishing such exhibit.
-17-
<PAGE> 1
- -------------------------------------------------------------------------------
ANGELICA CORPORATION
$50,000,000
UNCOMMITTED SHELF AGREEMENT
Dated as of March 1, 1996
- -------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
(Not Part of Agreement)
<CAPTION>
Page
----
<S> <C>
1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES. . . . . . . . . . . . . . . . 2
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . 8
4. PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . 10
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . 11
6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 14
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 19
8. REPRESENTATIONS, COVENANTS
AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . 24
9. REPRESENTATIONS OF THE PURCHASERS . . . . . . . . . . . . 29
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 29
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 39
INFORMATION SCHEDULE . . . . . . . . . . . . . . . . . . . . . 47
EXHIBIT A -- FORM OF NOTE. . . . . . . . . . . . . . . . . .A-1
EXHIBIT B -- FORM OF REQUEST FOR PURCHASE. . . . . . . . . .B-1
EXHIBIT C -- FORM OF CONFIRMATION OF ACCEPTANCE. . . . . . .C-1
EXHIBIT D -- FORM OF OPINION OF COMPANY'S COUNSEL. . . . . .D-1
EXHIBIT E -- LIST OF AGREEMENTS RESTRICTING DEBT . . . . . .E-1
SCHEDULE 6B(1)--EXISTING LIENS
</TABLE>
<PAGE> 3
ANGELICA CORPORATION
424 SOUTH WOODS MILL ROAD
CHESTERFIELD, MO 63017
As of March 1, 1996
To: THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA (HEREIN CALLED "PRUDENTIAL")
Each Prudential Affiliate (as hereinafter defined)
which becomes bound by certain provisions of this
Agreement as hereinafter provided (together with
Prudential, the "PURCHASERS")
c/o Prudential Capital Group
Four Gateway Center 100 Mulberry street
Newark, New Jersey 07102-4082
Ladies and Gentlemen:
The undersigned, Angelica Corporation (herein
called the "COMPANY"), hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company
will authorize the issue of its senior promissory notes
(herein called the "NOTES") in the aggregate principal
amount of $50,000,000 , to be dated the date of issue
thereof, to mature, in the case of each Note so issued, no
more than 15 years after the date of original issuance
thereof, to have an average life, in the case of each Note
so issued, of no more than 12 years after the date of
original issuance thereof, to bear interest on the unpaid
balance thereof from the date thereof at the rate per annum,
and to have such other particular terms, as shall be set
forth, in the case of each Note so issued, in the
Confirmation of Acceptance with respect to such Note
delivered pursuant to paragraph 2F, and to be substantially
in the form of Exhibit A attached hereto. The term "NOTES"
---------
as used herein shall include each Note delivered pursuant to
any provision of this Agreement and each Note delivered in
substitution or exchange for any such Note pursuant to any
such provision. Notes which have (i) the same final
-
maturity, (ii) the same
--
<PAGE> 4
installment payment dates, (iii) the same installment
---
payment amounts (as a percentage of the original principal
amount of each Note), (iv) the same interest rate, and (v)
-- -
the same interest payment periods, are herein called a
"SERIES" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. FACILITY. Prudential is willing to consider,
in its sole discretion and within limits which may be
authorized for purchase by Prudential and Prudential
Affiliates from time to time, the purchase of Notes pursuant
to this Agreement. The willingness of Prudential to
consider such purchase of Notes is herein called the
"FACILITY". At any time, the aggregate principal amount of
Notes stated in paragraph 1, minus the aggregate principal
-----
amount of Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal
amount of Accepted Notes (as hereinafter defined) which have
not yet been purchased and sold hereunder prior to such
time, plus the aggregate principal amount of Notes purchased
----
and sold pursuant to this Agreement and thereafter retired
prior to such time (to the extent that the Company shall
have agreed with Prudential to reinstate the Facility with
respect to such amount), is herein called the "AVAILABLE
FACILITY AMOUNT" at such time. Notwithstanding the
willingness of Prudential to consider purchases of Notes,
this Agreement is entered into on the express understanding
that neither Prudential nor any Prudential Affiliate shall
be obligated to make or accept offers to purchase Notes, or
to quote rates, spreads or other terms with respect to
specific purchases of Notes, and the Facility shall in no
way be construed as a capital commitment by Prudential or
any Prudential Affiliate. Until the Company has accepted an
interest rate quote pursuant to paragraph 2F, the Company
shall not be obligated to issue any Notes under the
Facility.
2B. ISSUANCE PERIOD. Notes may be issued and
sold pursuant to this Agreement until the earlier of (i) the
-
second anniversary of the date of this Agreement (or if such
anniversary is not a Business Day, the Business Day next
preceding such anniversary) and (ii) the thirtieth day after
--
Prudential shall have given to the Company, or the Company
shall have given to Prudential, a notice stating that it
elects to terminate the issuance and sale of Notes pursuant
to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth
day). The period during which Notes may be issued and sold
pursuant to this Agreement is herein called the "ISSUANCE
PERIOD".
2
<PAGE> 5
2C. PERIODIC SPREAD INFORMATION. Provided there
is no Default or Event of Default, not later than 9:30 A.M.
(New York City local time) on a Business Day during the
Issuance Period if there is an Available Facility Amount on
such Business Day, the Company may request by telecopier or
telephone, and within a reasonable time after such request,
Prudential will, to the extent reasonably practicable,
provide to the Company on such Business Day (or, if such
request is received after 9:30 A.M. (New York City local
time) on such Business Day, on the following Business Day),
information (by telecopier or telephone) with respect to
various spreads at which Prudential or Prudential Affiliates
might be interested in purchasing Notes of different average
lives; provided, however, that the Company may not make such
-------- -------
requests more frequently than once in every five Business
Days or such other period as shall be mutually agreed to by
the Company and Prudential. The amount and content of
information so provided shall be in the sole discretion of
Prudential but it is the intent of Prudential to provide
information which will be of use to the Company in
determining whether to initiate procedures for use of the
Facility. Information so provided shall not constitute an
offer to purchase Notes, and neither Prudential nor any
Prudential Affiliate shall be obligated to purchase Notes at
the spreads specified. Information so provided shall be
representative of potential interest only for the period
commencing on the day such information is provided and
ending on the earlier of the fifth Business Day after such
day and the first day after such day on which further spread
information is provided. Prudential may suspend or
terminate providing information pursuant to this paragraph
2C if, in its sole discretion, it determines that there has
been an adverse change in the credit quality of the Company
after the date of this Agreement.
2D. REQUEST FOR PURCHASE. The Company may from
time to time during the Issuance Period make requests for
purchases of Notes (each such request being herein called a
"REQUEST FOR PURCHASE"). Each Request for Purchase shall be
made to Prudential by telecopier and confirmed by nationwide
overnight delivery service, and shall (i) specify the
-
aggregate principal amount of Notes covered thereby, which
shall not be less than $10,000,000 and not be greater than
the Available Facility Amount at the time such Request for
Purchase is made, (ii) specify the principal amounts, final
--
maturities, principal prepayment dates and amounts and
interest payment periods (quarterly or semi-annual in
arrears) of the Notes covered thereby, (iii) specify the use
---
of proceeds of such Notes, (iv) specify the proposed day for
--
the closing of the purchase and sale of such Notes, which
shall be a Business Day during the Issuance Period not less
than 10 days and not more than 25 days after the making of
such Request for Purchase, (v)
-
3
<PAGE> 6
specify the number of the account and the name and address
of the depository institution to which the purchase prices
of such Notes are to be transferred on the Closing Day for
such purchase and sale, (vi) certify that the
--
representations and warranties contained in paragraph 8 are
true on and as of the date of such Request for Purchase
except to the extent of changes caused by the transactions
herein contemplated and that there exists on the date of
such Request for Purchase no Event of Default or Default,
and (vii) be substantially in the form of Exhibit B attached
--- ---------
hereto. Each Request for Purchase shall be in writing and
shall be deemed made when received by Prudential.
2E. RATE QUOTES. Not later than three Business
Days after the Company shall have given Prudential a Request
for Purchase pursuant to paragraph 2D, Prudential may
provide (by telephone promptly thereafter confirmed by
telecopier, in each case no earlier than 9:30 A.M. and no
later than 1:00 P.M. New York City local time) interest rate
quotes for the several principal amounts, maturities,
installment payment schedules, and interest payment periods
of Notes specified in such Request for Purchase. Each quote
shall represent the interest rate per annum payable on the
outstanding principal balance of such Notes until such
balance shall have become due and payable, at which
Prudential or a Prudential Affiliate would be willing to
purchase such Notes at 100% of the principal amount thereof.
2F. ACCEPTANCE. Within 30 minutes after
Prudential shall have provided any interest rate quotes
pursuant to paragraph 2E or in the event that due to
conditions in the market place it shall not be feasible to
hold such interest rate quotes open 30 minutes, such shorter
period as Prudential may specify to the Company (such period
herein called the "ACCEPTANCE WINDOW"), the Company may,
subject to paragraph 2G, elect to accept such interest rate
quotes as to not less than $10,000,000 aggregate principal
amount of the Notes specified in the related Request for
Purchase. Such election shall be made by an Authorized
Officer of the Company notifying Prudential by telephone or
telecopier within the Acceptance Window (but not earlier
than 9:30 A.M. or later than 2:00 P.M., New York City local
time) that the Company elects to accept such interest rate
quotes, specifying the Notes (each such Note being herein
called an "ACCEPTED NOTE") as to which such acceptance
(herein called an "ACCEPTANCE") relates. The day the
Company notifies an Acceptance with respect to any Accepted
Notes is herein called the "ACCEPTANCE DAY" for such
Accepted Notes. Any interest rate quotes as to which
Prudential does not receive an Acceptance within the
Acceptance Window shall expire, and no purchase or sale of
Notes hereunder shall be made based on such expired interest
rate quotes. Subject
4
<PAGE> 7
to paragraph 2G and the other terms and conditions hereof,
the Company agrees to sell to Prudential or a Prudential
Affiliate, and Prudential agrees to purchase, or to cause
the purchase by a Prudential Affiliate of, the Accepted
Notes at 100% of the principal amount of such Notes. Prior
to the close of business on the Business Day next following
the Acceptance Day, the Company, Prudential and each
Prudential Affiliate which is to purchase any such Accepted
Notes will execute a confirmation of such Acceptance
substantially in the form of Exhibit C attached hereto
---------
(herein called a "CONFIRMATION OF ACCEPTANCE"). If the
Company should fail to execute and return to Prudential
within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted
Notes, Prudential may at its election and any time prior to
its receipt thereof, cancel the closing with respect to such
Accepted Notes by so notifying the Company in writing.
2G. MARKET DISRUPTION. Notwithstanding the
provisions of paragraph 2F, if Prudential shall have
provided interest rate quotes pursuant to paragraph 2E and
thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in
accordance with paragraph 2F there shall occur a general
suspension, material limitation, or significant disruption
of trading in securities generally on the New York Stock
Exchange or in the market for U.S. Treasury securities and
other financial instruments, then such interest rate quotes
shall expire, and no purchase or sale of Notes hereunder
shall be made based on such expired interest rate quotes.
If the Company thereafter notifies Prudential of the
Acceptance of any such interest rate quotes, such Acceptance
shall be ineffective for all purposes of this Agreement, and
Prudential shall promptly notify the Company that the
provisions of this paragraph 2G are applicable with respect
to such Acceptance
2H. CLOSING. Not later than 11:30 A.M. (New York
City local time) on the Closing Day for any Accepted Notes,
the Company will deliver to each Purchaser listed in the
Confirmation of Acceptance relating thereto at the offices
of Prudential Capital Group, 1201 Elm Street, Suite 4900,
Dallas, Texas, 75270, the Notes to be purchased by such
Purchaser in the form of a single Accepted Note for the
Accepted Notes which have exactly the same terms (or such
greater number of Notes in authorized denominations as such
Purchaser may request) dated the Closing Day and registered
in such Purchaser's name (or in the name of its nominee),
against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's
account specified in the Request for Purchase of such Notes.
If the Company fails to tender to any Purchaser the
5
<PAGE> 8
Accepted Notes to be purchased by such Purchaser on the
scheduled Closing Day for such Accepted Notes as provided
above in this paragraph 2H, or any of the conditions
specified in paragraph 3 shall not have been fulfilled by
the time required on such scheduled Closing Day, the Company
shall, prior to 1:00 P.M., New York City local time, on such
scheduled Closing Day notify such Purchaser in writing
whether (x) such closing is to be rescheduled (such
-
rescheduled date to be a Business Day during the Issuance
Period not less than one Business Day and not more than 30
Business Days after such scheduled Closing Day (the
"RESCHEDULED CLOSING DAY") and certify to such Purchaser
that the Company reasonably believes that it will be able to
comply with the conditions set forth in paragraph 3 on such
Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with paragraph 2I(2) or
(y) such closing is to be canceled as provided in paragraph
-
2I(3). In the event that the Company shall fail to give
such notice referred to in the preceding sentence, such
Purchaser may at its election, at any time after 1:00 P.M.,
New York City local time, on such scheduled Closing Day,
notify the Company in writing that such closing is to be
canceled as provided in paragraph 2I(3).
2I. FEES.
2I(1) FACILITY FEE -- The Company will pay to
Prudential in immediately available funds a fee (herein
called the "FACILITY FEE" on each Closing Day other than the
initial Closing Day, in an amount equal to 0.20% of the
aggregate principal amount of Notes sold on such Closing
Day.
2I(2) DELAYED DELIVERY FEE -- If the closing of
the purchase and sale of any Accepted Note is delayed for
any reason beyond the original Closing Day for such Accepted
Note, the Company will pay to Prudential on the last
Business Day of each calendar month, commencing with the
first such day to occur more than 30 days after the
Acceptance Day for such Accepted Note and ending with the
last such day to occur prior to the Cancellation Date or the
actual closing date of such purchase and sale, and on the
Cancellation Date or actual closing date of such purchase
and sale (if such Cancellation Date or closing date occurs
more than 30 days after the Acceptance Day for such Accepted
Note), a fee (herein called the "DELAYED DELIVERY FEE")
which Prudential would calculate as follows:
STEP 1. determine the semi-annual yield of the
Accepted Notes;
6
<PAGE> 9
STEP 2. determine the yield of the federal funds
rate (if the expected period of delay is
less than seven days) or the commercial
paper rate (if the expected delay is
seven days or more) closest to the
expected period of delay (a new yield
being determined each time a closing is
delayed);
STEP 3. subtract the short-term yield (Step 2)
from the Accepted Note yield (Step 1).
If the difference is a negative number,
no Delayed Delivery Fee would be due.
If the difference is a positive number,
then Prudential would;
STEP 4. multiply the amount (step 3) by the
number of days from the 31st day after
the Acceptance Day for the Accepted Note
to the date the purchase and sale of the
Accepted Note closes or is canceled
under paragraph 2H(3);
STEP 5. divide that amount (Step 4) by 360; and
STEP 6. multiply that amount (Step 5) by the
principal amount of the Accepted Notes.
The foregoing federal funds rate and commercial paper rate
reported by Telerate Systems, Inc. (or , if such data for
any reason ceases to be available through Telerate Systems,
Inc., any publicly available source of similar market data.)
Nothing contained herein shall obligate any Purchaser to
purchase any Accepted Note on any day other than the Closing
Day for such Accepted Note, as the same may be rescheduled
from time to time in compliance with paragraph 2H.
2I(3) CANCELLATION FEE -- If the Company at any
time notifies Prudential in writing that the Company is
canceling the closing of the purchase and sale of any
Accepted Note, or if Prudential notifies the Company in
writing under the circumstances set forth in the last
sentence of paragraph 2H that the closing of the purchase
and sale of such Accepted Note is to be canceled, or if the
closing of the purchase and sale of such Accepted Note is
not consummated on or prior to the last day of the Issuance
Period (the date of any such notification, or the last day
of the Issuance Period, as the case may be, being herein
called the "CANCELLATION
7
<PAGE> 10
DATE"), the Company will pay Prudential in immediately
available funds an amount (the "CANCELLATION FEE") which
Prudential would calculate as follows:
STEP 1. determine the BID price of a U.S.
Treasury Note with a duration closest to
that of the Accepted Notes, on the
Acceptance Day;
STEP 2. determine the ASK price of the same
Treasury Note on the Cancellation Date;
STEP 3. subtract the BID price (Step 1) from the
ASK price (Step 2);
STEP 4. divide the price increase (Step 3) by
the BID price (Step 1);
STEP 5. multiply that amount (Step 4) by the
principal amount of the Accepted Notes.
The foregoing bid and ask prices shall be as reported by
Telerate Systems, Inc. (or, if such data for any reason
ceases to be available through Telerate Systems, Inc., any
publicly available source of similar market data). Each
price shall be based on a U.S. Treasury security having a
par value of $100.00 and shall be rounded to the second
decimal place. In no case shall the Cancellation Fee be
less than zero.
3. CONDITIONS OF CLOSING. The obligation of any
Purchaser to purchase and pay for any Accepted Notes is
subject to the satisfaction, on or before the Closing Day
for such Accepted Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have
received the following, each dated the Closing Date:
(i) The Accepted Note(s) to be purchased by
such Purchaser.
(ii) Certified copies of the resolutions of
the Board of Directors of the Company approving this
Agreement and the Accepted Notes, and all documents
evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement and the Accepted Notes.
8
<PAGE> 11
(iii) A certificate of the Secretary or an
Assistant Secretary of the Company certifying the names
and true signatures of the officers of the Company
authorized to sign this Agreement and the Accepted
Notes and the other documents to be delivered
hereunder.
(iv) Certified copies of the Certificate of
Incorporation and By-laws of the Company.
(v) A favorable opinion of Jill Witter,
General Counsel of the Company, satisfactory to such
Purchaser and substantially in the form of Exhibit D
---------
attached hereto and as to such other matters as such
Purchaser may reasonably request. The Company hereby
directs each such counsel to deliver such opinion,
agrees that the issuance and sale of any Accepted Notes
will constitute a reconfirmation of such direction, and
understands and agrees that each Purchaser receiving
such an opinion will and is hereby authorized to rely
on such opinion.
(vi) A good standing certificate for the
Company from the Secretary of State of Missouri dated
of a recent date and such other evidence of the status
of the Company as you may reasonably request.
(vii) Additional documents or certificates
with respect to legal matters or corporate or other
proceedings related to the transactions contemplated
hereby as may be reasonably requested by such
Purchaser.
3B. OPINION OF PURCHASER'S COUNSEL. Such
Purchaser shall have received from Thomas P. Donahue,
Assistant General Counsel of Prudential or such other
counsel, who is acting as counsel for it in connection with
this transaction, a favorable opinion satisfactory to such
Purchaser as to such matters incident to the matters herein
contemplated as it may reasonably request.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT.
The representations and warranties contained in paragraph 8
shall be true on and as of such Closing Day, except to the
extent of changes caused by the transactions herein
contemplated; there shall exist on such Closing Day no Event
of Default or Default and no Default or Event of Default
would exist after the issuance of the Notes to be issued on
such Closing Day; and the Company shall have delivered to
such Purchaser an Officer's Certificate, dated such Closing
Day, to both such effects.
9
<PAGE> 12
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The
purchase of and payment for the Accepted Notes to be
purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such
Notes by the Company) shall not violate any applicable law
or governmental regulation (including, without limitation,
Section 5 of the Securities Act or Regulation G, T or X of
the Board of Governors of the Federal Reserve System) and
shall not subject such Purchaser to any tax, penalty,
liability or other onerous condition under or pursuant to
any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other
evidence as it may request to establish compliance with this
condition.
3E. LEGAL MATTERS. Counsel for such Purchaser,
including any special counsel for the Purchasers retained in
connection with the purchase and sale of such Accepted
Notes, shall be satisfied as to all legal matters relating
to such purchase and sale, and such Purchaser shall have
received from such counsel favorable opinions as to such
legal matters as it may request.
3F. PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident
thereto shall be satisfactory in substance and form to such
Purchaser, and it shall have received all such counterpart
originals or certified or other copies of such documents as
it may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to
prepayment only with respect to the required prepayments
specified in paragraph 4A and the optional prepayments
permitted by paragraph 4B.
4A. REQUIRED PREPAYMENTS. The Notes of each
Series shall be subject to required prepayments, if any, set
forth in the Notes of such Series. The principal amounts
specified, if any, in each Note of such Series and such
principal amount of such Notes, together with interest
thereon to the prepayment dates specified in such Notes,
shall become due on such prepayment dates. The remaining
principal amount of such Notes, together with interest
accrued thereon, shall become due on the maturity date of
such Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE
AMOUNT. The Notes of each Series shall be subject to
prepayment, in whole at any time or from time to time in
part (in multiples of $1,000,000), at the option of the
Company, at 100% of the principal amount so prepaid plus
interest
10
<PAGE> 13
thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company
shall give the holder of each Note to be prepaid pursuant to
paragraph 4B irrevocable written notice of such prepayment
not less than 10 Business Days prior to the prepayment date,
specifying such prepayment date, specifying the aggregate
principal amount of the Notes of the same Series as such
Note to be prepaid on such date, identifying each Note held
by such holder, and the principal amount of each such Note,
to be prepaid on such date and stating that such prepayment
is to be made pursuant to paragraph 4B. Notice of
prepayment having been given as aforesaid, the principal
amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with
the Yield-Maintenance Amount, if any, herein provided, shall
become due and payable on such prepayment date. The Company
shall, on or before the day on which it gives written notice
of any prepayment pursuant to paragraph 4B, give telephonic
notice of the principal amount of the Notes to be prepaid
and the prepayment date to each Significant Holder which
shall have designated a recipient for such notices in the
Information Schedule attached hereto or by notice in writing
to the Company.
4D. APPLICATION OF PREPAYMENTS. In the case of
each prepayment of Notes of any Series pursuant to paragraph
4A or 4B, the amount to be prepaid shall be applied pro rata
to all outstanding Notes of such Series according to the
respective unpaid principal amounts thereof. The amounts so
prepaid on each outstanding Note of such Series so prepaid
shall be credited against the last maturing installment or
installments of principal then remaining unpaid on such
Note.
4E. RETIREMENT OF NOTES. The Company shall not,
and shall not permit any of its Subsidiaries or Affiliates
to, prepay or otherwise retire in whole or in part prior to
their stated installment or final maturities (other than by
prepayment pursuant to paragraph 4A or 4B or upon
acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder.
5. AFFIRMATIVE COVENANTS. During the Issuance
Period and so long as any Note shall remain unpaid, the
Company covenants that:
5A. FINANCIAL STATEMENTS. The Company will
deliver to each Significant Holder in triplicate:
11
<PAGE> 14
(i) as soon as practicable and in any event
within 60 days after the end of each quarterly
period (other than the last quarterly period) in
each fiscal year, consolidated statements of
income and cash flows of the Company and its
Subsidiaries for the period from the beginning of
the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet
of the Company and its Subsidiaries as at the end
of such quarterly period, setting forth in each
case in comparative form figures for the
corresponding period in the preceding fiscal year,
all in reasonable detail and certified by an
authorized financial officer of the Company,
subject to changes resulting from year-end
adjustments;
(ii) as soon as practicable and in any event
within 120 days after the end of each fiscal year,
consolidated statements of income, shareholders'
equity and cash flows of the Company and its
Subsidiaries for such year, and a consolidated
balance sheet of the Company and its Subsidiaries
as at the end of such year, setting forth in each
case in comparative form corresponding
consolidated figures from the preceding annual
audit, all examined by independent public
accountants of recognized standing selected by the
Company, which examination shall have been made in
accordance with generally accepted auditing
standards and shall accordingly include such tests
of the accounting records and such other auditing
procedures as are considered necessary in the
circumstances;
(iii) promptly upon transmission thereof,
copies of all such financial statements, proxy
statements, notices and reports as it shall send
to its public stockholders and copies of all
registration statements (without exhibits), other
than registration statements on Form S-8 or
otherwise relating to a "401(K) Plan" or any other
employee benefit or employee stock option plan,
and all reports (including annual reports on Form
11-K) which it files with the Securities and
Exchange Commission (or any governmental body or
agency succeeding to the functions of the
securities and Exchange Commission); and
(iv) with reasonable promptness, such other
information respecting the condition or
operations, financial or
12
<PAGE> 15
otherwise, of the Company or any of its
Subsidiaries as you may reasonably request.
So long as the Company shall file periodic reports with the
Securities and Exchange Commission, the Company's obligation
to deliver to you the financial statements required by
clauses (i) and (ii) above shall be satisfied by its
delivery to you of its quarterly reports on Form 10-Q and
its annual reports on Form 10-K, respectively, in accordance
with clause (iii) above. Together with each delivery of
financial statements required by clause (i) and within 10
days after the delivery of the financial statements required
by clause (ii) above, the Company will deliver to each
Significant Holder an Officer's Certificate demonstrating
(with computations in reasonable detail) compliance by the
Company and its Subsidiaries with the provisions of
paragraphs 6A(l), 6A(2), 6A(3) and 6B(2)(ii) and stating
that there exists no Event of Default or Default, or, if any
Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company
proposes to take with respect thereto. Together with each
delivery of financial statements required by clause (ii)
above, the Company will deliver to each Significant Holder a
certificate of such accountants stating that, in making the
audit necessary to the certification of such financial
statements, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of
any Event of Default or Default, specifying the nature and
period of existence thereof. Such accountants, however,
shall not be liable to anyone by reason of their failure to
obtain knowledge of any Event of Default or Default which
would not be disclosed in the course of an audit conducted
in accordance with generally accepted auditing standards.
The Company also covenants that forthwith upon the chief
executive officer, principal financial officer or principal
accounting officer of the Company obtaining knowledge of an
Event of Default or Default, it will deliver to each
Significant Holder an Officer's Certificate specifying the
nature and period of existence thereof and what action the
Company proposes to take with respect thereto.
5B. INSPECTION OF PROPERTY. The Company covenants
that it will permit any Person designated by any Significant
Holder in writing, at such Significant Holder's expense, to
visit and inspect any of the properties of the Company and
its Subsidiaries, to examine the corporate books and
financial records of the Company and its Subsidiaries and to
make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations
with the principal officers of the Company and its
independent public accountants, all at such reasonable times
and as often as such Significant Holder may reasonably
request.
13
<PAGE> 16
5C. COVENANT TO SECURE NOTES EQUALLY. The Company
covenants that, if it or any Subsidiary shall create or
assume any Lien upon any of its property or assets, whether
now owned or hereafter acquired, other than Liens permitted
by the provisions of paragraph 6B(1) (unless prior written
consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C), it will make or
cause to be made effective provision whereby the Notes will
be secured by such Lien equally and ratably with any and all
other Debt thereby secured so long as any such other Debt
shall be so secured.
5D. MAINTENANCE OF INSURANCE. The Company
covenants that it and each Subsidiary will maintain, with
responsible insurers, insurance in such amounts and against
such liabilities and hazards as customarily is maintained by
other companies operating similar businesses and together
with each delivery of financial statements of the Company
and its Subsidiaries under clause (ii) of paragraph 5A,
will, at your option, deliver an Officer's Certificate
specifying the details of such insurance in effect.
5E. TAXES AND ASSESSMENTS. The Company will duly
pay and discharge, and cause each of its Subsidiaries duly
to pay and discharge, as the same become due and payable,
all taxes, assessments and governmental and other charges,
of which the Company and its Subsidiaries have notice,
levied or imposed upon the properties of the Company and its
Subsidiaries, provided that the Company or any such
--------
Subsidiary may in good faith contest the validity of any
such tax, assessment, charge, levy or claim by appropriate
proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles.
5F. GUARANTEED OBLIGATION. The Company covenants
that if, at any time any of its Subsidiaries incurs or
permits to exist any Debt for money borrowed or other
obligation guaranteed or collateralized in any other manner
by any Subsidiary, it will simultaneously cause such
Subsidiary to execute and deliver to each Significant Holder
a guaranty agreement in form and substance satisfactory to
such Significant Holder guaranteeing payment of a principal
amount of the Notes and interest thereon which bears the
same ratio to the total unpaid principal amount of the Notes
as the amount of such other obligation which is guaranteed
bears to the total unpaid principal amount of such other
obligation, or if such other obligation is collateralized
(with assets other than margin stock), to collateralize the
Notes equally and ratably with such other obligation.
14
<PAGE> 17
6. NEGATIVE COVENANTS. During the Issuance
Period and so long as any Note shall remain unpaid, the
Company covenants that:
6A. FINANCIAL COVENANTS. The Company shall not
permit:
6A(l). CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth at any time to be less than
$151,300,000.
6A(2). FUNDED DEBT. Funded Debt to exceed 55% of
Consolidated Net Tangible Assets.
6A(3). DEBT. Debt to exceed 60% of Consolidated
Net Tangible Assets plus Current Debt.
----
6B. LIEN, DEBT, AND OTHER RESTRICTIONS. The
Company will not and will not permit any Subsidiary to:
6B(l). LIENS. Create, assume or suffer to exist
any Lien upon any of its properties or assets, whether now
owned or hereafter acquired (whether or not provision is
made for the equal and ratable securing of the Note in
accordance with the provisions of Paragraph 5C), except,
------
(i) Liens for taxes not yet due or which are
being actively contested in good faith by
appropriate proceedings,
(ii) other Liens incidental to the conduct of
its business or the ownership of its property and
assets which are not incurred in connection with
the borrowing of money or the obtaining of
advances or credit or guaranteeing the obligations
of a Person (including landlord liens), and which
do not in the aggregate materially detract from
the value of its property or assets or materially
impair the use thereof in the operation of its
business,
(iii) Liens on property or assets of a
Subsidiary to secure obligations of such
Subsidiary to the Company or another Subsidiary,
(iv) existing Liens on property of the
Company as of January 27, 1996 as described in
Schedule 6B(1) attached hereto and securing Debt
--------------
permitted by clause (ii) of paragraph 6B(2),
15
<PAGE> 18
(v) Liens existing on any property of any
corporation at the time it becomes a Subsidiary,
or existing prior to the time of acquisition upon
any property acquired by the Company or any
Subsidiary through purchase, merger or
consolidation or otherwise, whether or not assumed
by the Company or such Subsidiary, or placed on
property at the time of acquisition by the Company
or any Subsidiary to secure all or a portion of
(or to secure Debt incurred to pay all or a
portion of) the purchase price thereof provided
--------
that (a) all of such property is not or shall not
thereby become encumbered in any amount in excess
of the lesser of the cost thereof or fair value
thereof and (b) any such Lien shall not encumber
any other property of the Company or such
Subsidiary,
(vi) any Lien renewing, extending or
refunding any Lien permitted by clause (v) above,
provided that the principal amount secured is not
--------
increased, and the Lien is not extended to other
property, and
(vii) other Liens on the property of the
Company, provided that the aggregate amount of all
--------
Debt (including Capitalized Lease Obligations)
secured by Liens permitted by clauses (v), (vi)
and (vii) of this paragraph 6B(1) plus the
aggregate amount of all Attributable Debt does not
exceed at any time an amount equal to 15% of
Consolidated Net Tangible Assets.
6B(2). DEBT. Create, incur, assume or
suffer to exist any Debt, except
------
(i) Funded Debt of the Company represented
by the Notes,
(ii) Funded Debt or Current Debt of the
Company and any Subsidiary secured by Liens
permitted by the provisions of clauses (v), (vi)
and (vii) of paragraph 6B(1), provided that the
--------
aggregate amount of such Debt together with all
other Debt secured by Liens permitted by clauses
(v), (vi) and (vii) of paragraph 6B(1) does not
exceed at any time an amount equal to 15% of
Consolidated Net Tangible Assets,
16
<PAGE> 19
(iii) Funded Debt or Current Debt of any
Subsidiary to the Company or any other Subsidiary,
and
(iv) other Debt of the Company permitted by
paragraphs 6A(2) and 6A(3).
6B(3). LOANS, ADVANCES, INVESTMENTS AND CONTINGENT
LIABILITIES. Make or permit to remain outstanding any loan
or advance to, or extend credit (other than credit extended
in the normal course of business to any Person who is not an
Affiliate of the Company) to, or guarantee, endorse or
otherwise be or become contingently liable, directly or
indirectly, in connection with the obligations, stock or
dividends of, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or
make any capital contribution to, any Person, except as
approved by or in accordance with guidelines or corporate
policies approved or authorized by the Company's Board of
Directors from time to time.
6B(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES.
Sell or otherwise dispose of, or part with control of, any
shares of stock (or options, warrants or other rights
convertible into shares of stock) or Debt of any Subsidiary,
except
- ------
(i) to the Company or another Subsidiary; or
(ii) where the consummation of the sale of
such shares of stock, or options, warrants or
other rights convertible into shares of stock, of
the Subsidiary will not, directly, or upon the
exercise of any options, warrants or other rights
convertible into stock of such Subsidiary, result
in such Subsidiary's ceasing to be a Subsidiary
within the meaning of paragraph 10B; or
(iii) where the consummation of the sale
of such shares of stock (or options, warrants or
other rights convertible into shares of stock) (A)
is permitted by paragraph 6B(5), and (B) will
effect a transfer of all, but not less than all,
of the Company's record and beneficial ownership
of such Subsidiary.
6B(5). MERGER AND SALE OF ASSETS. Merge or
consolidate with or any other Person or convey, lease,
transfer or, in any fiscal year, otherwise dispose of all or
a substantial part (i.e. assets which constitute
17
<PAGE> 20
more than 25% of the consolidated assets of the Company and
its Subsidiaries or which have contributed more than 15% of
the consolidated net earnings of the Company and its
Subsidiaries for either of the two fiscal years then most
recently ended) of its assets to any Person, except that
------
(i) any Subsidiary may merge with the
Company (provided that the Company shall be the
--------
continuing or surviving corporation) or with any
one or more other Subsidiaries,
(ii) any Subsidiary may sell, lease, transfer
or otherwise dispose of any of its assets to the
Company or another Subsidiary,
(iii) the Company may merge with any
other corporation, provided that (a) the Company
--------
shall be the continuing or surviving corporation,
and (b) immediately after giving effect to such
merger no Event of Default or Default shall exist,
(iv) any Subsidiary may merge or consolidate
with any other corporation, provided that,
--------
immediately after giving effect to such merger or
consolidation (a) the continuing or surviving
corporation of such merger or consolidation shall
constitute a Subsidiary, and (b) no Event of
Default or Default shall exist, and
(v) the Company and any Subsidiary may sell
or otherwise dispose of inventory in the ordinary
course of business.
6B(6). SALE OR LEASE-BACK. Enter into any
arrangement with any lender or investor or to which such
lender or investor is a party providing for the leasing by
the Company or any Subsidiary of real or personal property
which has been or is to be sold or transferred by the
Company or any Subsidiary to such lender or investor or to
any Person to whom funds have been or are to be advanced by
such lender or investor on the security of such property or
rental obligations of the Company or any Subsidiary unless
the Attributable Debt in respect of such transaction is not
prohibited by the proviso at the end of paragraph 6B(1).
18
<PAGE> 21
6B(7). ISSUANCE OF STOCK BY SUBSIDIARIES. The
Company covenants that it will not permit any Subsidiary
(either directly, or indirectly by the issuance of rights or
options for, or securities convertible into, such shares) to
issue, sell or otherwise dispose of any shares of any class
of its stock (other than directors' qualifying shares)
except
(i) to the Company or a Subsidiary; or
(ii) to an extent which does not result in
such Subsidiary's ceasing to be a Subsidiary
within the meaning of paragraph 10B.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events
shall occur and be continuing for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or
come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment
of any principal of, or Yield Maintenance Amount
payable with respect to, any Note when the same
shall become due, either by the terms thereof or
otherwise as herein provided; or
(ii) the Company defaults in the payment
of any interest on any Note for more than 5
Business Days after the date due; or
(iii) the Company or any Subsidiary
defaults (whether as primary obligor or as
guarantor or other surety) in any payment of
principal of or interest on any other obligation
for money borrowed (or any Capitalized Lease
Obligation, any obligation under a conditional
sale or other title retention agreement, any
obligation issued or assumed as full or partial
payment for property whether or not secured by a
purchase money mortgage or any obligation under
notes payable or drafts accepted representing
extensions of credit) beyond any period of grace
provided with respect thereto, or the Company or
any Subsidiary fails to perform or observe any
other agreement, term or condition contained in
any agreement under which any such obligation is
created (or if any other event thereunder or
19
<PAGE> 22
under any such agreement shall occur and be
continuing) and the effect of such failure or
other event is to cause, or to permit the holder
or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such
obligation to become due (or to be repurchased by
the Company or any Subsidiary) prior to any stated
maturity, provided that the aggregate amount of
--------
all obligations as to which such a payment default
shall occur and be continuing or such a failure or
other event causing or permitting acceleration (or
resale to the Company or any Subsidiary) shall
occur and be continuing exceeds $5,000,000; or
(iv) any representation or warranty made
by the Company herein or by the Company or any of
its officers in any writing furnished in
connection with or pursuant to this Agreement
shall be false in any material respect on the date
as of which made; or
(v) the Company fails to perform or
observe any agreement contained in paragraph 5C,
5F or 6; or
(vi) the Company fails to perform or
observe any other agreement, term or condition
contained herein and such failure shall not be
remedied within 30 days after any officer obtains
actual knowledge thereof; or
(vii) the Company or any Subsidiary
makes an assignment for the benefit of creditors
or is generally not paying its debts as such debts
become due; or
(viii) any decree or order for relief in
respect of the Company or any Significant
Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or
liquidation or similar law, whether now or
hereafter in effect (herein called the "BANKRUPTCY
LAW"), of any jurisdiction; or
(ix) the Company or any Significant
Subsidiary petitions or applies to any tribunal
for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian,
liquidator or similar official of the Company or
any Subsidiary, or of any substantial part of the
assets of the
20
<PAGE> 23
Company or any Significant Subsidiary, or
commences a voluntary case under the Bankruptcy
Law of the United States or any proceedings (other
than proceedings for the voluntary liquidation and
dissolution of a Significant Subsidiary) relating
to the Company or any Significant Subsidiary under
the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is
filed, or any such proceedings are commenced,
against the Company or any Subsidiary and the
Company or such Subsidiary by any act indicates
its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or
decree is entered appointing any such trustee,
receiver, custodian, liquidator or similar
official, or approving the petition in any such
proceedings, and such order, judgment or decree
remains unstayed and in effect for more than 30
days; or
(xi) any order, judgment or decree is
entered in any proceedings against the Company
decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in
effect for more than 30 days: or
(xii) any order, judgment or decree is
entered in any proceedings against the Company or
any Significant Subsidiary decreeing a split-up of
the Company or such Significant Subsidiary which
requires the divestiture of assets, or the
divestiture of the stock of a Significant
Subsidiary and such order, judgment or decree
remains unstayed and in effect for more than 30
days; or
(xiii) any judgment or order of a federal or
state court of the United States or any State or
territory thereof (including the domestication or
any foreign judgment), or series of such judgments
or orders, for the payment of money in an amount
in excess of $1,000,000 is rendered against the
Company or any Subsidiary and either (i)
enforcement proceedings have been commenced by any
creditor upon such judgment or order or (ii)
within thirty (30) days after entry thereof, such
judgment is not discharged or execution thereof
stayed pending appeal, or within thirty (30) days
after the expiration of any such stay, such
judgment is not discharged; or
21
<PAGE> 24
(xiv) any Plan shall fail to maintain the
minimum funding standard required by Section 412
of the Code for any plan year, or any Plan shall
become the subject of termination proceedings
under Title IV of ERISA (except in the case of a
standard termination under Section 4041(b) of
ERISA), or the Company or any ERISA Affiliate
shall withdraw from a Multiemployer Plan in whole
or in part or any Plan subject to Title IV of
ERISA or any Multiemployer Plan shall be
terminated (except in the case of a standard
termination under Section 4041(b) of ERISA); and
as a result of any one or more of the foregoing
there exists a liability of the Company or any
Subsidiary to the Internal Revenue Service, the
Pension Benefit Guaranty Corporation, any Plan or
any Multiemployer Plan, in an aggregate amount
exceeding $1,000,000 (or the equivalent amount in
any foreign currency;
then (a) if such event is an Event of Default specified in
-
clause (i) or (ii) of this paragraph 7A, any holder of any
Note may at its option during the continuance of such Event
of Default, by notice in writing to the Company, declare all
of the Notes held by such holder to be, and all of the Notes
held by such holder shall thereupon be and become,
immediately due and payable together with interest accrued
thereon are together with the Yield-Maintenance Amount, if
any, with respect to such Notes, without presentment,
demand, protest or notice of any kind, all of which are
hereby waived by the Company, (b) if such event is an Event
-
of Default specified in clause (viii), (ix) or (x) of this
paragraph 7A with respect to the Company, all of the Notes
at the time outstanding shall automatically become
immediately due and payable together with interest accrued
thereon are together with the Yield-Maintenance Amount, if
any, with respect to such Notes, without presentment,
demand, protest or notice of any kind, all of which are
hereby waived by the Company, and (c) if such event is any
-
Event of Default other than as specified in the preceding
clauses (a) or (b), the Required Holder(s) of the Notes of
any Series may at its or their option during the continuance
of such Event of Default, by notice in writing to the
Company, declare all of the Notes of such Series to be, and
all of the Notes of such Series shall thereupon be and
become, immediately due and payable together with interest
accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note of such Series,
without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Company.
22
<PAGE> 25
7B. RESCISSION OF ACCELERATION. At any time
after any or all of the Notes of any Series shall have been
declared immediately due and payable pursuant to paragraph
7A, the Required Holder(s) of the Notes of such Series may,
by notice in writing to the Company, rescind and annul such
declaration and its consequences if (i) the Company shall
have paid all overdue interest on the Notes of such Series,
the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series which have
become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and
Yield Maintenance Amount at the rate specified in the Notes
of such Series, (ii) the Company shall not have paid any
amounts which have become due solely by reason of such
declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived
pursuant to paragraph 11C, and (iv) no judgment or decree
shall have been entered for the payment of any amounts due
pursuant to the Notes of such Series or this Agreement. No
such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right
arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION.
Whenever any Note shall be declared immediately due and
payable pursuant to paragraph 7A or any such declaration
shall be rescinded and annulled pursuant to paragraph 7B,
the Company shall forthwith give written notice thereof to
the holder of each Note of each Series at the time
outstanding.
7D. OTHER REMEDIES. If any Event of Default or
Default shall occur and be continuing, the holder of any
Note may proceed to protect and enforce its rights under
this Agreement and such Note by exercising such remedies as
are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at
law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or
in aid of the exercise of any power granted in this
Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or
by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES.
The Company represents, covenants and warrants as follows:
23
<PAGE> 26
8A. ORGANIZATION. The Company is a corporation
duly organized and existing in good standing under the laws
of the State of Missouri, each Subsidiary is duly organized
and existing in good standing under the laws of the
jurisdiction in which it is incorporated, and the Company
has and each Subsidiary has the corporate power to own its
respective property and to carry on its respective business
as now being conducted. The execution, delivery and
performance by the Company of this Agreement and the Notes,
are within the Company's corporate powers and have been duly
authorized by all necessary corporate action.
8B. FINANCIAL STATEMENTS. The Company has
furnished each Purchaser of any Accepted Notes with the
following financial statements, identified by a principal
financial officer of the Company: (i) a consolidated
-
balance sheet of the Company and its Subsidiaries as at
January 30, 1993, January 29, 1994 and January 28, 1995 for
the fiscal years of the Company most recently completed
prior to the date as of which this representation is made or
repeated to such Purchaser (other than fiscal years
completed within 90 days prior to such date for which
audited financial statements have not been released) and
consolidated statements of income, stockholders' equity and
cash flows of the Company and its Subsidiaries for each such
year, all reported on by Arthur Andersen & Co.; and (ii) a
--
consolidated balance sheet of the Company and its
Subsidiaries as at the end of the quarterly period (if any)
most recently completed prior to such date and after the end
of such fiscal year (other than quarterly periods completed
within 60 days prior to such date for which financial
statements have not been released) and the comparable
quarterly period in the preceding fiscal year and
consolidated statements of income, stockholders' equity and
cash flows for the periods from the beginning of the fiscal
years in which such quarterly periods are included to the
end of such quarterly periods, prepared by the Company.
Such financial statements (including any related schedules
and/or notes) are true and correct in all material respects
(subject, as to interim statements, to changes resulting
from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles
consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with
such principles. The balance sheets fairly present the
condition of the Company and its Subsidiaries as at the
dates thereof, and the statements of income, stockholders'
equity and cash flows fairly present the results of the
operations of the Company and its Subsidiaries and their
cash flows for the periods indicated. There has been no
material adverse change in the business, property or assets,
condition (financial or otherwise) or operations
24
<PAGE> 27
of the Company and its Subsidiaries taken as a whole since
the end of the most recent fiscal year for which such
audited financial statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit,
investigation or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its
Subsidiaries, or any properties or rights of the Company or
any of its Subsidiaries, by or before any court, arbitrator
or administrative or governmental body which might result in
any material adverse change in the business, property or
assets, condition (financial or otherwise) or operations of
the Company and its Subsidiaries taken as a whole. There is
no action, suit, investigation or proceeding pending or
threatened against the Company or any of its Subsidiaries
which purports to affect the validity or enforceability of
the Note Facility Agreement, the notes issued thereunder,
this Agreement or any Note issued hereunder.
8D. OUTSTANDING DEBT. Neither the Company nor
any of its Subsidiaries has outstanding any Debt except as
permitted by paragraph 6B(2). There exists no default under
the provisions of any instrument evidencing such Debt or of
any agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has and
each of its Subsidiaries has good and marketable title to
its respective real properties (other than properties which
it leases) and good title to all of its other respective
properties and assets, including the properties and assets
reflected in the most recent audited balance sheet referred
to in paragraph 8B (other than properties and assets
disposed of in the ordinary course of business), subject to
no Lien of any kind except Liens permitted by
paragraph 6B(1). All leases necessary in any material
respect for the conduct of the respective businesses of the
Company and its Subsidiaries are valid and subsisting and
are in full force and effect.
8F. TAXES. The Company has and each of its
Subsidiaries has filed all federal, state and other income
tax returns which, to the best knowledge of the officers of
the Company and its Subsidiaries, are required to be filed,
and each has paid all taxes as shown on such returns and on
all assessments received by it to the extent that such taxes
have become due, except such taxes as are being contested in
good faith by appropriate proceedings for which adequate
reserves have been established in accordance with generally
accepted accounting principles.
25
<PAGE> 28
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS.
Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement or subject to any charter or
other corporate restriction which materially and adversely
affects its business, property or assets, condition
(financial or otherwise) or operations. Neither the
execution nor delivery of this Agreement or the Notes, nor
the offering, issuance and sale of the Notes, nor
fulfillment of nor compliance with the terms and provisions
hereof and of the Notes will conflict with, or result in a
breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of,
or result in the creation of any Lien upon any of the
properties or assets of the Company or any of its
Subsidiaries pursuant to, the charter or by-laws of the
Company or any of its Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company or any of its
Subsidiaries is subject. Neither the Company nor any of its
Subsidiaries is a party to, or otherwise subject to any
provision contained in, any instrument evidencing
Indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or
agreement (including its charter) which limits the amount
of, or otherwise imposes restrictions on the incurring of,
Debt of the Company of the type to be evidenced by the Notes
except as set forth in the agreements listed in Exhibit E
attached hereto.
8H. OFFERING OF NOTES. Neither the Company nor
any agent acting on its behalf has, directly or indirectly,
offered the Notes or any similar security of the Company for
sale to, or solicited any offers to buy the Notes or any
similar security of the Company from, or otherwise
approached or negotiated with respect thereto with, any
Person other than institutional investors, and neither the
Company nor any agent acting on its behalf has taken or will
take any action which would subject the issuance or sale of
the Notes to the provisions of Section 5 of the Securities
Act or to the provisions of any securities or Blue Sky law
of any applicable jurisdiction.
8I. USE OF PROCEEDS. None of the proceeds of the
sale of any Notes will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of
the Federal Reserve System (herein called "MARGIN STOCK") or
for the purpose of maintaining, reducing or retiring any
Indebtedness which was originally incurred to purchase or
carry any stock that is then currently a margin stock or for
any other purpose which might constitute the purchase of
such Notes a "purpose credit" within the meaning of such
Regulation G,
26
<PAGE> 29
unless the Company shall have delivered to the Purchaser
which is purchasing such Notes, on the Closing Day for such
Notes, an opinion of counsel satisfactory to such Purchaser
stating that the purchase of such Notes does not constitute
a violation of such Regulation G. Neither the Company nor
any agent acting on its behalf has taken or will take any
action which might cause this Agreement or the Notes to
violate Regulation G, Regulation T or any other regulation
of the Board of Governors of the Federal Reserve System or
to violate the Exchange Act, in each case as in effect now
or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as
defined in section 302 of ERISA and section 412 of the
Code), whether or not waived, exists with respect to any
Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected
by the Company or any ERISA Affiliate to be incurred with
respect to any Plan (other than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA Affiliate which is or
would be materially adverse to the business, property or
assets, condition (financial or otherwise) or operations of
the Company and its Subsidiaries taken as a whole. Neither
the Company, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse
to the business, property or assets, condition (financial or
otherwise) or operations of the Company and its Subsidiaries
taken as a whole. The execution and delivery of this
Agreement and the issuance and sale of the Notes will be
exempt from or will not involve any transaction which is
subject to the prohibitions of section 406 of ERISA and will
not involve any transaction in connection with which a
penalty could be imposed under section 502(i) of ERISA or a
tax could be imposed pursuant to section 4975 of the Code.
The representation by the Company in the next preceding
sentence is made in reliance upon and subject to the
accuracy of the representation of each Purchaser in
paragraph 9B as to the source of funds to be used by it to
purchase any Notes.
8K. GOVERNMENTAL CONSENT. Neither the nature of
the Company or of any Subsidiary, nor any of their
respective businesses or properties, nor any relationship
between the Company or any Subsidiary and any other Person,
nor any circumstance in connection with the offering,
issuance, sale or delivery of the Notes is such as to
require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or
administrative or governmental body (other than routine
filings after the Closing Day for any Notes with the
Securities and
27
<PAGE> 30
Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this
Agreement, the offering, issuance, sale or delivery of the
Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.
8L. ENVIRONMENTAL COMPLIANCE. To the best of the
Company's knowledge, the Company and each of its
Subsidiaries has obtained all permits, licenses and other
authorizations which are required under Environmental Laws ,
and the Company and each of its Subsidiaries is in
compliance in all material respects with all terms and
conditions of the required permits, licenses and
authorizations and is also in compliance in all material
respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any
applicable Environmental Laws.
Neither the Company nor any of its Subsidiaries is
aware of, or has received notice of, any past, present or
future events, conditions, circumstances, activities,
practices, incidents, actions or plans which, with respect
to the Company or any Subsidiary, may interfere with or
prevent compliance or continued compliance in any material
respect with Environmental Laws, or may give rise to any
material common law or legal liability, or otherwise form
the basis of any material claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or
related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation or handling, or
the emission, discharge or release or, to the best of the
Company's knowledge, threatened release into the
environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
There is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice or demand
letter, notice of violation, investigation or proceeding
pending or, to the best of the Company's knowledge,
threatened against the Company or any Subsidiary relating in
any way to Environmental Laws.
8M. DISCLOSURE. Neither this Agreement nor any
other document, certificate or statement furnished to any
Purchaser by or on behalf of the Company in connection
herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading.
There is no fact peculiar to the Company or any of its
Subsidiaries which materially adversely affects or in the
future may (so far as the Company can
28
<PAGE> 31
now foresee) materially adversely affect the business,
property or assets, condition (financial or otherwise) or
operations of the Company or any of its Subsidiaries and
which has not been set forth in this Agreement.
8N. LIENS. Except for the Liens permitted by
paragraph 6B(1), there are no Liens encumbering the property
of the Company or any of its Subsidiaries.
8O. HOSTILE TENDER OFFERS. None of the proceeds
of the sale of any Notes will be used to finance a Hostile
Tender Offer.
8P. ENFORCEABILITY. This Agreement is, and the
Notes when delivered hereunder will be, legal, valid and
binding obligations of the Company enforceable against the
Company in accordance with their terms.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. NATURE OF PURCHASE. Such Purchaser is not
acquiring the Notes purchased by it hereunder with a view to
or for sale in connection with any distribution thereof
within the meaning of the Securities Act, provided that the
disposition of such Purchaser's property shall at all times
be and remain within its control.
9B. SOURCE OF FUNDS. No part of the funds used
by such Purchaser to pay the purchase price of the Notes
purchased by such Purchaser hereunder constitutes assets
allocated to any separate account maintained by such
Purchaser in which any employee benefit plan, other than
employee benefit plans identified on a list which has been
furnished by such Purchaser to the Company, participates to
the extent of 10% or more. For the purpose of this
paragraph 9B, the terms "separate account" and "employee
benefit plan" shall have the respective meanings specified
in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this
Agreement, the terms defined in paragraphs 1 and 2 shall
have the respective meanings specified therein, and the
following terms shall have the meanings specified with
respect thereto below:
29
<PAGE> 32
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any
Note, the principal of such Note that is to be prepaid
pursuant to paragraph 4A or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context
requires.
"DESIGNATED SPREAD" shall mean in the case of each
Note of any Series unless the Confirmation of Acceptance
with respect to the Notes of such Series specifies a
different Designated Spread in which case it shall mean,
with respect to each Note of such Series, the Designated
Spread so specified.
"DISCOUNTED VALUE" shall mean, with respect to the
Called Principal of any Note, the amount obtained by
discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice
and at a discount factor (applied on the same periodic basis
as that on which interest on such Note is payable) equal to
the Reinvestment Yield with respect to such Called
Principal.
"REINVESTMENT YIELD" shall mean, with respect to
the Called Principal of any Note, the Designated Spread over
the yield to maturity implied by (a) the yields reported, as
-
of 10:00 A.M. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page 678" on
the Telerate Service (or such other display as may replace
page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement
Date, or if such yields shall not be reported as of such
time or the yields reported as of such time shall not be
ascertainable, (b) the Treasury Constant Maturity Series
-
yields reported, for the latest day for which such yields
shall have been so reported as of the Business Day next
preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal
as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (x) converting U.S. Treasury
-
bill quotations to bond-equivalent yields in
30
<PAGE> 33
accordance with accepted financial practice and (y)
-
interpolating linearly between yields reported for various
maturities.
"REMAINING AVERAGE LIFE" shall mean, with respect
to the Called Principal of any Note, the number of years
(calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the
- --
products obtained by multiplying (a) each Remaining
-
Scheduled Payment of such Called Principal (but not of
interest thereon) by (b) the number of years (calculated to
-
the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and
the scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with
respect to the Called Principal of any Note, all payments of
such Called Principal and interest thereon that would be due
on or after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made
prior to its scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the
Called Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to paragraph 4B or is
declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with
respect to any Note, an amount equal to the excess, if any,
of the Discounted Value of the Called Principal of such Note
over the sum of (i) such Called Principal plus (ii) interest
- --
accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The
Yield-Maintenance Amount shall in no event be less than
zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in
paragraph 2F.
"ACCEPTANCE DAY" shall have the meaning specified
in paragraph 2F.
"ACCEPTANCE WINDOW" shall have the meaning
specified in paragraph 2F.
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<PAGE> 34
"ACCEPTED NOTE" shall have the meaning specified
in paragraph 2F.
"AFFILIATE" shall mean any Person directly or
indirectly controlling, controlled by, or under direct or
indirect common control with, the Company, except a
Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of
the management and policies of such corporation, whether
through the ownership of voting securities, by contract or
otherwise.
"ATTRIBUTABLE DEBT" shall mean in connection with
a transaction described in paragraph 6B(6) the lesser of (i)
the fair market value of the assets subject to such
transaction or (ii) the present value (discounted at 10%) of
the obligations of the lease for rental payments (determined
in accordance with Statement of Financial Accounting
Standards #13) during the term of any lease. For purposes
of the preceding sentence, fair market value of the assets
subject to such a transaction shall be fair market value of
such assets as determined by the Company and communicated
promptly to each Significant Holder.
"AUTHORIZED OFFICER" shall mean (i) in the case of
-
the Company, its chief executive officer, its chief
financial officer, any officer of the Company designated as
an "Authorized Officer" of the Company in the Information
Schedule attached hereto or any officer of the Company
designated as an "Authorized Officer" of the Company for the
purpose of this Agreement in an Officer's Certificate
executed by the Company's chief executive officer or chief
financial officer and delivered to Prudential, and (ii) in
--
the case of Prudential, any officer of Prudential designated
as its "Authorized Officer" in the Information Schedule or
any officer of Prudential designated as its "Authorized
Officer" for the purpose of this Agreement in a certificate
executed by one of its Authorized Officers. Any action
taken under this Agreement on behalf of the Company by any
individual who on or after the date of this Agreement shall
have been an Authorized Officer of the Company and whom
Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be
binding on the Company even though such individual shall
have ceased to be an Authorized Officer of the Company, and
any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of
this Agreement shall have been an Authorized Officer of
Prudential and whom the Company in good faith believes to be
an Authorized Officer of Prudential
32
<PAGE> 35
at the time of such action shall be binding on Prudential
even though such individual shall have ceased to be an
Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning
specified in paragraph 2A.
"BANKRUPTCY LAW" shall have the meaning specified
in clause (viii) of paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a
Saturday or a Sunday, (ii) a day on which commercial banks
in New York City are required or authorized to be closed and
(iii) for purposes of paragraph 2C hereof only, a day on
which The Prudential Insurance Company of America is not
open for business.
"CANCELLATION DATE" shall have the meaning
specified in paragraph 2I(3).
"CANCELLATION FEE" shall have the meaning
specified in paragraph 2I(3).
"CAPITALIZED LEASE OBLIGATION" shall mean any
rental obligation which, under generally accepted accounting
principles, is or will be required to be capitalized on the
books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest
expenses) in accordance with such principles.
"CLOSING DAY" for any Accepted Note shall mean the
Business Day specified for the closing of the purchase and
sale of such Note in the Request for Purchase of such Note,
provided that (i) if the Acceptance Day for such Accepted
-
Note is less than five Business Days after the Company shall
have made such Request for Purchase and the Company and the
Purchaser which is obligated to purchase such Note agree on
an earlier Business Day for such closing, the "CLOSING DAY"
for such Accepted Note shall be such earlier Business Day,
and (ii) if the closing of the purchase and sale of such
--
Accepted Note is rescheduled pursuant to paragraph 2H, the
Closing Day for such Accepted Note, for all purposes of this
Agreement except paragraph 2I(3), shall mean the Rescheduled
Closing Day with respect to such Closing.
33
<PAGE> 36
"CODE" shall mean the Internal Revenue Code of
1986, as amended.
"CONFIRMATION OF ACCEPTANCE" shall have the
meaning specified in paragraph 2F.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean, as
of the date of any determination thereof, the total amount
of all assets of the Company and its Subsidiaries, less the
sum of:
(i) the amount, if any, at which intangible assets
(including good will, trade names, trademarks,
patents, organization expense and other similar
intangibles but excluding acquired customer
contracts and non-competition agreements and
unamortized debt discount and expense appear on
a consolidated balance sheet;
(ii) any write-up of fixed assets after the date of
this Agreement; and
(iii) all liabilities other than (a) Funded Debt and
(b) the amount by which minority interest and
deferred taxes (whether current or long-term),
when aggregated together, does not exceed 3% of
the total amount of all assets of the Company
and its Subsidiaries.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean the
sum of the gross book value of the assets of the Company and
its Subsidiaries less applicable reserves, goodwill,
patents, trademarks and other intangibles (other than the
book value of non-compete agreements and contracts obtained
in connection with acquisitions up to an amount equal to 10%
of Consolidated Net Tangible Assets), treasury stock,
unamortized debt discounts, certain deferred expenses
including deferred taxes (whether current or long-term) and
all liabilities (including deferred income taxes) other
than capital stock and surplus, all determined on a
consolidated basis in accordance with generally accepted
accounting principles.
"CURRENT DEBT" shall mean, with respect to the
Company and its Subsidiaries on a consolidated basis, any
obligation for borrowed money (and any notes payable and
drafts accepted representing extensions of credit whether
or not representing obligations for borrowed money) payable
on demand or within a period of one year from the date of
the creation thereof;
34
<PAGE> 37
provided that any obligation shall be treated as Funded
- --------
Debt, regardless of its term, if such obligation is
renewable pursuant to the terms thereof or of a revolving
credit or similar agreement effective for more than one year
after the date of the creation of such obligation, or may be
payable out of the proceeds of a similar obligation pursuant
to the terms of such obligation or of any such agreement.
Any obligation secured by a Lien on, or payable out of the
proceeds of production from, property of the Company or any
Subsidiary shall be deemed to be Funded or Current Debt, as
the case may be, of the Company or such Subsidiary even
though such obligation shall not be assumed by the Company
or such Subsidiary.
"DEBT" shall mean Funded Debt and Current Debt, as
the case may be.
"DELAYED DELIVERY FEE" shall have the meaning
specified in paragraph 2I(2).
"ENVIRONMENTAL LAWS" shall mean all federal,
state, local and foreign laws relating to pollution or
protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment
(including without limitation ambient air, surface water,
ground water, or land), or otherwise relating to the
manufacturer, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substance, or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or
demand letters issued, entered, promulgated or approved
thereunder.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which
is a member of the same controlled group of corporations as
the Company within the meaning of section 414(b) of the
Code, or any trade or business which is under common control
with the Company within the meaning of section 414(c) of the
Code.
"EVENT OF DEFAULT" shall mean any of the events
specified in paragraph 7A, provided that there has been
satisfied any requirement in connection with such event for
the giving of notice, or the lapse of time, or the happening
of any further condition, event or act, and "DEFAULT" shall
35
<PAGE> 38
mean any of such events, whether or not any such requirement
has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended.
"FACILITY" shall have the meaning specified in
paragraph 2A.
"FACILITY FEE" shall have the meaning specified in
paragraph 2I(1).
"FUNDED DEBT" shall mean with respect to the
Company and its Subsidiaries, on a consolidated basis,
(i) any obligation for borrowed money payable more
than one year from the date of creation thereof,
(including Capitalized Lease Obligations),
(ii) indebtedness payable more than one year from the
date of creation thereof which is secured by any
Lien on property owned by the Company or any
Subsidiary, whether or not the indebtedness
secured thereby shall have been assumed by the
Company or such Subsidiary,
(iii) guarantees (other than guarantees by the Company
of obligations not for money borrowed incurred
by a Subsidiary in the ordinary course of its
business), endorsements (other than endorsements
of negotiable instruments for collection in the
ordinary course of business) and other
contingent liabilities (whether direct or
indirect) in connection with the stock,
dividends or Debt for borrowed money of any
Person,
(iv) obligations under any contract providing for the
making of loans, advances or capital
contributions to any Person, or for the purchase
of any property from any Person, in each case in
order to enable such Person primarily to
maintain working capital, net worth or any other
balance sheet condition or to pay debts,
dividends or expenses, and
(v) obligations under any other contract which, in
economic effect, is substantially equivalent to
a guarantee other than as described in clause
(iii) above,
36
<PAGE> 39
all as determined in accordance with generally accepted
- ---
accounting principles.
"HOSTILE TENDER OFFER" shall mean, with respect
to the use of proceeds of any Note, any offer to purchase,
or any purchase of, shares of capital stock of any
corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial
ownership of, or rights to acquire, any such shares or
equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded
on any securities exchange or in any over-the-counter
market, other than purchases of such shares, equity
interests, securities or rights representing less than 5% of
the equity interests or beneficial ownership of such
corporation or other entity for portfolio investment
purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or
the equivalent governing body of such other entity prior to
the date on which the Company makes the Request for Purchase
of such Note.
"ISSUANCE PERIOD" shall have the meaning
specified in paragraph 2B.
"LIEN" shall mean any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including
any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any lease in the
nature thereof, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code of any
jurisdiction).
"MULTIEMPLOYER PLAN" shall mean any Plan which
is a "multiemployer plan" (as such term is defined in
section 4001(a)(3) of ERISA.
"NOTES" shall have the meaning specified in
paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate
signed in the name of the Company by an Authorized Officer
of the Company.
"PERSON" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any
department or agency thereof.
"PLAN" shall mean any employee pension benefit
plan (as such term is defined in section 3 of ERISA) which
is or has been established or
37
<PAGE> 40
maintained, or to which contributions are or have been made,
by the Company or any ERISA Affiliate.
"PRUDENTIAL" shall mean The Prudential Insurance
Company of America.
"PRUDENTIAL AFFILIATE" shall mean any
corporation or other entity all of the Voting Stock (or
equivalent voting securities or interests) of which is owned
by Prudential either directly or through Prudential
Affiliates.
"PURCHASERS" shall mean, with respect to any
Accepted Notes the Persons, either Prudential or a
Prudential Affiliate, who is purchasing such Accepted Notes.
"REQUEST FOR PURCHASE" shall have the meaning
specified in paragraph 2D.
"REQUIRED HOLDER(S)" shall mean, with respect to
the Notes of any series, at any time, the holder or holders
of at least 66 2/3% of the aggregate principal amount of the
Notes of such series outstanding at such time.
"RESCHEDULED CLOSING DAY" shall have the meaning
specified in paragraph 2H.
"RESPONSIBLE OFFICER" shall mean the chief
executive officer, chief operating officer, chief financial
officer or chief accounting officer of the Company or any
other officer of the Company involved principally in its
financial administration or its controllership function.
"SECURITIES ACT" shall mean the Securities Act
of 1933, as amended.
"SERIES" shall have the meaning specified in
paragraph 1.
"SIGNIFICANT HOLDER" shall mean (i) Prudential,
so long as Prudential or any Prudential Affiliate shall hold
(or be committed under this Agreement to purchase) any Note,
or (ii) any other holder of a Note or Notes that is a
Transferee.
"SIGNIFICANT SUBSIDIARY" shall mean any
Subsidiary whose assets constitute more than 5% of the
consolidated assets of the Company
38
<PAGE> 41
and its Subsidiaries or which has contributed more than 5%
of the consolidated net earnings of the Company and its
Subsidiaries for either of the two fiscal years then most
recently ended.
"SUBSIDIARY" shall mean any corporation at least
75% of the total combined voting power of all classes of
Voting Stock of which shall, at the time as of which any
determination is being made, be owned by the Company either
directly or through Subsidiaries.
"TO THE BEST OF THE COMPANY'S KNOWLEDGE" shall
mean as of a specified fact or set of facts that the Company
has actual knowledge thereof or should, in the exercise of
reasonable diligence, have had actual knowledge thereof.
"TRANSFEREE" shall mean any direct or indirect
transferee of all or any part of any Note purchased by any
Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any
corporation, any shares of stock of such corporation whose
holders are entitled under ordinary circumstances to vote
for the election of directors of such corporation
(irrespective of whether at the time stock of any other
class or classes shall have or might have voting power by
reason of the happening of any contingency).
10C. ACCOUNTING TERMS. All accounting terms
(including those which form the basis, in whole or in part,
of any financial term or covenant herein) not specifically
defined herein shall be construed in accordance with
generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in paragraph 8B.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that,
so long as any Purchaser shall hold any Note, it will make
payments of principal of, interest on, and any Yield-
Maintenance Amount payable with respect to, such Note, which
comply with the terms of this Agreement, by wire transfer of
immediately available funds for credit (not later than 12:00
noon, New York City local time, on the date due) to the
account or accounts of such Purchaser, if any, as are
specified in the Information Schedule, attached hereto, or,
in the case of any Purchaser not named in the Information
Schedule or any Purchaser wishing to change the account
specified for it in the Information Schedule, such account
or accounts in the United States as
39
<PAGE> 42
such Purchaser may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note
with respect to the place of payment. Each Purchaser agrees
that, before disposing of any Note, it will make a notation
thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which
interest thereon has been paid. The Company agrees to
afford the benefits of this paragraph 11A to any Transferee
which shall have made the same agreement as the Purchasers
have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or
not the transactions contemplated hereby shall be
consummated, to pay, and save Prudential, each Purchaser and
any Transferee harmless against liability for the payment
of, all out-of-pocket expenses arising in connection with
such transactions, including (i) all document production and
-
duplication charges and the fees and expenses of any special
counsel engaged by the Purchasers or any Transferee in
connection with this Agreement, the transactions
contemplated hereby and any subsequent proposed modification
of, or proposed consent under, this Agreement, whether or
not such proposed modification shall be effected or proposed
consent granted, and (ii) the costs and expenses, including
--
attorneys' fees, incurred by any Purchaser or any Transferee
in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal
investigative demand issued in connection with this
Agreement or the transactions contemplated hereby or by
reason of any Purchaser's or any Transferee's having
acquired any Note, including without limitation costs and
expenses incurred in any bankruptcy case. The obligations
of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein
by any Purchaser or any Transferee and the payment of any
Note.
11C. CONSENT TO AMENDMENTS. This Agreement may
be amended, and the Company may take any action herein
prohibited, or omit to perform any act herein required to be
performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the
Required Holder(s) of the Notes of each series except that,
(i) with the written consent of the holders of all Notes of
-
a particular Series, and if an Event of Default shall have
occurred and be continuing, of the holders of all Notes of
all Series, at the time outstanding (and not without such
written consents), the Notes of such Series may be amended
or the provisions thereof waived to change the maturity
thereof, to change or affect the principal thereof, or to
change or affect the rate or time of payment of interest on
or any Yield-Maintenance Amount payable with
40
<PAGE> 43
respect to the Notes of such Series, (ii) without the
--
written consent of the holder or holders of all Notes at the
time outstanding, no amendment to or waiver of the
provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as
such provisions relate to proportions of the principal
amount of the Notes of any Series, or the rights of any
individual holder of Notes, required with respect to any
declaration of Notes to be due and payable or with respect
to any consent, amendment, waiver or declaration, (iii) with
---
the written consent of Prudential (and not without the
written consent of Prudential) the provisions of paragraph 2
may be amended or waived (except insofar as any such
amendment or waiver would affect any rights or obligations
with respect to the purchase and sale of Notes which shall
have become Accepted Notes prior to such amendment or
waiver), and (iv) with the written consent of all of the
--
Purchasers which shall have become obligated to purchase
Accepted Notes of any Series (and not without the written
consent of all such Purchasers), any of the provisions of
paragraphs 2 and 3 may be amended or waived insofar as such
amendment or waiver would affect only rights or obligations
with respect to the purchase and sale of the Accepted Notes
of such Series or the terms and provisions of such Accepted
Notes. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued
thereafter may bear a notation referring to any such
consent. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any
rights of any holder of such Note. As used herein and in
the Notes, the term "this Agreement" and references thereto
shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE
OF NOTES; LOST NOTES. The Notes are issuable as registered
notes without coupons in denominations of at least $250,000,
except as may be necessary to reflect any principal amount
not evenly divisible by $250,000. The Company shall keep at
its principal office a register in which the Company shall
provide for the registration of Notes and of transfers of
Notes. Upon surrender for registration of transfer of any
Note at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new
Notes of like tenor and of a like aggregate principal
amount, registered in the name of such Transferee or
Transferees. At the option of the holder of any Note, such
Note may be exchanged for other Notes of like tenor and of
any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the
principal office of the
41
<PAGE> 44
Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and
deliver the Notes which the holder making the exchange is
entitled to receive. Each installment of principal payable
on each installment date upon each new Note issued upon any
such transfer or exchange shall be in the same proportion to
the unpaid principal amount of such new Note as the
installment of principal payable on such date on the Note
surrendered for registration of transfer or exchange bore to
the unpaid principal amount of such Note. No reference need
be made in any such new Note to any installment or
installments of principal previously due and paid upon the
Note surrendered for registration of transfer or exchange.
Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer duly executed, by the holder
of such Note or such holder's attorney duly authorized in
writing. Any Note or Notes issued in exchange for any Note
or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the
Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of
any Note of the loss, theft, destruction or mutilation of
such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation
upon surrender and cancellation of such Note, the Company
will make and deliver a new Note, of like tenor, in lieu of
the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS.
Prior to due presentment for registration of transfer, the
Company may treat the Person in whose name any Note is
registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and interest
on, and any Yield-Maintenance Amount payable with respect
to, such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue, and the Company shall not
be affected by notice to the contrary. Subject to the
preceding sentence, the holder of any Note may from time to
time grant participations in all or any part of such Note to
any Person on such terms and conditions as may be determined
by such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; ENTIRE AGREEMENT. All representations and
warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive
the execution and delivery of this Agreement and the Notes,
the transfer by any Purchaser of any Note or portion thereof
or interest therein and the
42
<PAGE> 45
payment of any Note, and may be relied upon by any
Transferee, regardless of any investigation made at any time
by or on behalf of any Purchaser or any Transferee. Subject
to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings relating
to such subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and
other agreements in this Agreement contained by or on behalf
of any of the parties hereto shall bind and inure to the
benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
11H. DISCLOSURE TO OTHER PERSONS. The Company
acknowledges that Prudential, each Purchaser and each holder
of any Note may deliver copies of any financial statements
and other documents delivered to it, and disclose any other
information disclosed to it, by or on behalf of the Company
or any Subsidiary in connection with or pursuant to this
Agreement to (i) its directors, officers, employees, agents
-
and professional consultants, (ii) any Purchaser or holder
--
of any Note, (iii) any Person to which it offers to sell any
---
Note or any part thereof, (iv) any Person to which it sells
--
or offers to sell a participation in all or any part of any
Note, (v) any Person from which it offers to purchase any
-
security of the Company, (vi) any federal or state
--
regulatory authority having jurisdiction over it, (vii) the
---
National Association of Insurance Commissioners or any
similar organization, or (viii) any other Person to which
----
such delivery or disclosure may be necessary or appropriate
(a) in compliance with any law, rule, regulation or order
-
applicable to it, (b) in response to any subpoena or other
-
legal process or informal investigative demand, (c) in
-
connection with any litigation to which it is a party or (d)
-
in order to protect the investment of any holder in any
Note.
11I. NOTICES. All written communications
provided for hereunder (other than communications provided
for under paragraph 2) shall be sent by first class mail or
nationwide overnight delivery service (with charges prepaid)
and (i) if to any Person listed in the Information Schedule
-
attached hereto, addressed to it at the address specified
for such communications in such Information Schedule, or at
such other address as it shall have specified in writing to
the Person sending such communication, and (ii) if to any
--
Purchaser or holder of any Note which is not a Person listed
in such Information Schedule, addressed to it at such
address as it shall have specified in writing to the Person
sending such communication or, if any
43
<PAGE> 46
such holder shall not have so specified an address, then
addressed to such holder in care of the last holder of such
Note which shall have so specified an address to the Person
sending such communication, provided, however, that any such
communication to the Company may also, at the option of the
Person sending such communication, be delivered by any other
means either to the Company at its address specified in the
Information Schedule or to any Authorized Officer of the
Company. Any communication pursuant to paragraph 2 shall be
made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or
obligations under this Agreement only if, in the case of a
telephone communication, an Authorized Officer of the party
conveying the information and of the party receiving the
information are parties to the telephone call, and in the
case of a telecopier communication, the communication is
signed by an Authorized Officer of the party conveying the
information, addressed to the attention of an Authorized
Officer of the party receiving the information, and in fact
received at the telecopier terminal the number of which is
listed for the party receiving the communication in the
Information Schedule or at such other telecopier terminal as
the party receiving the information shall have specified in
writing to the party sending such information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or interest on,
or Yield-Maintenance Amount payable with respect to, any
Note that is due on a date other than a Business day shall
be made on the next succeeding Business Day. If the date
for any payment is extended to the next succeeding Business
Day by reason of the preceding sentence, the period of such
extension shall be included in the computation of the
interest payable on such Business Day.
11K. SEVERABILITY. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision
in any other jurisdiction.
11L. DESCRIPTIVE HEADINGS. The descriptive
headings of the several paragraphs of this Agreement are
inserted for convenience only and do not constitute a part
of this Agreement.
11M. SATISFACTION REQUIREMENT. If any
agreement, certificate or other writing, or any action taken
or to be taken, is by the terms of this
44
<PAGE> 47
Agreement required to be satisfactory to any Purchaser, to
any holder of Notes or to the Required Holder(s), the
determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the
case may be, in the sole and exclusive judgment (exercised
in good faith) of the Person or Persons making such
determination.
11N. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF
THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF
MISSOURI.
11O. COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute
one instrument.
11P. BINDING AGREEMENT. When this Agreement is
executed and delivered by the Company and Prudential, it
shall become a binding agreement between the Company and
Prudential. This Agreement shall also inure to the benefit
of each Purchaser which shall have executed and delivered a
Confirmation of Acceptance, and each such Purchaser shall be
bound by this Agreement to the extent provided in such
Confirmation of Acceptance.
45
<PAGE> 48
Very truly yours,
ANGELICA CORPORATION
By /s/ T M Armstrong
-------------------------------
Senior Vice President and
Chief Financial Officer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Paul L. Meiring
---------------------
Vice President
46
<PAGE> 49
INFORMATION SCHEDULE
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(1) All payments on account of Notes held by such purchase
shall be made by wire transfer of immediately available
funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Companies of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name of the
Company, a reference the due date and application (as among
principal, interest and Yield Maintenance Amount) of the
payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Attention Investment Operations Group (Attention: Manager)
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
4900 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Managing Director
(4) Recipient of telephonic or facsimile prepayment
notices:
Manager, Private Placement Portfolio Management
(201) 802-6660
(201) 802-9425 (facsimile)
(5) Tax Identification
No.: 22-1211670
(6) Authorized Officers:
R.A. Walker
Paul Meiring
Steven Arnold
Randy Kob
47
<PAGE> 50
THE COMPANY
Angelica Corporation
(1) Address for Notices:
Angelica Corporation
424 South Woods Mill Road
Chesterfield, MO 63017
Attention: Chief Financial Officer
(2) Receipt of telephonic or facsimile
notices:
(314) 854-3800
(314) 854-3890 (fax)
(3) Authorized Officers:
Lawrence J. Young
Theodore M. Armstrong
Thomas M. Degnan
48
<PAGE> 51
EXHIBIT A
---------
[FORM OF NOTE]
THE ANGELICA CORPORATION
SENIOR NOTE
No. R----
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL INSTALLMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, THE
ANGELICA CORPORATION (herein called the "COMPANY"), a
corporation organized and existing under the laws of the
State of Missouri, hereby promises to pay to THE PRUDENTIAL
CORPORATION OF AMERICA, or registered assigns, the principal
sum of -------------------------------------- DOLLARS [on
the Final Maturity Date specified above] [, payable in
installments on the Principal Installment Dates and in the
amounts specified above, and on the Final Maturity Date
specified above in an amount equal to the unpaid balance of
the principal hereof,] with interest (computed on the basis
of a 360-day year--30-day month) (a) on the unpaid balance
thereof at the Interest Rate per annum specified above,
payable on each Interest Payment Date specified above and on
the Final Maturity Date specified above, commencing with the
Interest Payment Date next succeeding the date hereof, until
the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest,
and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement referred to below), payable on
each Interest Payment Date as aforesaid (or, at the option
of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (i) --% or
(ii) 2% over the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York from time to time
in New York City as its Prime Rate.
Payments of principal of, and interest on, and
any Yield-Maintenance Amount payable with respect to, this
Note are to be made at the main office of Morgan Guaranty
Trust Company of New York in New
A-1
<PAGE> 52
York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the
United States of America.
This Note is one of a series of Senior Notes
(herein called the "NOTES") issued pursuant to an
Uncommitted Shelf Agreement, dated as of March 1, 1996
(herein called the "AGREEMENT"), between the Company and The
Prudential Insurance Company of America and is entitled to
the benefits thereof. As provided in the Agreement, this
Note is subject to prepayment, in whole or from time to time
in part on the terms specified in the Agreement.
This Note is a registered Note and, as provided
in the Agreement, upon surrender of this Note for registra-
tion of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be
issued to, and registered in the name of, the transferee.
Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall
not be affected by any notice to the contrary.
In case an Event of Default, as defined in the
Agreement, shall occur and be continuing, the principal of
this Note may be declared or otherwise become due and
payable in the manner and with the effect provided in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE
STATE OF MISSOURI AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAW OF SUCH STATE.
ANGELICA CORPORATION
By:------------------------
Senior Vice President-
Chief Financial Officer
By:------------------------
Treasurer
A-2
<PAGE> 53
EXHIBIT B
---------
[FORM OF REQUEST FOR PURCHASE]
ANGELICA CORPORATION
Reference is made to the Uncommitted Shelf
Agreement (the "AGREEMENT"), dated as of March 1, 1996,
between Angelica Corporation (the "COMPANY") and The
Prudential Insurance Company of America. All terms used
herein that are defined in the Agreement have the respective
meanings specified in the Agreement.
Pursuant to Paragraph 2D of the Agreement, the
Company hereby makes the following Request for Purchase:
1. Aggregate principal amount of
the Notes covered hereby
(the "NOTES") . . . . . . . . . . . .$---------
2. Individual specifications of the Notes:
Principal
Final Installment Interest
Principal Maturity Dates and Payment
Amount Date Amounts Period<F*>
- --------- -------- ----------- ----------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase
and sale of the Notes:
[FN]
- -----------------
<F*> Specify quarterly or semi-annual.
B-1
<PAGE> 54
5. The purchase price of the Notes is to be trans-
ferred to:
Name and
Name and Address Number of Telephone No.
of Bank Account of Bank Officer
- ---------------- --------- ---------------
6. The Company certifies (a) that the representations
-
and warranties contained in paragraph 8 of the
Agreement are true on and as of the date of this
Request for Purchase except to the extent of chan-
ges caused by the transactions contemplated in the
Agreement and (b) that there exists on the date of
-
this Request for Purchase no Event of Default or
Default.
7. You are hereby notified that pursuant to paragraph
2E of the Agreement, you have three business days
to respond to this request for Purchase.
Dated:
ANGELICA CORPORATION
By:--------------------
Authorized Officer
B-2
<PAGE> 55
EXHIBIT C
---------
[FORM OF CONFIRMATION OF ACCEPTANCE]
ANGELICA CORPORATION
Reference is made to the Uncommitted Shelf
Agreement (the "AGREEMENT"), dated as of March 1, 1996,
between Angelica Corporation (the "COMPANY") and The
Prudential Insurance Company of America. All terms used
herein that are defined in the Agreement have the respective
meanings specified in the Agreement.
Each of the undersigned institutions which is
named below as a Purchaser of any Accepted Notes hereby
confirms the representations as to such Accepted Notes set
forth in paragraph 9 of the Agreement, and agrees to be
bound by the provisions of paragraphs 2F and 2H of the
Agreement relating to the purchase and sale of such Accepted
Notes.
Pursuant to paragraph 2F of the Agreement, an
Acceptance with respect to the following Accepted Notes is
hereby confirmed:
I. Aggregate principal amount $----------
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Designated Spread:----%
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Designated Spread:----%
C-1
<PAGE> 56
[(C),(D) ....: same information as to any other
II. Closing Day:
Dated:
ANGELICA CORPORATION
By:-----------------------:
Senior Vice President--
Chief Financial Officer
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:-------------------------
Vice President
[Signature block for each
named Purchaser other than
Prudential]
C-2
<PAGE> 57
EXHIBIT D
---------
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Date of Closing]
[Name(s) and address(es) of
purchaser(s)]
Dear Sirs:
We have acted as counsel for Angelica Corporation
(the "COMPANY") in connection with the Uncommitted Shelf
Agreement, dated as of March 1, 1996 , between the Company
and The Prudential Insurance Company of America (the
"AGREEMENT"), pursuant to which the Company has issued to
you today Senior Notes of the Company in the aggregate
principal amount of $----------------- (the "NOTES"). All
terms used herein that are defined in the Agreement have the
respective meanings specified in the Agreement. This letter
is being delivered to you in satisfaction of the condition
set forth in paragraph 3A of the Agreement and with the
understanding that you are purchasing the Notes in reliance
on the opinions expressed herein.
In this connection, we have examined such
certificates of public officials, certificates of officers
of the Company and copies certified to our satisfaction of
corporate documents and records of the Company and of other
papers, and have made such other investigations, as we have
deemed relevant and necessary as a basis for our opinion
hereinafter set forth. We have relied upon such
certificates of public officials and of officers of the
Company with respect to the accuracy of material factual
matters contained therein which were not independently
established. With respect to the opinion expressed in
paragraph 3 below, we have also relied upon the
representation made by you, and by each other Purchaser, in
the first sentence of paragraph 9 of the Agreement.
D-1
<PAGE> 58
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized
and validly existing in good standing under the laws of the
State of Missouri. Each Subsidiary is a corporation duly
organized and validly existing in good standing under the
laws of its jurisdiction of incorporation. The Company and
its Subsidiaries have the corporate power to carry on their
respective businesses as now being conducted.
2. The Agreement and the Notes have been duly
authorized by all requisite corporate action and duly
executed and delivered by authorized officers of the
Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in
accordance with their respective terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law), and the Notes are entitled to the benefits of the
Agreement.
3. It is not necessary in connection with the
offering, issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreement to register the
Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939,
as amended.
4. The extension, arranging and obtaining of the
credit represented by the Notes do not result in any
violation of regulation G, T or X of the Board of Governors
of the Federal Reserve System.
5. The execution and delivery of the Agreement
and the Notes, the offering, issuance and sale of the Notes
and fulfillment of and compliance with the respective
provisions of the Agreement and the Notes do not conflict
with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon
any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization,
consent, approval, exemption, or other action by or notice
to or filing with any court, administrative or governmental
body or other Person (other than routine filings after the
date hereof with the Securities and Exchange Commission
and/or state Blue Sky authorities) pursuant to, the charter
or by-laws of the Company [or any of its Subsidiaries], any
applicable law
D-2
<PAGE> 59
(including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made
due inquiry with respect thereto) any agreement (including,
without limitation, any agreement listed in Exhibit E to the
Agreement), instrument, order, judgment or decree to which
the Company or any of its Subsidiaries is a party or
otherwise subject.
A copy of this letter may be delivered by you or any
Transferee to any Person to which you or such Transferee
sells or offers to sell any Note or a participation in any
Note, and such Person may rely upon this letter as if it
were addressed and had been delivered to such Person on the
date hereof. Subject to the foregoing, this letter may be
relied upon by you only in connection with the transactions
contemplated by the Agreement and may not be used or relied
upon by you or any other Person for any other purpose
whatsoever, without our prior written consent.
Very truly yours,
D-3
<PAGE> 60
EXHIBIT E
---------
LIST OF AGREEMENTS RESTRICTING DEBT
-----------------------------------
1. Note and Note Facility Agreement dated May 5, 1989
between Angelica Corporation and The Prudential Insurance
Company.
2. Note Agreement dated as of April 1, 1991 by and
between Angelica Corporation and Nationwide Life Insurance
Company, et al.
3. Note Agreement dated as of March 1, 1995 by and
between Angelica Corporation and Nationwide Life Insurance
Company, et al.
<PAGE> 61
SCHEDULE 6B(1)
ANGELICA CORPORATION
EXISTING LIENS ON PROPERTY OF THE COMPANY AND ITS
SUBSIDIARIES AS OF JANUARY 27, 1996
<TABLE>
<CAPTION>
PROPERTY SUBJECT TO LIENS:
<S> <C> <C> <C>
First Union National Bank R.E. Alamo, TN
Distribution Center $ 2,137,500
City of Lorian, OH R.E. 1820 Iowa Avenue
Lorain, OH $ 134,705
City of Philadelphia, PA R.E. 58th and Lindbergh
Philadelphia, PA $ 237,358
Small Business Administration R.E. 3939 Market Street
San Diego, CA $ 305,043
------------
$ 2,814,606
------------
<CAPTION>
COMPANY-OWNED LIFE INSURANCE:
<S> <C> <C>
Various Insurance Companies Life Insurance Proceeds $ 336,808
------------
<CAPTION>
CAPITALIZED LEASES:
<S> <C> <C>
City of Louisville Louisville, MS $ 30,775
City of Louisville Louisville, MS $ 37,588
Tallahatchie County, MS Sumner, MS $ 88,417
------------
$ 156,780
------------
TOTAL LIENS $ 3,308,194
============
</TABLE>
<PAGE> 62
AMENDMENT AGREEMENT NO. 1
THIS AMENDMENT AGREEMENT NO. 1, dated as of March 1,
1996, between Angelica Corporation (the "COMPANY") and The
Prudential Insurance Company of America ("PRUDENTIAL").
WHEREAS, the Company and Prudential have entered into
that certain Note and Note Facility Agreement, dated May 5,
1989 (the "NOTE AGREEMENT"), providing for the issuance of
$44,375,000 10.30% Senior Notes, Due 2004 and for the
establishment of that certain $10,000,000 Shelf Note
Facility on terms and conditions contained therein;
WHEREAS, the Company and Prudential have entered into
the Uncommitted Shelf Agreement, dated as of March 1, 1996
(the "SHELF AGREEMENT"), providing for the issuance by the
Company of up to $50,000,000 Senior Notes on terms and
conditions contained therein; and
WHEREAS, the Company and Prudential desire to amend the
Note Agreement to conform to certain provisions of the Shelf
Agreement;
NOW THEREFORE, in exchange for mutual consideration,
the receipt and suffiency of which is hereby acknoledged,
the parties hereto agree as follows:
1. Amendment to Paragraph 5. Paragraph 5 of the Note
------------------------
Agreement is hereby deleted in its entirety and replaced
with the following:
"5. AFFIRMATIVE COVENANTS. So long as any Note
shall remain unpaid, the Company covenants that:
5A. FINANCIAL STATEMENTS. The Company will
deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event
within 60 days after the end of each quarterly
period (other than the last quarterly period) in
each fiscal year, consolidated statements of
income and cash flows of the Company and its
Subsidiaries for the period from the beginning of
the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet
of the Company and its Subsidiaries as at the end
of such quarterly period, setting forth in each
case in comparative form figures for the
corresponding period in the preceding fiscal year,
all in reasonable detail and certified by an
authorized financial officer of the Company,
subject to changes resulting from year-end
adjustments;
<PAGE> 63
(ii) as soon as practicable and in any event
within 120 days after the end of each fiscal year,
consolidated statements of income, shareholders',
equity and cash flows of the Company and its
Subsidiaries for such year, and a consolidated
balance sheet of the Company and its Subsidiaries
as at the end of such year, setting forth in each
case in comparative form corresponding
consolidated figures from the preceding annual
audit, all examined by independent public
accountants of recognized standing selected by the
Company, which examination shall have been made in
accordance with generally accepted auditing
standards and shall accordingly include such tests
of the accounting records and such other auditing
procedures as are considered necessary in the
circumstances;
(iii) promptly upon transmission thereof,
copies of all such financial statements, proxy
statements, notices and reports as it shall send
to its public stockholders and copies of all
registration statements (without exhibits), other
than registration statements on Form S-8 or
otherwise relating to a "401(K) Plan" or any other
employee benefit or employee stock option plan,
and all reports (including annual reports on Form
11-K) which it files with the Securities and
Exchange Commission (or any governmental body or
agency succeeding to the functions of the
securities and Exchange Commission); and
(iv) with reasonable promptness, such other
information respecting the condition or
operations, financial or otherwise, of the Company
or any of its Subsidiaries as you may reasonably
request.
So long as the Company shall file periodic reports with the
Securities and Exchange Commission, the Company's obligation
to deliver to you the financial statements required by
clauses (i) and (ii) above shall be satisfied by its
delivery to you of its quarterly reports on Form 10-Q and
its annual reports on Form 10-K, respectively, in accordance
with clause (iii) above. Together with each delivery of
financial statements required by clause (i) and within 10
days after the delivery of the financial statements required
by clause (ii) above, the Company will deliver to each
Significant Holder an Officer's Certificate demonstrating
(with computations in reasonable detail) compliance by the
Company and its Subsidiaries with the provisions of
paragraphs 6A(l), 6A(2), 6A(3)and 6B(2)(ii) and stating that
there exists no Event of Default or Default, or, if any
Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company
proposes to take with respect thereto. Together with each
delivery of financial statements required by clause (ii)
above, the Company will deliver to each Significant
2
<PAGE> 64
Holder a certificate of such accountants stating that, in
making the audit necessary to the certification of such
financial statements, they have obtained no knowledge of any
Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the
nature and period of existence thereof. Such accountants,
however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Event of Default or
Default which would not be disclosed in the course of an
audit conducted in accordance with generally accepted
auditing standards. The Company also covenants that
forthwith upon the chief executive officer, principal
financial officer or principal accounting officer of the
Company obtaining knowledge of an Event of Default or
Default, it will deliver to each Significant Holder an
Officer's Certificate specifying the nature and period of
existence thereof and what action the Company proposes to
take with respect thereto.
5B. INSPECTION OF PROPERTY. The Company covenants
that it will permit any Person designated by any Significant
Holder in writing, at such Significant Holder's expense, to
visit and inspect any of the properties of the Company and
its Subsidiaries, to examine the corporate books and
financial records of the Company and its Subsidiaries and to
make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations
with the principal officers of the Company and its
independent public accountants, all at such reasonable times
and as often as such Significant Holder may reasonably
request.
5C. COVENANT TO SECURE NOTES EQUALLY. The Company
covenants that, if it or any Subsidiary shall create or
assume any Lien upon any of its property or assets, whether
now owned or hereafter acquired, other than Liens permitted
by the provisions of paragraph 6B(1) (unless prior written
consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C), it will make or
cause to be made effective provision whereby the Notes will
be secured by such Lien equally and ratably with any and all
other Debt thereby secured so long as any such other Debt
shall be so secured.
5D. MAINTENANCE OF INSURANCE. The Company
covenants that it and each Subsidiary will maintain, with
responsible insurers, insurance in such amounts and against
such liabilities and hazards as customarily is maintained by
other companies operating similar businesses and together
with each delivery of financial statements of the Company
and its Subsidiaries under clause (ii) of paragraph 5A,
will, at your option, deliver an Officer's Certificate
specifying the details of such insurance in effect.
5E. TAXES AND ASSESSMENTS. The Company will duly
pay and discharge, and cause each of its Subsidiaries duly
to pay and
3
<PAGE> 65
discharge, as the same become due and payable, all taxes,
assessments and governmental and other charges, of which the
Company and its Subsidiaries have notice, levied or imposed
upon the properties of the Company and its Subsidiaries,
provided that the Company or any such Subsidiary may in good
- --------
faith contest the validity of any such tax, assessment,
charge, levy or claim by appropriate proceedings for which
adequate reserves have been established in accordance with
generally accepted accounting principles.
5F. GUARANTEED OBLIGATION . The Company covenants
that if, at any time any of its Subsidiaries incurs or
permits to exist any Debt for money borrowed or other
obligation guaranteed or collateralized in any other manner
by any Subsidiary, it will simultaneously cause such
Subsidiary to execute and deliver to each Significant Holder
a guaranty agreement in form and substance satisfactory to
such Significant Holder guaranteeing payment of a principal
amount of the Notes and interest thereon which bears the
same ratio to the total unpaid principal amount of the Notes
as the amount of such other obligation which is guaranteed
bears to the total unpaid principal amount of such other
obligation, or if such other obligation is collateralized
(with assets other than margin stock), to collateralize the
Notes equally and ratably with such other obligation."
2. Amendment to Paragraph 6. Paragraph 6 of the Note
------------------------
Agreement is hereby deleted in its entirety and replaced
with the following:
"6. NEGATIVE COVENANTS. So long as any Note
shall remain unpaid, the Company covenants that:
6A. FINANCIAL COVENANTS. The Company shall not
permit:
6A(l). CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth at any time to be less than
$151,300,000.
6A(2). FUNDED DEBT. Funded Debt to exceed 55% of
Consolidated Net Tangible Assets.
6A(3). DEBT. Debt to exceed 60% of Consolidated
Net Tangible Assets plus Current Debt.
----
6B. LIEN, DEBT, AND OTHER RESTRICTIONS. The
Company will not and will not permit any Subsidiary to:
6B(l). LIENS. Create, assume or suffer to exist
any Lien upon any of its properties or assets, whether now
owned or hereafter acquired (whether or not provision is
made for the equal and ratable securing of the Note in
accordance with the provisions of Paragraph 5C), except,
------
4
<PAGE> 66
(i) Liens for taxes not yet due or which are
being actively contested in good faith by
appropriate proceedings,
(ii) other Liens incidental to the conduct of
its business or the ownership of its property and
assets which are not incurred in connection with
the borrowing of money or the obtaining of
advances or credit or guaranteeing the obligations
of a Person (including landlord liens), and which
do not in the aggregate materially detract from
the value of its property or assets or materially
impair the use thereof in the operation of its
business,
(iii) Liens on property or assets of a
Subsidiary to secure obligations of such
Subsidiary to the Company or another Subsidiary,
(iv) existing Liens on property of the
Company as of January 27, 1996 as described in
Schedule 6B(1) attached hereto and securing Debt
--------------
permitted by clause (ii) of paragraph 6B(2),
(v) Liens existing on any property of any
corporation at the time it becomes a Subsidiary,
or existing prior to the time of acquisition upon
any property acquired by the Company or any
Subsidiary through purchase, merger or
consolidation or otherwise, whether or not assumed
by the Company or such Subsidiary, or placed on
property at the time of acquisition by the Company
or any Subsidiary to secure all or a portion of
(or to secure Debt incurred to pay all or a
portion of) the purchase price thereof provided
--------
that (a) all of such property is not or shall not
thereby become encumbered in any amount in excess
of the lesser of the cost thereof or fair value
thereof and (b) any such Lien shall not encumber
any other property of the Company or such
Subsidiary,
(vi) any Lien renewing, extending or
refunding any Lien permitted by clause (v) above,
provided that the principal amount secured is not
--------
increased, and the Lien is not extended to other
property, and
(vii) other Liens on the property of the
Company, provided that the aggregate amount of all
--------
Debt (including Capitalized Lease Obligations)
secured by Liens permitted by clauses (v), (vi)
and (vii) of this paragraph 6B(1) plus the
aggregate amount of all Attributable Debt does not
exceed at any time an amount equal to 15% of
Consolidated Net Tangible Assets.
5
<PAGE> 67
6B(2). DEBT. Create, incur, assume or suffer
to exist any Debt, except
------
(i) Funded Debt of the Company represented by
the Notes,
(ii) Funded Debt or Current Debt of the
Company and any Subsidiary secured by Liens
permitted by the provisions of clauses (v), (vi)
and (vii) of paragraph 6B(1), provided that the
--------
aggregate amount of such Debt together with all
other Debt secured by Liens permitted by clauses
(v), (vi) and (vii) of paragraph 6B(1) does not
exceed at any time an amount equal to 15% of
Consolidated Net Tangible Assets,
(iii) Funded Debt or Current Debt of any
Subsidiary to the Company or any other Subsidiary,
and
(iv) other Debt of the Company permitted by
paragraphs 6A(2) and 6A(3).
6B(3). LOANS, ADVANCES, INVESTMENTS AND CONTINGENT
LIABILITIES. Make or permit to remain outstanding any loan
or advance to, or extend credit (other than credit extended
in the normal course of business to any Person who is not an
Affiliate of the Company) to, or guarantee, endorse or
otherwise be or become contingently liable, directly or
indirectly, in connection with the obligations, stock or
dividends of, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or
make any capital contribution to, any Person, except as
approved by or in accordance with guidelines or corporate
policies approved or authorized by the Company's Board of
Directors from time to time.
6B(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES.
Sell or otherwise dispose of, or part with control of, any
shares of stock (or options, warrants or other rights
convertible into shares of stock) or Debt of any Subsidiary,
except
- ------
(i) to the Company or another Subsidiary; or
(ii) where the consummation of the sale of
such shares of stock, or options, warrants or
other rights convertible into shares of stock, of
the Subsidiary will not, directly, or upon the
exercise of any options, warrants or other rights
convertible into stock of such Subsidiary, result
in such Subsidiary's ceasing to be a Subsidiary
within the meaning of paragraph 10A; or
(iii) where the consummation of the sale of
such shares of stock (or options, warrants or
other rights
6
<PAGE> 68
convertible into shares of stock) (A) is permitted
by paragraph 6B(5), and (B) will effect a transfer
of all, but not less than all, of the Company's
record and beneficial ownership of such
Subsidiary.
6B(5). MERGER AND SALE OF ASSETS. Merge or
consolidate with or any other Person or convey, lease,
transfer or, in any fiscal year, otherwise dispose of all or
a substantial part (i.e. assets which constitute more than
25% of the consolidated assets of the Company and its
Subsidiaries or which have contributed more than 15% of the
consolidated net earnings of the Company and its
Subsidiaries for either of the two fiscal years then most
recently ended) of its assets to any Person, except that
------
(i) any Subsidiary may merge with the
Company (provided that the Company shall be the
--------
continuing or surviving corporation) or with any
one or more other Subsidiaries,
(ii) any Subsidiary may sell, lease, transfer
or otherwise dispose of any of its assets to the
Company or another Subsidiary,
(iii) the Company may merge with any other
corporation, provided that (a) the Company shall
--------
be the continuing or surviving corporation, and
(b) immediately after giving effect to such merger
no Event of Default or Default shall exist,
(iv) any Subsidiary may merge or consolidate
with any other corporation, provided that,
--------
immediately after giving effect to such merger or
consolidation (a) the continuing or surviving
corporation of such merger or consolidation shall
constitute a Subsidiary, and (b) no Event of
Default or Default shall exist, and
(v) the Company and any Subsidiary may sell
or otherwise dispose of inventory in the ordinary
course of business.
6B(6). SALE OR LEASE-BACK. Enter into any
arrangement with any lender or investor or to which such
lender or investor is a party providing for the leasing by
the Company or any Subsidiary of real or personal property
which has been or is to be sold or transferred by the
Company or any Subsidiary to such lender or investor or to
any Person to whom funds have been or are to be advanced by
such lender or investor on the security of such property or
rental obligations of the Company or any Subsidiary unless
the Attributable Debt in respect of such transaction is not
prohibited by the proviso at the end of paragraph 6B(1).
7
<PAGE> 69
6B(7). ISSUANCE OF STOCK BY SUBSIDIARIES. The
Company covenants that it will not permit any Subsidiary
(either directly, or indirectly by the issuance of rights or
options for, or securities convertible into, such shares) to
issue, sell or otherwise dispose of any shares of any class
of its stock (other than directors' qualifying shares)
except
(i) to the Company or a Subsidiary; or
(ii) to an extent which does not result in
such Subsidiary's ceasing to be a Subsidiary
within the meaning of paragraph 10A."
2. Amendment to Paragraph 7. Clauses (i), (ii),
------------------------
(iii) and (xiv) of Paragraph 7A of the Note Agreement are
hereby deleted in their entirety and replaced with the
following:
"(i) the Company defaults in the payment of
any principal of, or Yield Maintenance Premium
payable with respect to, any Note when the same
shall become due, either by the terms thereof or
otherwise as herein provided; or
(ii) the Company defaults in the payment of
any interest on any Note for more than 5 Business
Days after the date due; or
(iii) the Company or any Subsidiary defaults
(whether as primary obligor or as guarantor or
other surety) in any payment of principal of or
interest on any other obligation for money
borrowed (or any Capitalized Lease Obligation, any
obligation under a conditional sale or other title
retention agreement, any obligation issued or
assumed as full or partial payment for property
whether or not secured by a purchase money
mortgage or any obligation under notes payable or
drafts accepted representing extensions of credit)
beyond any period of grace provided with respect
thereto, or the Company or any Subsidiary fails to
perform or observe any other agreement, term or
condition contained in any agreement under which
any such obligation is created (or if any other
event thereunder or under any such agreement shall
occur and be continuing) and the effect of such
failure or other event is to cause, or to permit
the holder or holders of such obligation (or a
trustee on behalf of such holder or holders) to
cause, such obligation to become due (or to be
repurchased by the Company or any Subsidiary)
prior to any stated maturity, provided that the
--------
aggregate amount of all obligations as to which
such a payment default shall occur and be
continuing or
8
<PAGE> 70
such a failure or other event causing or
permitting acceleration (or resale to the Company
or any Subsidiary) shall occur and be continuing
exceeds $5,000,000; or"
"(xiv) any Plan shall fail to maintain the
minimum funding standard required by Section 412
of the Code for any plan year, or any Plan shall
become the subject of termination proceedings
under Title IV of ERISA (except in the case of a
standard termination under Section 4041(b) of
ERISA), or the Company or any ERISA Affiliate
shall withdraw from a Multiemployer Plan in whole
or in part or any Plan subject to Title IV of
ERISA or any Multiemployer Plan shall be
terminated (except in the case of a standard
termination under Section 4041(b) of ERISA); and
as a result of any one or more of the foregoing
there exists a liability of the Company or any
Subsidiary to the Internal Revenue Service, the
Pension Benefit Guaranty Corporation, any Plan or
any Multiemployer Plan, in an aggregate amount
exceeding $1,000,000 (or the equivalent amount in
any foreign currency;"
3. Amendment to Paragraph 10. The following
-------------------------
definitions of the Note Agreement are hereby deleted in
their entirety and replaced with the following:
"'CONSOLIDATED NET TANGIBLE ASSETS' shall
mean, as of the date of any determination thereof, the
total amount of all assets of the Company and its
Subsidiaries, less the sum of:
(i) the amount, if any, at which intangible
assets(including good will, trade names,
trademarks, patents, organization expense and
other similar intangibles but excluding
acquired customer contracts and non-
competition agreements and unamortized debt
discount and expense appear on a consolidated
balance sheet;
(ii) any write-up of fixed assets after the date
of this Agreement; and
(iii) all liabilities other than (a) Funded Debt
and (b) the amount by which minority interest
and deferred taxes (whether current or long-
term), when aggregated together, does not
exceed 3% of the total amount of all assets
of the Company and its Subsidiaries."
"'CURRENT DEBT' shall mean, with respect to the
Company and its Subsidiaries on a consolidated basis,
any obligation
9
<PAGE> 71
for borrowed money (and any notes payable and drafts
accepted representing extensions of credit whether or
not representing obligations for borrowed money)
payable on demand or within a period of one year from
the date of the creation thereof; provided that any
--------
obligation shall be treated as Funded Debt, regardless
of its term, if such obligation is renewable pursuant
to the terms thereof or of a revolving credit or
similar agreement effective for more than one year
after the date of the creation of such obligation, or
may be payable out of the proceeds of a similar
obligation pursuant to the terms of such obligation or
of any such agreement. Any obligation secured by a
Lien on, or payable out of the proceeds of production
from, property of the Company or any Subsidiary shall
be deemed to be Funded or Current Debt, as the case may
be, of the Company or such Subsidiary even though such
obligation shall not be assumed by the Company or such
Subsidiary."
"CONSOLIDATED TANGIBLE NET WORTH" shall mean the
sum of the gross book value of the assets of the Company and
its Subsidiaries less applicable reserves, goodwill,
patents, trademarks and other intangibles (other than the
book value of non-compete agreements and contracts obtained
in connection with acquisitions up to an amount equal to 10%
of Consolidated Net Tangible Assets), treasury stock,
unamortized debt discounts, certain deferred expenses
including deferred taxes (whether current or long-term) and
all liabilities (including deferred income taxes) other
than capital stock and surplus, all determined on a
consolidated basis in accordance with generally accepted
accounting principles.
"'SIGNIFICANT SUBSIDIARY' shall mean any
Subsidiary whose assets constitute more than 5% of the
consolidated assets of the Company and its Subsidiaries or
which has contributed more than 5% of the consolidated net
earnings of the Company and its Subsidiaries for either of
the two fiscal years then most recently ended."
4. Miscellaneous.
-------------
(a) Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Note
Agreement.
(b) The Note Agreement, as amended by this
Amendment Agreement, is and shall continue to be in full
force and effect and is hereby in all respects ratified and
confirmed.
(c) This Amendment Agreement No. 1 may be
executed in any number of counterparts and by any
combination of the parties hereto in separate counterparts,
each of which constitute one and the same Agreement.
10
<PAGE> 72
IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to set their hands below as
of the day and year first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Paul L. Meiring
----------------------------
Vice President
ANGELICA CORPORATION
By: /s/ T M Armstrong
----------------------------
Senior Vice President--
Chief Financial Officer
11
<PAGE> 1
TERM LOAN AGREEMENT
by and between
ANGELICA CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
dated as of
October 2, 1995
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
----- -- --------
<CAPTION>
Section Page
<S> <C>
Preamble. . . . . . . . . . . . . . . . . . . . 1
1. Definitions. . . . . . . . . . . . . . . . 1
2. The Term Loan. . . . . . . . . . . . . . . 4
3. Representations and Warranties . . . . . . 7
4. Conditions Precedent . . . . . . . . . . . 8
5. Covenants. . . . . . . . . . . . . . . . . 8
6. Events of Default; Acceleration. . . . . . 10
7. Setoff . . . . . . . . . . . . . . . . . . 12
8. Miscellaneous. . . . . . . . . . . . . . . 12
</TABLE>
<PAGE> 3
TERM LOAN AGREEMENT
---- ---- ---------
This TERM LOAN AGREEMENT (this "Agreement") is made as of
---------
October 2, 1995, by and between ANGELICA CORPORATION (the
"Borrower"), a Missouri corporation having its principal place
--------
of business at 424 South Woods Mill Road, Chesterfield,
Missouri 63017, and with a place of business at 1 Hoyt Street,
Boston Massachusetts 02125, and THE FIRST NATIONAL BANK OF
BOSTON (the "Bank"), a national banking association with its
----
head office at 100 Federal Street, Boston, Massachusetts
02110.
Section 1. DEFINITIONS: Certain capitalized terms
-----------
are defined below:
Agreement: See preamble, which term shall include this
---------
Agreement as amended and in effect from time to time.
Balance Sheet Date: January 28, 1995.
------- ----- ----
Bank: See the preamble.
----
Borrower: See the preamble.
--------
Business Day: Any day on which banks in Boston,
-------- ---
Massachusetts, are open for business generally.
Charter Documents: In respect of any entity, the
------- ---------
certificate or articles of incorporation or organization and
the by-laws of such entity, or other constitutive documents of
such entity.
Code: The Internal Revenue Code of 1986, as amended.
----
Consent: In respect of any person or entity, any permit,
-------
license or exemption from, approval, consent of, registration
or filing with any local, state or federal governmental or
regulatory agency or authority, required under applicable law.
Consolidated: When used with respect to Attributable
------------
Indebtedness, Funded Debt or Net Worth shall mean the
Attributable Indebtedness, funded Debt or Net Worth, as the
case may be, of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP.
<PAGE> 4
- 2 -
Consolidated Net Tangible Assets: Shall, without
------------ --- -------- ------
duplication, mean as of the date of any determination thereof,
the total amount of all assets of the Borrower and its
Restricted Subsidiaries less the sum of:
(a) the amount, if any, at which intangible assets
(including goodwill, trade names, trademarks, patents,
organization expense and other similar intangibles but
excluding acquired customer contracts and non-competition
agreements) and unamortized debt discount and expense
appear on a consolidated balance sheet;
(b) any write-up of fixed assets after the date of
this Agreement; and
(c) all liabilities other than minority interests
in Subsidiaries, deferred taxes and consolidated Funded
Debt.
Cost of Funds: See Section 2.3.
---- -- -----
Default: An event or act which with the giving of notice
-------
and/or the lapse of time, would become an Event of Default.
Deposit Account: The Borrower's bank account no. 561-
------- -------
02514 maintained with the Bank.
Environmental Laws: All laws pertaining to
------------- ----
environmental matters, including without limitation, the
Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, in each case as amended, and all
rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.
ERISA: The Employee Retirement Income Security Act of
-----
1974, as amended, and all rules, regulations, judgments,
decrees, and orders arising thereunder.
Event of Default: Any of the events listed in Section 6
----- -- -------
hereof.
Financials: In respect of any period, the balance sheet
----------
of any person or entity as at the end of such period, and the
related statement of income and statement of cash flow for
such period, each setting forth in comparative form the
figures for the previous comparable fiscal period, provided
--------
that the Financials for any fiscal year of the Borrower shall
- ----
be in reasonable detail and prepared in accordance with GAAP
and the Financials for any fiscal quarter of the Borrower
shall be in reasonable detail and prepared in accordance with
GAAP.
<PAGE> 5
- 3 -
Funded Debt of any Person: Shall mean (a) all
------ ---- -- --- ------
Indebtedness of such Person for borrowed money or which has
been incurred in connection with the acquisition of assets in
each case having a final maturity of one or more than one year
from the date of determination thereof (or which is renewable
or extendible at the option of the obligor for a period or
periods more than one year from the date of determination),
(b) all Capitalized Rentals of such Person of Funded Debt of
other.
GAAP: Generally accepted accounting principles
----
consistent with those adopted by the Financial Accounting
Standards board and its predecessor, (a) generally, as in
-
effect from time to time, and (b) for purposes of determining
-
compliance by the Borrower with its financial covenants set
forth herein, as in effect for the fiscal year therein
reported in the most recent Financials submitted to the Bank
prior to execution of this Agreement.
Indebtedness: In respect of any entity, all obligations,
------------
whether direct or indirect, contingent and otherwise, that in
accordance with GAAP should be classified as liabilities,
including without limitation (a) all debt obligations, (b) all
- -
liabilities secured by Liens, (c) all guarantees and (d) all
- -
liabilities in respect of banker's acceptances or letters of
credit.
Liens: Any encumbrance, mortgage, pledge, hypothecation,
-----
charge, restriction or other security interest of any kind
securing any obligation of any entity or person.
Loan: The Term Loan.
----
Loan Documents: This Agreement and the Term Note, in
---- ---------
each case as from time to time amended or supplemented.
Materially Adverse Effect: Any materially adverse effect
---------- ------- ------
on the financial condition or business operations of the
Borrower or material impairment of the ability of the Borrower
to perform its obligations hereunder or under any of the other
Loan Documents.
Negative Spread: See Section 2.3.
-------- ------
Net Worth: As of the date of any determination thereof,
--- -----
the amount of the capital stock accounts (net of treasury
stock, at cost) plus (or minus in the case of a deficit) the
surplus and retained earnings of the Borrower and its
Restricted Subsidiaries determined in accordance with GAAP.
Obligations: All indebtedness, obligations and
-----------
liabilities of the Borrower to the Bank, existing on the date
of this Agreement or arising thereafter, direct or indirect,
joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any other loan Document or in
respect of any of the Loans or the Notes or other instruments
at any time evidencing any thereof.
<PAGE> 6
- 4 -
Reinvestment Rate: See Section 2.3.
------------ ----
Requirement of Law: In respect of any person or entity,
----------- -- ---
any law, treaty, rule, regulation or determination of an
arbitrator, court, or other governmental authority, in each
case applicable to or binding upon such person or entity or
affecting any of its property.
Restricted Subsidiaries: Shall mean each Subsidiary (a)
---------- ------------
80% or more (by number of votes) of the voting stock of which
is legally and beneficially owned by the Borrower and/or one
or more Restricted Subsidiaries and (b) which has not been
designated in writing to the Bank as an Unrestricted
Subsidiary, provided that (i) no Restricted Subsidiary may be
designated an Unrestricted Subsidiary if, immediately after
giving effect thereto, a Default or Event of Default would
exist and (ii) immediately after giving effect to the
designation of such Restricted Subsidiary as an Unrestricted
Subsidiary (and at all times thereafter), such Subsidiary
shall have no Indebtedness of or continuing investment in the
capital stock or other securities of the Borrower or any other
Restricted Subsidiary.
Subordinated Debt: Unsecured Indebtedness of the
------------ ----
Borrower that is expressly subordinated and made junior to the
payment and performance in full of the Obligations on terms
and conditions satisfactory to the Bank.
Subsidiary: In respect of the Borrower, any business
----------
entity of which the Borrower at any time owns or controls
directly or indirectly more than fifty percent (50%) of the
outstanding shares of stock having voting power, regardless of
whether such right to vote depends upon the occurrence of a
contingency.
Term Loan: See Section 2.1.
---- ----
Term Note: See Section 2.1.
---- ----
Term Loan Maturity Date: January 31, 1999.
---- ---- -------- ----
Section 2. THE TERM LOAN.
--- ---- ----
Section 2.1. COMMITMENT TO LEND. Subject to the terms
---------- -- ----
and conditions set forth in this Agreement, the Bank agrees to
lend to the Borrower on the date hereof the amount of
$3,130,555.64 (the "Term Loan"). The obligation of the
---- ----
Borrower to repay to the Bank the principal of the Term Loan
and interest accrued thereon shall be evidenced by a
promissory note (the "Term Note") in the aggregate principal
---- ----
amount of $3,130,555.64 executed and delivered by the Borrower
and payable to the order of the Bank in form and substance
satisfactory to the Bank.
<PAGE> 7
- 5 -
Section 2.2. PAYMENTS OF PRINCIPAL OF TERM LOAN. The
-------- -- --------- -- ---- ----
Borrower agrees to repay the Term Loan in fourteen (14)
consecutive installments of principal and interest, the first
thirteen (13) of which shall be in the amount of $83,848.95
each, each such installment to be due and payable on the last
day of each calendar quarter of each calendar year, commencing
on December 31, 1995. The final payment shall be made on the
Term Loan Maturity Date, in an amount equal to the unpaid
balance of the Term Loan together with all accrued but unpaid
interest thereon. No amount repaid with respect to the Term
Loan may be reborrowed.
Section 2.3. PREPAYMENT OF TERM LOAN. The Borrower
---------- -- ---- ----
shall have the right at any time to prepay the Term Note on or
before the term Loan Maturity Date, as a whole, or in part,
upon not less than two (2) Business Days' prior written notice
to the Bank, of the amount to be prepaid and the date of such
prepayment, provided that each partial prepayment shall be in
--------
the principal amount of $10,000 or an integral multiple
thereof. All prepayments (whether in whole or in part and
whether voluntarily or by acceleration of the maturity thereof
by the Bank in accordance with the terms hereof) of the Term
Loan shall be accompanied by a prepayment premium in an amount
determined by the Bank in the following manner:
(i) First, the Bank shall determine its Cost of
-----
Funds with respect to each originally scheduled interest
payment hereunder in respect of the Term Loan based on
the principal amount of the Term Loan that would
otherwise be outstanding on such interest payment date if
such principal prepayment were not being made. The
Bank's "Cost of Funds" shall mean the rate used by the
Bank as its cost of funds in determining the fixed rate
applicable to the Term Loan.
(ii) Second, the Bank shall determine the
------
Reinvestment Rate applicable to each originally scheduled
interest payment hereunder in respect of the Term Loan
based on the principal amount of the Term Loan that would
otherwise be outstanding on such interest payment date if
such principal prepayment were not being made. The
"Reinvestment Rate" applicable to the amount of any such
interest payment shall mean the rate of interest on any
readily marketable bond or other obligation of the United
States, designated by the Bank in its sold discretion, in
an amount equal (as nearly as may be) to the total amount
of principal to be prepaid and having a term that most
closely matches the period beginning on the date of such
prepayment and ending on the date on which such interest
payment would otherwise be due if such principal
prepayment were not being made. The Reinvestment Rate
shall reflect the amortization of any discount from par
or accretion of premium above par at which such United
States obligation is selling at the time of the Bank's
designation.
(iii) Third, the Bank shall determine the excess,
-----
if any, of the amount produced by the calculation
referred to in (i) above over the amount produced by the
calculation referred to in (ii) above (the "Negative
Spread") as to each payment
<PAGE> 8
- 6 -
of interest that would otherwise be due hereunder in
respect of the Term Loan if such principal prepayment
were not being made. The Bank shall then determine the
present value of the Negative Spread of each such
installment of interest, using as a discount factor the
Reinvestment Rate applicable to such interest
installment determined pursuant to paragraph (ii)
above.
(iv) Fourth, the Bank shall determine the sum of
------
the present values of the Negative Spreads for all such
installments of interest. The resulting sum shall be the
prepayment premium payable by the Borrower with respect
to such principal prepayment of the Term Loan.
Each prepayment of principal of the Term Loan shall be
accompanied by, and the Borrower hereby promises to pay,
payment of the applicable prepayment premium and the unpaid
interest accrued to the date of such prepayment and shall be
applied against the installments of principal due in inverse
order of maturity. No amount prepaid with respect to the Term
Loan may be reborrowed.
Section 2.4. INTEREST ON TERM LOAN. Except as
-------- -- ---- ----
otherwise provided in Section 2.6 hereof, the outstanding
principal amount of the Term Loan shall bear interest at a
rate per annum equal to 6.84% per annum, such interest to be
payable as provided for in Section 2.2 above.
Section 2.5. FUNDS FOR PAYMENTS; COMPUTATIONS. All
----- --- -------- ------------
payments to be made by the Borrower hereunder shall be made in
U.S. dollars at the Bank's head office at 100 Federal Street,
Boston, Massachusetts, without set-off or counterclaim and
without any withholding or deduction whatsoever. So long as
the Borrower maintains in the Deposit Account a ledger balance
in amounts sufficient to make such payments when due, the Bank
shall, and the Borrower hereby authorizes the Bank to, debit
the Deposit Account by the amount of each such payment. Also,
the Bank shall be entitled to charge any other account of the
Borrower with the Bank for any sum due and payable by the
Borrower to the Bank hereunder or under any of the other Loan
Documents. If any payment hereunder is required to be made on
a day which is not a Business Day, it shall be paid on the
immediately preceding Business Day. All computations of
interest and of the commitment fee payable hereunder shall be
made by the Bank on the basis of actual days elapsed on a 360-
day year.
Section 2.6. INTEREST AFTER DEFAULT. While an Event of
-------- ----- -------
Default is continuing, amounts payable under any of the Loan
Documents shall bear interest (compounded monthly and payable
on demand in respect of overdue amounts) at a rate per annum
which is equal to two percent (2%) above the rate of interest
otherwise in effect in respect of the Term Loan, until such
amount is paid in full or (as the case may be) such Event of
Default has been cured or waived in writing by the Bank (after
as well as before judgment).
Section 2.7. CHANGES IN CIRCUMSTANCES. If after the
------- -- -------------
date hereof the Bank determines that (a) the adoption of or
-
any change in any banking law, rule, regulation or guideline or
<PAGE> 9
- 7 -
the administration thereof (whether or not having the force
of law), or (b) compliance by the Bank or its parent bank
-
holding company with any guideline, request or directive
(whether or not having the force of law), has the effect of
reducing the return on the Bank's or such holding company's
capital as a consequence of the Loan to a level below that
which the Bank or such holding company could have achieved but
for such adoption, change or compliance by any amount deemed
by the Bank to be material, the Bank may notify the Borrower
thereof. The Borrower agrees to pay the Bank the amount of
the Borrower's allocable share of the amount of such reduction
in the return on capital as and when such reduction is
determined, upon presentation by the Bank of a statement in
the amount and setting forth the Bank's calculation thereof,
which statement shall be deemed true and correct absent
manifest error. The Bank agrees to allocate shares of such
reduction among the Borrower and the Bank's other customers
similarly situated on a fair and non-discriminatory basis.
Section 3. REPRESENTATIONS AND WARRANTIES. The
--------------- --- ----------
borrower represents and warrants to the Bank on the date
hereof:
(a) The Borrower is duly organized, validly existing
-
and in good standing under the laws of its jurisdiction of
incorporation; and the execution, delivery and performance by
the Borrower of the Loan Documents (i) are within such
-
entity's corporate authority, (ii) have been duly authorized,
--
(iii) do not conflict with or contravene its Charter
---
Documents.
(b) Upon execution and delivery thereof, each Loan
-
Document shall constitute the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its
terms.
(c) The Borrower has good and marketable title to all
-
its properties, subject only to Liens permitted hereunder, and
possesses all assets, including intellectual properties,
franchises and Consents, adequate for the conduct of its
business as now conducted, without known conflict with any
rights of others. The Borrower maintains insurance with
financially responsible insureres covering such risks and in
such amounts and with such deductibles as are customary in the
Borrower's business and are adequate.
(d) The Borrower has provided to the Bank audited
-
Financials as at the Balance Sheet Date and for the fiscal
period then ended, and such Financials are complete and
correct and fairly present the position of the Borrower as at
such date and for such period in accordance with GAAP
consistently applied.
(e) On the date hereof, since the Balance Sheet Date,
-
the Company is and has been in compliance with the covenants
contained in Section 5(b) hereof (calculated in each case as
of the date hereof).
<PAGE> 10
- 8 -
(f) There are no legal or other proceedings or
-
investigations pending or threatened against the Borrower
before any court, tribunal or regulatory authority which
would, if adversely determined, alone or together, have a
Materially Adverse Effect.
(g) The execution, delivery, performance of its
-
obligations, and exercise of its rights under the Loan
Documents by the Borrower, including borrowing under this
Agreement (i) do not require any Consents; and (ii) are not
- --
and will not be in conflict with or prohibited or prevented by
(A) any Requirement of Law, or (B) any Charter Document,
- -
corporate minute or resolution, instrument, agreement or
provision thereof in each case binding on it or affecting its
property.
(h) The Borrower is not in violation of (i) any Charter
- -
Document, corporate minute or resolution, (ii) any instrument
--
or agreement, in each case binding on it or affecting its
property, or (iii) any Requirement of Law, in a manner which
---
could have a Materially Adverse Effect, including, without
limitation, all applicable federal and state tax laws, ERISA
and Environmental Laws.
Section 4. CONDITIONS PRECEDENT. In addition to
---------- ---------
the making of the foregoing representations and warranties and
the delivery of the Loan Documents and such other documents
and the taking of such actions as the Bank may require, the
obligation of the Bank to make the Loan to the Borrower
hereunder is subject to the satisfaction of the following
further conditions precedent:
(a) Each of the representations and warranties of the
-
Borrower to the Bank herein, in any of the Loan Documents or
any document, certificate or other paper or notice in
connection herewith, shall be true and correct in all material
respects as of the time made or claimed to have been made.
(b) No Default or Event of Default shall be continuing.
-
(c) All proceedings in connection with the transactions
-
contemplated hereby shall be in form and substance
satisfactory to the Bank, and the Bank shall have received all
information and documents as it may have reasonably requested.
No change shall have occurred in any law or regulation or in
the interpretation thereof that in the reasonable opinion of
the Bank would make it unlawful for the Bank to make such
Loan.
<PAGE> 11
- 9 -
Section 5. COVENANTS.
---------
(a) The Borrower will comply with its obligations as
set forth throughout this Agreement and will:
(i) furnish the Bank: (A) as soon as available
- -
but in any event within ninety (90) days after the close
of each fiscal year, its audited Financials for such
fiscal year, certified by the Borrower's accountants; (B)
-
as soon as available but in any event within forty-five
(45) days after the end of the second fiscal quarter in
each fiscal year, its unaudited Financials for the six
month period then ended, certified by its chief financial
officer or treasurer; and (C) together with the semi-
-
annual unaudited and annual audited Financials, a
certificate of the Borrower setting forth computations
demonstrating compliance with the Borrower's financial
covenants set forth herein, and certifying that no
default or Event of Default has occurred, or if it has,
the actions taken by the Borrower with respect thereto;
(ii) keep true and accurate books of account in
--
accordance with GAAP, maintain its current fiscal year
and permit the Bank or its designated representatives to
inspect the Borrower's premises and examine and be
advised as to such or other business records upon the
request of the Bank, and permit the Bank's commercial
finance examiners to conduct periodic commercial finance
examinations;
(iii) (A) maintain its corporate existence,
--- -
business and assets; (B) keep its business and assets
-
adequately insured; (C) maintain its chief executive
-
office in the United States; (D) continue to engage in
-
the same lines of business and; (E) comply with all
-
Requirements of Law, including ERISA and Environmental
Laws;
(iv) notify the Bank promptly in writing of (A)
-- -
the occurrence of any Default or Event of Default; (B)
-
any noncompliance with ERISA or any Environmental Law or
proceeding in respect thereof which could have a
Materially Adverse Effect; (C) any change of address; (D)
- -
any threatened or pending material litigation or similar
proceeding affecting the Borrower or any material change
in any such litigation or proceeding previously reported;
(E) claims against any assets or properties of the
-
Borrower encumbered in favor of the Bank; and (F) any
-
other condition or event which could have a Materially
Adverse Effect;
(v) use the proceeds of the Loans for general
-
working capital purposes and the refinancing of
Indebtedness, and not for the carrying of "margin
security" or "margin stock" within the meaning of
Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224;
<PAGE> 12
- 10 -
(vi) cooperate with the Bank, take such action,
--
execute such documents, and provide such information as
the Bank may from time to time reasonably request in
order further to effect the transactions contemplated by
and the purposes of the Loan Documents, including without
limitation the delivery at the Borrower's expense of
additional security, appraisals, or environmental
assessments.
(vii) at all times keep and maintain Consolidated
---
Net Worth at an amount not less than $145,000,000.
(b) The Borrower will not:
-
(i) itself, or permit any Restricted Subsidiary
-
to, create, issue, assume, guarantee or otherwise incur
or in any manner become liable in respect of any Funded
Debt, except:
(A) Funded Debt evidenced by the Note;
-
(B) Funded Debt of the Borrower and its
-
Restricted Subsidiaries outstanding as of July 29,
1995 and described on Schedule I attached to this
Agreement;
(C) additional Funded Debt of the Borrower
-
and its Restricted Subsidiaries, provided that at
the time of issuance thereof and after giving
effect thereto and to the application of the
proceeds thereof, consolidated Funded Debt would
not exceed 55% of Consolidated Net Tangible
Assets; and
(D) Funded Debt of a Restricted Subsidiary to
-
the Borrower or to a wholly-owned Restricted
Subsidiary;
(ii) Funded Debt issued or incurred in accordance
--
with the limitations of Section 5(b)(i)(A) and (B) above
- -
may be renewed, extended or refunded (without any
increase in principal; amount remaining unpaid at the
time of such renewal, extension or refunding) without
regard to the limitations of Section 5(b)(i)(C) above;
- -
(iii) any corporation which becomes a Restricted
---
Subsidiary after the date hereof shall for all purposes
of this Section 5(b) be deemed to have created, assumed
or incurred at the time it becomes a Restricted
Subsidiary all Funded Debt of such corporation existing
immediately after it becomes a Restricted Subsidiary.
Section 6. EVENTS OF DEFAULT; ACCELERATION. If any of
------ -- ------- ------------
the following events ("Events of Default") shall occur:
------ -- -------
<PAGE> 13
- 11 -
(a) the Borrower shall fail to pay when due and payable
-
any principal of the Loan within ten (10) Business Days after
the date on which the same shall have first become due and
payable;
(b) the Borrower shall fail to pay interest on the
-
Loans or any other sum due under any of the Loan Documents
within ten (10) Business Days after the date on which the same
shall have first become due and payable;
(c) the Borrower shall fail to perform any term,
-
covenant or agreement contained in Section 5(a)(i),(iii)
through (vi), or 5(b) hereof;
(d) the Borrower shall fail to perform any other term,
-
covenant or agreement contained in the Loan Documents within
fifteen (15) days after the Bank has given written notice of
such failure to the Borrower;
(e) any representation or warranty of the Borrower in
-
the Loan Documents or in any certificate or notice given in
connection therewith shall have been false or misleading in
any material respect at the time made or deemed to have been
made;
(f) the Borrower shall be in default (after any
-
applicable period of grace or cure period) under any agreement
or agreements evidencing Indebtedness owing to the Bank or any
affiliate of the Bank or in excess of $25,000 in aggregate
principal amount, or shall fail to pay such Indebtedness when
due, or within any applicable period of grace;
(g) any of the Loan Documents shall cease to be in full
-
force and effect;
(h) the Borrower (i) shall make an assignment for the
- -
benefit of creditors, (ii) shall be adjudicated bankrupt or
--
insolvent, (iii) shall seek the appointment of, or be the
---
subject of an order appointing, a trustee, liquidator or
receiver as to all or part of its assets, (iv) shall commence,
--
approve or consent to, any case or proceeding under any
bankruptcy, reorganization or similar law and, in the case of
an involuntary case or proceeding, such case or proceeding is
not dismissed within 45 days following the commencement
thereof, or (v) shall be the subject of an order for relief in
-
an involuntary case under federal bankruptcy law;
(i) the Borrower shall be unable to pay debts as they
-
mature;
(j) there shall remain unbonded and undischarged for
-
more than thirty (30) days any final judgment or execution
action against the Borrower that, together with other
outstanding claims and execution actions against the Borrower
exceeds $25,000 in the aggregate;
THEN, or at any time thereafter:
<PAGE> 14
- 12 -
(1) In the case of any Event of Default under Section
-
6(g) or (h), the entire unpaid principal amount of the Loans,
- -
all interest accrued and unpaid on the Loans, and all other
amounts payable hereunder and under the other Loan Documents
shall automatically become forthwith due and payable, without
presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by the Borrower; and
(2) In the case of any Event of Default other than
-
under Section 6(g) or (h), the Bank may, by written notice to
- -
the Borrower, declare the unpaid principal amount of the
Loans, all interest accrued and unpaid on the Loan and all
other amounts payable hereunder and under the other Loan
Documents to be forthwith due and payable, without
presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower.
No remedy herein conferred upon the Bank is intended to
be exclusive of any other remedy and each and every remedy
shall be cumulative and in addition to every other remedy
hereunder, now or hereafter existing at law or in equity or
otherwise.
Section 7. SETOFF. Regardless of the adequacy of any
------
collateral for the Obligations, any deposits or other sums
credited by or due from the Bank to the Borrower may be
applied to or set off against any principal, interest and any
other amounts due from the Borrower to the Bank at any time
without notice to the Borrower, or compliance with any other
procedure imposed by statute or otherwise, all of which are
hereby expressly waived by the Borrower.
Section 8. MISCELLANEOUS. The Borrower agrees to
-------------
indemnify and hold harmless the Bank and its officers,
employees, affiliates, agents and controlling persons from and
against all claims, damages, liabilities and losses of every
kind arising out of the Loan Documents, including without
limitation against those in respect of the application of
Environmental Laws to the Borrower, absent the gross
negligence or willful misconduct of the Bank. The Borrower
shall pay to the Bank promptly on demand all costs and
expenses (including any taxes, other than taxes based upon or
measured by the income or profits of the Bank, and reasonable
legal fees and other professional fees and fees of its
commercial finance examiner) incurred by the Bank in
connection with the preparation, negotiation, execution,
amendment, administration or enforcement of any of the Loan
Documents. Any communication to be made hereunder shall (i)
-
be made in writing, but unless otherwise stated, may be made
by telex, facsimile transmission or letter, and (ii) be made
--
or delivered to the address of the party receiving notice
which is identified with its signature below (unless such
party has by five (5 days' written notice specified another
address), and shall be deemed made or delivered, when
dispatched, left at that address, or five (5) days after being
mailed, postage prepaid, to such address. This Agreement
shall be binding upon and inure to the benefit of each party
hereto and its successors and assigns, but the Borrower may
not assign its rights or obligations hereunder. This
Agreement may not be amended or waived except by a written
instrument signed by the Borrower and the Bank, and any such
amendment or waiver shall be effective only for the
<PAGE> 15
- 13 -
specific purpose given. No failure or delay by the Bank to
exercise if any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other right, power or
privilege. The provisions of this Agreement are severable
and if any one provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
invalidity or unenforceability shall affect only such
provision in such jurisdiction. This Agreement, together
with all Schedules hereto, expresses the entire
understanding of the parties with respect to the
transactions contemplated hereby. This Agreement and any
amendment hereby may be executed in several counterparts,
each of which shall be an original, and all of which shall
constitute one agreement. In proving this Agreement, it
shall not be necessary to produce more than one such
counterpart executed by the party to be charged. THIS
AGREEMENT AND THE NOTES ARE CONTRACTS UNDER THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE CONSTRUED IN
ACCORDANCE THEREWITH AND GOVERNED THEREBY. THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN. THE
BORROWER, AS AN INDUCEMENT TO THE BANK TO ENTER INTO THIS
AGREEMENT, HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION ARISING IN CONNECTION WITH ANY LOAN
DOCUMENT. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
<PAGE> 16
- 14 -
IN WITNESS WHEREOF, the undersigned have duly executed
this Term Loan Agreement as a sealed instrument as of the date
first above written.
ANGELICA CORPORATION
By: /s/ T M Armstrong
-------------------------------------
Theodore M. Armstrong
Senior Vice President and
Chief Financial Officer
424 South Woods Mill Road
Chesterfield, Missouri
Tel: (314) 854-3800
Fax: (314) 854-3890
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Janice E. Mercurio
-------------------------------------
Janice E. Mercurio, Vice President
100 Federal Street
Boston, Massachusetts 02110
Tel: (617) 434-3758
Fax: (617) 434-1279
<PAGE> 17
Schedule I
-------- -
<TABLE>
FUNDED DEBT OF THE COMPANY AND ITS
SUBSIDIARIES AS OF JULY 29, 1995
<CAPTION>
UNSECURED DEBT:
<S> <C>
Prudential Insurance Company of America $ 32,375,000
Prudential Insurance Company of America $ 10,000,000
Nationwide Life Insurance Company and
Employers Life Insurance Company of
Wausaw $ 25,000,000
Nationwide Life Insurance Company,
American United Life Insurance Company,
Aid Association for Lutherans and
Modern Woodmen of America $ 30,000,000
------------
$ 97,375,000
------------
<CAPTION>
PROPERTY SUBJECT TO LIENS:
<S> <C>
First Union National Bank $ 2,475,000
City of Lorain, OH $ 141,469
City of Philadelphia $ 259,794
Small Business Administration $ 315,591
------------
$ 3,191,854
------------
<CAPTION>
COMPANY OWNED LIFE INSURANCE:
<S> <C>
Various Life Insurance Companies $ 336,808
------------
<CAPTION>
CAPITALIZED LEASES:
<S> <C>
Various Leases $ 176,310
------------
TOTAL FUNDED DEBT $101,079,972
============
</TABLE>
<PAGE> 1
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE
ANGELICA CORPORATION STOCK OPTION PLAN
---------------------------
Angelica Corporation, a Missouri corporation (the "Company") and
the person designated in Section 1 below (the "Optionee"), hereby
agree as follows:
Section 1. Basic Terms.
--------- -----------
<TABLE>
<S> <C>
Name of Optionee: -----------------------------
Social Security Number of Optionee: -----------------------------
Number of Shares Subject to Option: -----------------------------
Option Price/Base Price Per Share: $----------------------------
Grant Date of Option: -----------------------------
Expiration Date of Option: -----------------------------
</TABLE>
Table Regarding Exercisability, SARs and Cash Features (see
Sections 4 and 6):
<TABLE>
<CAPTION>
Date of
Lot Number First SARs Granted Cash Features
No. of Shares Exercisability (# or NONE) (# or NONE)
- --- --------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
1 --------- -------------- ------------ -------------
2 --------- -------------- ------------ -------------
3 --------- -------------- ------------ -------------
4 --------- -------------- ------------ -------------
5 --------- -------------- ------------ -------------
</TABLE>
Is the grant conditioned on Shareholder Action? YES ---- NO ------
If YES, the Action Date referred to in Section 18 is: --------------
Section 2. Entire Agreement. This Agreement consists of the
--------- ----------------
provisions set forth on this cover page and the further provisions
set forth on the following pages. The Optionee represents that he or
she has read and understood such further provisions, which are
binding on the parties as if set forth on this cover page.
IN WITNESS WHEREOF, the parties have executed this Non-Qualified
Stock Option Agreement in duplicate as of the Grant Date.
ANGELICA CORPORATION
By:---------------------------- ----------------------------
Chairman and CEO Optionee
<PAGE> 2
Section 3. Grant of Option. In conformity with the Angelica
--------- ---------------
Corporation Stock Option Plan (as amended on or before the Grant
Date) (the "Plan"), and pursuant to the authorization of the
Compensation and Organization Committee (the "Committee") charged
with the administration of the Plan, the Company hereby irrevocably
grants to the Optionee the right and option (the "Option"), which is
a "Non-Qualified Stock Option" as defined in the Plan and not an
"incentive stock option" under Section 422 of the Internal Revenue
Code (as amended), to purchase all or any part of that number of
shares of the Company's common stock par value $1 per share (which
may be either treasury shares or authorized but unissued shares) set
forth in Section 1 above, upon the terms and conditions set forth
herein. This Agreement is entered into as of the "Grant Date"
specified in Section 1, the date the Committee has granted the Option
to the Optionee.
Section 4. Grant of SARs. In conformity with the Plan, and
--------- -------------
pursuant to the authorization of the Committee, the Company hereby
irrevocably grants to the Optionee the stock appreciation rights
("SARs"), if any, as set forth in the table in Section 1. Such SARs,
if any, shall have the Cash Features (described in Section 7 below),
if any, as set forth in the table in Section 1. Any grant of an SAR,
with or without a Cash Feature, shall be subject to the terms and
conditions of this Agreement. Any failure in the table in Section 1
to specify the number of SARs granted, or the number of SARs having
a Cash Feature, shall be deemed the equivalent of specifying "NONE"
in such table.
SARs and/or Cash Features may be added pursuant to the Plan
after the Grant Date, with the Optionee's consent, by executing the
SAR/Cash Feature Amendment attached to this Agreement.
Section 5. Purchase Price of Option and Base Price of SARs.
--------- -----------------------------------------------
The purchase price per share of the common stock covered by the
Option, and the Base Price of any SARs granted in connection with the
Option, shall be the "Option Price/Base Price" specified in Section
1 above.
Section 6. Term and Exercise of Option and SARS. The term of
--------- ------------------------------------
the Option shall be for a period which begins on the Grant Date and
ends on the "Expiration Date" specified in Section 1 above, subject
to complete extinguishment as provided in Section 18 and to earlier
termination as provided in Sections 7 and 8; notwithstanding the
Expiration Date so specified, in no event shall the Option be
exercisable after the expiration of ten years from the Grant Date.
The term of all SARs shall be concurrent with the term of the Option,
except that SARs added after the Grant Date of the Option shall have
their own later grant date. If the Option expires or terminates
hereunder for any reason, the SARs likewise shall expire or terminate
automatically.
-2-
<PAGE> 3
During the term of the Option, subject to Sections 17 and 18,
the Optionee or Post Death Representative (as applicable) shall have
the right to exercise the Option as follows: all or any part of the
shares comprising each "Lot" of shares specified in the table in
Section 1 may be purchased at the Option Price at any time on or
after the "Date of First Exercisability" specified in such table for
that Lot. SARs may be exercised only at such time or times and to
the extent, but only to the extent, that the Option may be exercised
(whether pursuant to Section 1, Section 17, or any other provision
herein), and in any case only in conformity with the provisions of
Section 7 below.
Subject to the provisions of Section 8 and 9 below, the Optionee
or Post Death Representative (as applicable) may exercise the Option
or SARs (if any) only if Optionee has been an employee or director of
the Company or of a parent or any subsidiary thereof at all times
beginning with the Grant Date of the Option and ending on the day
three months before the date of such exercise, or, if the Optionee is
disabled (within the meaning of Section 22(e)(3) of the Internal
Revenue Code, as amended [the "Code"]), during the period ending on
the day one year before the date of such exercise. The Option shall
not, however, be affected by any change of duties or position of
Optionee so long as Optionee continues to be an employee or director
of the Company or of a parent or subsidiary thereof.
Section 7. SARs and Cash Features.
--------- ----------------------
(a) Definitions of Certain Terms.
----------------------------
"Cash Percentage" means the percentage from zero to 100%
determined by the Committee from time to time pursuant to the
Plan.
"Fair Market Value" means the mean between the highest and
lowest selling prices of the Company's common stock on the New
York Stock Exchange - Composite Tape on the appropriate
valuation date.
"Reporting Person" means an Optionee who is required to
file statements relating to his or her beneficial ownership of
the Company's common stock with the Securities and Exchange
Commission pursuant to Section 16(a) of the Securities Exchange
Act of 1934, as amended from time to time.
"Rule 16b-3" means Rule 16b-3 promulgated and amended from
time to time by the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
"Spread" means (1) the difference obtained by subtracting
the Base Price of an SAR (see Section 4) from the Fair Market
Value of a share of the Company's common stock on the exercise
-3-
<PAGE> 4
date of the SARs, multiplied by (2) the number of SARs being
exercised.
"Window Period" means the period as defined from time to
time in paragraphs (e)(3)(iii) and (e)(1)(ii) of Rule 16b-3, or
the corresponding paragraphs of any successor to Rule 16b-3.
(b) Exercise of SARs Generally.
--------------------------
(i) During the term of the SARs, the Optionee or Post
Death Representative, as applicable, may elect to exercise all
or part of his or her SARs which are then presently exercisable
in lieu of all or a corresponding part of the Option.
(ii) If the Option is exercised in whole or part, all or
a corresponding number of SARs shall terminate automatically.
If SARs are exercised, a corresponding number of shares covered
by the Option shall terminate automatically.
(iii) Any attempted exercise of an SAR by an Optionee in
contravention of this Section 7, Section 8 of the Plan, the
Committee's rules authorized under the Plan, or (in the case of
a Reporting Person) Rule 16b-3, shall be null and void.
(iv) If the Optionee is or becomes a Reporting Person,
this Section 7 and the other provisions of this Agreement
relating to SARs shall be interpreted and applied so as to
conform with the requirements and limitations of Rule 16b-3, as
amended from time to time. Any amendment to or new
interpretation of Rule 16b-3 which creates or makes more
restrictive one or more limitations shall automatically, upon
becoming effective, apply to exercises of SARs by the Optionee,
if a Reporting Person, whether or not this Section 7 or such
other provisions are formally amended and conformed to Rule 16b-
3 at that time. Any amendment to or new interpretation of Rule
16b-3 which eliminates or relaxes any such limitations shall
apply to such exercises only after this Section 7 or such other
provisions are formally amended, provided that any such
amendment hereof may be applied retroactively to the date of any
such amendment to Rule 16b-3. As used in this paragraph, the
term "interpretation" refers to an official interpretation of
the Securities and Exchange Commission or its staff or any court
of competent jurisdiction.
(c) Exercise of SARs Having No Cash Feature. The number
---------------------------------------
of shares of the Company's common stock deliverable upon the
optionee's exercise of SARs having no Cash Feature is determined
by dividing
(i) the Spread on the SARs being exercised by
-4-
<PAGE> 5
(ii) the Fair Market Value of a share of the
Company's common stock on the exercise date.
If the number of shares so determined includes a fraction of
one-half or more, the number shall be raised to the next highest
whole number, but if the fraction is less than one-half, the
fraction shall be disregarded.
(d) Exercise of SARs Having a Cash Feature.
--------------------------------------
(i) Except as provided in paragraph (ii) below, if SARs
having a Cash Feature ("Cash Feature SARs") are exercised, the
Optionee shall be paid in cash for that number of Cash Feature
SARs equal to the Cash Percentage in effect on the exercise date
multiplied by the number of Cash Feature SARs being exercised.
Any remaining Cash Feature SARs being exercised on such exercise
date shall be paid in stock.
(ii) If Cash Feature SARs are exercised outside of a
Window Period and the Optionee is a Reporting Person on the
exercise date, such SARs shall be paid solely in stock.
(iii) If Cash Feature SARs are paid in cash as provided
above, the Optionee shall receive cash equal to the Spread on
such SARS.
(iv) If Cash Feature SARs are paid in stock as provided
above, the Optionee shall receive the number of shares
determined by applying paragraph (c) of this Section 7 to such
SARs.
(v) Notwithstanding any other provision of this Agreement,
Cash Feature SARs and the Option (if a Cash Feature is granted)
shall not be exercised during the first six months of their
respective terms, except that this limitation shall not apply in
the event death or disability of the Optionee occurs prior to
the expiration of the six-month period.
(vi) If the Optionee is a Reporting Person and his or her
SARs have a Cash Feature, and the Option is exercised during a
Window Period, then the Cash Percentage then in effect shall be
deemed to be zero. Nothing in this paragraph shall prohibit any
SAR from being exercised during a Window Period.
(vii) Optionee acknowledges and agrees that the Committee
may change the Cash Percentage from time to time in its sole
discretion, and that Optionee shall have no vested or
enforceable interest in any Cash Feature or any rules or
determinations of the Committee relating thereto.
Section 8. Termination of Employment or Directorship. If
--------- -----------------------------------------
Optionee's employment is terminated, the Option and any SARs (and any
-5-
<PAGE> 6
other options or stock appreciation rights held by Optionee under the
Plan), to the extent not previously exercised, shall terminate
forthwith, provided however that the Committee may, in its
discretion, extend the date of expiration to a date which shall not
in any case be later than three (3) months after the date of the
Optionee's Termination of Employment or the expiration date specified
in the Optionee's Option Agreement, whichever is earlier, provided
however, that if the Termination of Employment is due to a disability
(as defined in Code Section 23(e)(3)) of the Optionee, then all
Options granted to the Optionee under the Plan shall expire the
earlier of (i) the expiration date specified in the Optionee's
Option Agreement or (ii) the date which is one (1) year after the
date of such Termination of Employment, and provided further that if
the Termination of Employment is due to Normal or Early Retirement,
then all options granted to the Optionee under the Plan shall expire
the earlier of (i) the expiration date specified in the Optionee's
Option Agreement or (ii) two (2) years after the date of such
Termination of Employment, in the case of Non-Qualified Stock
Options.
Section 9. Death of Optionee. If there is a termination of
--------- -----------------
Employment of an Optionee due to the death of the Optionee, or if an
Optionee's death occurs within three (3) months after the date of the
Optionee's Termination of Employment and prior to the expiration of
an Option, then such Option shall expire on the earlier of (i) the
expiration date specified in the Optionee's Option Agreement or (ii)
the date immediately preceding the date which is eighteen (18) months
after the date of the Optionee's death, and the Option and any SARs
may be exercised by the executor or administrator of Optionee's
estate or by the person or persons to whom Optionee's rights under
this Agreement shall pass by his or her will or the laws of descent
and distribution, but only if and to the extent that he or she was
entitled to exercise the Option and any SARs at the date of death and
in any case not later than the Expiration Date of the Option.
Section 10. Adjustment Provisions. In the event any stock
---------- ---------------------
dividend is declared upon the common stock of the Company or in the
event the outstanding shares of common stock of the Company shall be
changed into or exchanged for a different number, class or kind of
shares of stock or other securities of the Company or of another
corporation, whether by reason of a split or combination of shares,
recapitalization, reclassification, reorganization, merger,
consolidation, or otherwise, an appropriate adjustment shall be made
changing, with respect to any portion of the Option and any
corresponding SARS remaining unexercised, the number, class or kind
of shares of common stock or other securities deliverable upon the
exercise of the Option and SARs without change in the total price
applicable to the unexercised portion of such Option, but with a
corresponding adjustment in the Option Price for each share of common
stock or other securities covered by the unexercised portion of such
Option and in the Base Price of such corresponding SARs. In the
event the company is merged, consolidated or reorganized with another
-6-
<PAGE> 7
corporation, appropriate provision shall be made for the continuance
of the Option and SARs granted hereunder and to prevent their
dilution or enlargement compared to the total shares issuable therein
in respect of the common stock of the Company. Any such adjustment
shall be determined by the Committee, whose determination shall be
conclusive and binding on all concerned.
Section 11. Method of Exercising Option and SARs.
---------- ------------------------------------
(a) The Option, as to any Lot of shares described in
Section 1 above, may be exercised (in whole or in part) at any
time permitted pursuant to Section 6 by delivering to the
Secretary of the Company on the exercise date:
(i) a written notice of exercise designating the
number of shares to be purchased, signed by Optionee or the
person acting under Section 9; and
(ii) either (A) cash in the full amount of the
purchase price of the shares with respect to which the
Option is exercised, or (B) certificates, duly endorsed for
transfer or accompanied by a stock power, representing
shares of common stock of the Company, owned by the
Optionee and registered in his or her name, having a Fair
Market Value (defined in Section 7) at the time of such
exercise and delivery equal to the full amount of the
purchase price of the shares with respect to which the
Option is exercised, or (C) a combination of (A) and (B).
(iii) "Cashless exercise" - immediate sale of the
option shares through a broker who will pay the Company the
Aggregate Option Price upon receipt of the exercise notice,
in accordance with Item 6 of the Exercise Form for Non-
Qualified Stock Options.
(b) All or any number of SARs specified in Section 1 as
having been granted in connection with any Lot may be exercised
at any time permitted pursuant to Section 6 by delivering to the
Secretary of the Company on the exercise date a written notice
of exercise designating the number of SARs being exercised,
signed by the Optionee or the person acting under Section 9.
(c) The date of delivery and the date of exercise shall be
the date the written notice actually is received by the
Secretary, regardless of the means of delivery.
Section 12. Withholding Taxes and Election. When the Option or
---------- ------------------------------
any SAR is exercised, the Optionee shall pay to the Company promptly
after the Valuation Date (defined below), in cash, the amount of any
Withholding Taxes (defined below) which the Company is required to
withhold, unless, subject to the conditions set forth below, the
Optionee files with the company a Withholding Election (defined
-7-
<PAGE> 8
below). Subject to the Committee's right of disapproval provided
below, if the Optionee files a Withholding Election, then in
connection with the exercise of the Option or any SAR to which the
Election relates the Company shall withhold from the Optionee shares
of the Company's common stock having a Fair Market Value on the
Valuation Date equal to the amount of Withholding Taxes due, and
shall pay to the appropriate taxing authorities cash equal to such
Withholding Taxes; provided, however, that in the case of an Optionee
who is a Reporting Person on the exercise date and who exercises an
out-of-the-money Option not necessary to comply with the sequential
exercise provisions of the Code as in effect at the time of grant and
who does not make a valid unrevoked election pursuant to Section
83(b) of the Code relating to such exercise, the Company shall
deliver shares pursuant to such exercise subject to the Optionee's
unconditional obligation to deliver back to the Company within three
business days after the Valuation Date an amount of such shares
having a Fair Market Value on the Valuation Date equal to the amount
of Withholding Taxes due. An Optionee who is not a Reporting Person
may file a Withholding Election at any time on or before the
Valuation Date. Any filing of a Withholding Election by a Reporting
Person shall be subject to each of the following conditions:
(a) The Committee may consent to or disapprove the
Election in its sole discretion at any time after the Election
is filed.
(b) The Election is null and void unless filed:
(1) after the first six months from the date of grant
of the Option or SAR (except that this limitation shall not
apply in the event of the death or disability of the
Optionee), and
(2) either within a Window Period to be effective as
to an exercise or surrender during such Window Period, or
at least six months before the Valuation Date as to which
it shall be effective, and
(3) on or before the Valuation Date.
If fractional shares are involved in connection with the
withholding or delivery back of shares, such fractional shares
shall be settled in cash as the Committee by rule or practice
may require. As used in this Section 12:
"Withholding Election" means a written irrevocable election
by the Optionee providing for the withholding or delivery back
of shares of stock pursuant to this Section 12 in consideration
of the Company's payment of Withholding Taxes. A form of
Withholding Election is attached to this Agreement.
-8-
<PAGE> 9
"Withholding Taxes" means the total amount of Federal and
state income taxes which the Company is required to withhold on
account of the exercise by an Optionee of a Non-Qualified Stock
Option or SAR.
"Valuation Date" means the date as of which the stock is
valued for the purposes of determining the Withholding Taxes,
which is either the exercise date of the relevant Option or SAR
or, in the case of a Reporting Person exercising an out-of-the
money Option not necessary to comply with the sequential
exercise provisions of the Code as in effect at the time of
grant and failing to make an election pursuant to Section 83 of
the Code, the day before the date which is six months after the
exercise date.
Section 13. General Provisions. The Company shall not be
---------- ------------------
required to issue or deliver any certificates for shares of common
stock pursuant to any exercise of the Option or any SARs prior to
(a) if requested by the Company, the filing with the
Company by the Optionee or the Optionee's Post-Death
Representative of a representation in writing that at the time
of such exercise it is his or her then present intention to
acquire the shares of Stock being purchased for investment and
not for resale, and/or the completion of any registration or
other qualification of such shares of Stock under any state or
Federal laws or rulings or regulations of any government
regulatory body, which the Company shall determine to be
necessary or advisable, and
(b) the listing, or approval for listing upon notice of
issuance, of such shares on the New York Stock Exchange or such
other securities exchange as may at the time be the principal
market for the common stock of the Company, and
(c) the obtaining of any other consent, approval or permit
from any state or Federal governmental agency which the
Committee shall, in its absolute discretion upon the advice of
counsel, determine to be necessary or advisable.
It is understood that any such investment representation made
pursuant to subsection (a) of this Section 13 shall become
inoperative upon the effective date of any registration and/or
qualification made pursuant to said subsection (a).
Section 14. Limitation of Rights in Stock Covered by Option or
---------- --------------------------------------------------
SARs. Neither Optionee, nor a Permissible Transferee nor a Post-
- ----
Death Representative, as the case may be, shall have any of the
rights of a shareholder with respect to shares covered by the Option
or SARs (if any) until shares are issued to him, her or them upon
exercise of the Option or SARs.
-9-
<PAGE> 10
Section 15. Non-Transferability. The Option shall not be
---------- -------------------
transferable by Optionee otherwise than by will or by the laws of
descent and distribution, or pursuant to a qualified domestic
relations order, or to a Permissible Transferee, and may be
exercised, during his or her lifetime, only by Optionee or by a
Permissible Transferee. Any SARs granted pursuant to this Agreement
shall be transferable only with the Options. No SAR may be detached
from the Option. In the event of Optionee's death, a Permissible
Transferee or the Post-Death Representative, as applicable, may
exercise this Option.
Section 16. Interpretation. It is intended that the Option in
---------- --------------
all respects shall be subject to and governed by the provisions of
the Plan and that it shall fail to meet the requirements of the
"incentive stock option" provisions of the Code presently embodied in
Section 422 thereof. This Agreement in all respects shall be so
interpreted and construed as to be consistent with this intention.
Section 17. Accelerated Exercise of Options. Notwithstanding
---------- -------------------------------
the provisions of Sections 1 and 6: pursuant to Section 7 of the
Plan, the Committee may accelerate the date or dates of
exercisability of the Option; in addition, if any of the events
described in Section 17 of the Plan (relating to certain defined
"Non-Approved Takeovers" of the Company) shall occur, the date or
dates of exercisability of the Option may be accelerated in
accordance with Section 17 of the Plan.
Section 18. Grant May be Conditioned Upon Shareholder Action.
---------- ------------------------------------------------
Optionee acknowledges that if "YES" is marked in Section 1, then
certain amendments to the Plan have been adopted by the Board on or
before the Grant Date which, directly or indirectly, are material to
this Agreement and the Option, and which are subject to shareholder
approval which as of the Grant Date has not been obtained.
Accordingly, if "YES" is marked in Section 1, the Option, any
SAR, and all of the Optionee's rights hereunder shall be conditioned
upon the ratification and approval of such amendments to the Plan by
the Company's shareholders on or before the Action Date indicated in
Section 1, which is the date by which shareholder action must be
taken; if such ratification and approval is not obtained on or before
the Action Date, the Option and this Agreement shall be void. In
addition, notwithstanding the provisions of Sections 1, 6, and 17
relating to the time of exercisability, if "YES" is marked in Section
1 the Option may not be exercised before such ratification and
approval is obtained.
For the purposes of this Section and Section 1, a failure to
mark "YES" and specify an Action Date is equivalent to marking "NO".
If "YES" is marked but no Action Date is specified, the Action Date
shall be presumed to be one year from the Grant Date unless the
parties later agree otherwise.
-10-
<PAGE> 1
STOCK OPTION AGREEMENT
UNDER THE
ANGELICA CORPORATION 1994 PERFORMANCE PLAN
----------------------------
Angelica Corporation, a Missouri corporation (the "Company") and
the person designated in Section 1 below (the "Optionee"), hereby
agree as follows:
SECTION 1. BASIC TERMS.
<TABLE>
<S> <C>
Name of Optionee: -------------------------------
Social Security Number of Optionee: -------------------------------
Number of Shares Subject to Option: -------------------------------
Option Price/Base Price Per Share: $------------------------------
Grant Date of Option: -------------------------------
Expiration Date of Option: -------------------------------
</TABLE>
Table Regarding Exercisability:
<TABLE>
<CAPTION>
LOT NUMBER DATE OF FIRST ISO
NO. OF SHARES EXERCISABILITY (YES OR NO)
--- --------- -------------- -----------
<S> <C> <C> <C>
1 -------- ---------------- ----------
2 -------- ---------------- ----------
3 -------- ---------------- ----------
4 -------- ---------------- ----------
5 -------- ---------------- ----------
</TABLE>
SECTION 2. ENTIRE AGREEMENT. This Agreement consists of the
provisions set forth on this cover page and the further provisions
set forth on the following pages. The Optionee represents that he or
she has read and understood such further provisions, which are
binding on the parties as if set forth on this cover page.
IN WITNESS WHEREOF, the parties have executed this Stock Option
Agreement in duplicate as of the Grant Date.
ANGELICA CORPORATION
By---------------------------- -------------------------------
Chairman and CEO Optionee
<PAGE> 2
ANGELICA CORPORATION
1994 PERFORMANCE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (hereinafter "Agreement"), along
with its cover page, represents the agreement regarding the grant of
a stock option by and between Angelica Corporation (hereinafter
"Company") and Optionee pursuant to the Angelica Corporation 1994
Performance Plan (hereinafter "Plan").
1. GRANT OF OPTION. Company hereby grants to Optionee the right,
privilege and option to purchase the number of shares of Common
Stock of Company at a price per share, both as reflected in the
cover page, in the manner and subject to the conditions provided
herein. This option is intended to be an Incentive Stock Option
("ISO") only with respect to those shares, if any, which are
indicated as such on the cover page.
2. TIME OF EXERCISE OF OPTION. This Option shall become
exercisable as provided in the cover page, provided however that
(a) if Optionee's status as an employee of the Company ends
before the Expiration Date specified in the cover page by reason
of death or disability, then the Option will be exercisable in
full by Optionee or Optionee's Post-Death Representative as
provided in the Plan.
3. INCORPORATION OF STOCK PLAN. This Agreement is entered into
pursuant to the Plan, which Plan is by this reference
incorporated herein and made a part hereof. The material
provisions of the Plan applicable to this Option are as follows:
a. METHOD OF EXERCISE OF OPTION. This Option shall be
exercisable in whole or in part to the extent then
exercisable, by written notice delivered to the Office of
General Counsel of Company stating the number of shares
with respect to which the Option is being exercised,
accompanied by payment either (i) in cash, (ii) by tender
to Company of shares of Stock, owned by the Optionee and
registered in the Optionee's name, having a fair market
value equal to the cash exercise price of the Option being
exercised, (iii) by directing the Company to withhold from
the number of shares of Common Stock otherwise issuable
upon exercise of the option that number of shares of Common
Stock having an aggregate fair market value on the date of
exercise equal to the exercise price for all of the shares
of Common Stock subject to such exercise, or (iv) by any
combination of (i), (ii) and (iii) hereof.
b. TERMINATION OF OPTION. This Option shall terminate in all
events on the earliest of
(i) the Expiration Date specified in the cover page
hereof, or
<PAGE> 3
(ii) the later of three months after the date on which
Optionee ceases to be an employee of the Company for
any reason other than death or disability, or, if
Optionee dies within the three month period after such
termination of employment, then three months after his
death, or
(iii) twelve months after the date on which Optionee ceases
to be an employee of the Company because of death, or
(iv) the later of twelve months after the date on which
Optionee ceases to be an employee of the Company
because of disability or, if Optionee dies within the
twelve month period after his termination of
employment, then three months after his death.
c. NON-TRANSFERABILITY OF OPTION. This Option is non-
transferable by Optionee except by will or the laws of
descent and distribution or, with respect to an option
which is not an ISO, to a Permissible Transferee, and
shall be exercisable during Optionee's lifetime only by
Optionee or by a Permissible Transferee. In the event of
Optionee's death, a Permissible Transferee or the Post-
Death Representative, as applicable, may exercise this
Option.
d. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC. In the
event of the payment of a stock dividend, a split-up or
consolidation of shares, or any like capital adjustment
of Company then to the extent the Option hereunder
remains outstanding and unexercised, there shall be a
corresponding adjustment as to the number of shares
covered under this Option, and in the purchase price per
share, to the end that Optionee shall retain the
Optionee's proportionate interest without change in the
total purchase price under this Option.
4. OPTION CONDITIONED ON ACCEPTANCE. This Agreement shall be void
and of no effect unless a copy hereof is executed by Optionee
and returned to the Office of General Counsel of Company not
later than 30 days after the day this Agreement is mailed or
delivered to Optionee, provided, however, that if Optionee dies
within such 30-day period this Agreement shall be effective
notwithstanding the fact that it is not executed by Optionee.
<PAGE> 1
SIXTH AMENDMENT TO THE
ANGELICA CORPORATION
PENSION PLAN
(AS RESTATED APRIL 1, 1989)
WHEREAS, Angelica Corporation (herein referred to as the
"Company") established effective April 1, 1980, the Angelica
Corporation Pension Plan (hereinafter referred to as the "Plan"); and
WHEREAS, the Company desires to amend said Plan effective as of
the dates specified below;
NOW, THEREFORE, the Company does hereby amend the Plan effective
as of the dates specified below, in the following respects:
I.
Effective as of January 1, 1996, Section 1.2 of the Plan is
hereby deleted in its entirety and the following is substituted in
lieu thereof:
"Section 1.2. `Actuarial Equivalent' means an amount or
a benefit, as the case may be, of equivalent value. The
determination of Actuarial Equivalent shall be based upon
the following actuarial assumptions: The 1984 Unisex
Pension Table, set back two years, except that in the case
of a Contingent Annuitant option, set back one year for the
Participant and four years for the contingent annuitant and
interest at the rate of 7% per annum compounded annually.
For purposes of determining lump sum values under Section
5.3 and Sections 6.1(b) and (c), Actuarial Equivalent shall
be determined as of the date of distribution and (i) by
using an interest rate equal to the annual rate of interest
on a 30-year Treasury securities as specified by the
Commissioner of the Internal Revenue Service for the second
full calendar month preceding the first day of the
stability period, and (ii) by using the 1983 Group Annuity
Mortality Table (blended to represent 50% male/50% female
mortality. For purposes of the preceding sentence, the
term `stability period' means the Plan Year."
II.
Effective as of January 1, 1994, the last paragraph of Section
1.10 of the Plan is hereby deleted in its entirety and the following
is substituted in lieu thereof:
"In addition to other applicable limitations which may
be set forth in the Plan and notwithstanding any other
contrary provision of the Plan, Compensation taken into
account under the Plan shall not exceed
<PAGE> 2
$150,000 or such amount as provided in Code section 401(a)(17)
for the purpose of calculating a Participant's Accrued Benefit
for any Plan Year commencing after December 31, 1993."
III.
Effective as of January 1, 1996, Section 13.1 of the Plan is
hereby deleted in its entirety and the following is substituted in
lieu thereof:
"Section 13.1. Amendment or Termination. The Company
------------------------
reserves the right at any time to modify or amend or
terminate the Plan in whole or in part, provided, however,
that the Company shall have no power to modify or amend the
Plan in such manner as would cause or permit any funds held
by the Trustee hereunder to be used for, or diverted to,
purposes other than for the exclusive benefit of
Participants or their Beneficiaries, or as would cause or
permit any portion of such funds or assets to become the
property of the Company until all liabilities pursuant to
the Plan are satisfied. The authority to make any such
modifications or to terminate the Plan rests with the
Board. Any such amendment, modification or termination of
the Plan shall be made by resolution adopted by the Board.
No such modification or amendment shall have the effect of
retroactively depriving Participants or Beneficiaries of
benefits already accrued under the Plan."
IV.
Effective as of January 1, 1994, Article XIV of the Plan is
hereby deleted in its entirety and the following is substituted in
lieu thereof:
"ARTICLE XIV
-----------
Provisions to Prevent Discrimination
------------------------------------
14.1 The following limitations will apply to
distributions to Highly Compensated Employees (as
defined in Code section 414(q)) from the Plan for
Plan Years beginning on and after January 1, 1994:
(i) In the event of termination of the Plan, the
benefit of any Highly Compensated Employee, including
both active and former Employees, is limited to a
benefit that is nondiscriminatory under Code section
401(a)(4).
(ii) The benefits payable to an active or former
Highly Compensated Employee are limited to an amount
equal to the payments that would be made on behalf of
each such Employee under a single life annuity which is
the actuarial equivalent of the
- 2 -
<PAGE> 3
sum of the Employee's Accrued Benefit and the Employee's other
benefits under the Plan.
(iii) The restrictions of subparagraph (ii) will not
apply if--
(A) after payment to the Highly Compensated
Employee of all benefits (as defined in the
regulations), the value of Plan assets equals or
exceeds 110% of the value of current liabilities of
the Plan, as defined in Code section 412(l)(7), or
(B) the value of the benefits for the Highly
Compensated Employee is less than 1% of the value of
current liabilities of the Plan.
14.2 The restrictions imposed by the provisions of this
Article XIV are included solely to meet the
requirements of the Code. In the event that it
should be determined by statute, a court decision,
ruling by the Internal Revenue Service, or
otherwise, that the provisions of this Article XIV
are no longer necessary to qualify the Plan under
the Code, this Article XIV shall become inoperative
without the necessity of further amendment.
14.3 For the purposes of this Article XIV, the
determination of who is a `Highly Compensated
Employee' shall be made in accordance with Code
section 414(q) and the regulations thereunder."
IN WITNESS WHEREOF, the Company has caused this Sixth Amendment
to be executed this 27th day of February , 1996 .
---- ------------------------- --
ANGELICA CORPORATION
By /s/ L. J. Young
----------------------------
Its Chairman of the Board
----------------------------
[SEAL]
ATTEST:
/s/ Jill Witter
- ---------------------------------
Secretary
- 3 -
<PAGE> 1
AMENDMENT NO. 1
TO THE RESTATED
ANGELICA CORPORATION
STOCK BONUS AND INCENTIVE PLAN
The Restated Angelica Corporation Stock Bonus and Incentive Plan
(the "Plan") is amended, effective April 1, 1996, in the following
particulars:
Section 9.7 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT is
deleted in its entirety and the following is substituted in lieu
thereof:
"Section 9.7 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT.
If the Participant's employment with all members of the
Group is terminated by reason of the Participant's
Retirement at age 62 or older, the Period of Restriction
shall expire with respect to both the Matching Shares and
Elected Shares and, except as otherwise provided pursuant
to Section 9.3, the shares of Restricted Stock shall
thereafter be free of restrictions and freely
transferable."
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed on this 28th day of March, 1996.
ANGELICA CORPORATION
By /s/ L. J. Young
----------------------------------
Its Chairman of the Board
ATTEST:
/s/ Jill Witter
- -----------------------------
<PAGE> 1
Financial Review
- -------------------------------------------------------------------------------
Financial Condition
At the end of fiscal 1996, the financial condition of the Company was
excellent. Working capital of $181.0 million and a current ratio of 5.0 to 1
were both very strong and exceeded the $150.7 million of working capital and
a current ratio of 3.2 to 1 at the end of the prior year. Examining the
components of working capital, current assets increased $6.7 million in the
year, with the largest change being an increase of $8.8 million in cash and
short-term investments. Receivables were down slightly in the year and
receivable days outstanding decreased to 63 versus 64 at the end of last
year. Inventories were slightly lower, largely due to the restructuring
charge discussed below. Current liabilities decreased $23.6 million as a
result of the repayment of all short-term debt during the year.
Effective May 1, 1995, the Company borrowed $30.0 million from four
insurance companies under unsecured notes maturing in 2006 and bearing
interest at the rate of 8.225 percent per annum. Proceeds from the long-term
financing were used to repay all outstanding short-term debt and to provide
some excess funds for various corporate purposes, including potential future
acquisitions. At year end, the ratio of long-term debt to total long-term
debt and equity was 34.6 percent. The increase from 26.2 percent last year
was due to the higher amount of long-term debt plus a reduction of
shareholders' equity due to the restructuring charge.
On January 18, 1996, the Board of Directors approved a restructuring plan
to be implemented over the succeeding twelve months consisting of plant
closings and consolidations, product line reductions and the related
writedown of inventories, and personnel reductions. As a result, the Company
recorded a pretax charge of $14.1 million in the fourth quarter of fiscal
1996. Of the total charge, $7.5 million related to the Textile Services
segment and $6.6 million applied to the Manufacturing and Marketing segment.
The charge was composed of $2.5 million in cash outlays for severance pay
and other plant closure costs, with the balance of $11.6 million being
utilized to reduce asset carrying values.
Cash flow from operating activities in fiscal 1996 was $27.1 million,
approximately the same as the $27.6 million generated in the prior year.
Cash used in investing activities was down $8.2 million due to lower outlays
for both capital expenditures ($8.8 million versus $11.4 million in the
prior year) and acquisition expenditures ($10.6 million versus $16.2
million). Cash flow provided by financing activities was a net $1.2 million
this year, with $30.0 million in new long-term financing being offset by
$23.7 million in short-term and long-term debt repayments and $8.7 million
of dividends paid.
No material change in the Company's future aggregate cash requirements is
foreseen at the present time. In addition, it is Management's opinion that
the Company's financial condition is such that internal and external
resources are sufficient to satisfy the Company's future requirements for
capital expenditures, dividends and working capital.
Analysis of Fiscal 1996 Operations Compared to 1995
In fiscal 1996, combined sales and textile service revenues of $487.0
million were $14.2 million or 3.0 percent higher than last year. Excluding
acquisitions, there would have been a decline of 1.6 percent. In the Textile
Services segment, revenues were up $10.4 million or 4.3 percent, with all of
this increase coming from acquisitions. Sales of the Manufacturing and
Marketing segment, before deduction for intersegment sales, were $2.3
million or 1.3 percent higher than the prior year. Without the effect of
acquisitions, sales would have been 3.7 percent lower than the prior year.
Increased sales volume in the United States and in the United Kingdom offset
a small sales decline in Canada. Life Retail Stores sales rose $2.9 million
or 4.3 percent due to acquisitions and a 2.9 percent same-store sales
increase.
Angelica Corporation and Subsidiaries 17
<PAGE> 2
- -------------------------------------------------------------------------------
The gross profit percent to combined sales and textile service revenues
was 26.2 percent in fiscal 1996, down slightly from 26.8 percent in the prior
year. In the Textile Services segment, margins were lower than the prior
year due to continued pressure on margins in the health care market, plus
the loss of a large non-health care customer at the Las Vegas plant and the
inability to lower costs there sufficiently to compensate for the lost
revenue. Margins of the Manufacturing and Marketing segment were up slightly
versus last year, primarily the result of a change in sales mix.
Selling, general and administrative expenses in fiscal 1996 were $4.9
million or 5.2 percent higher than the prior year and increased slightly as
a percentage of combined sales and textile service revenues to 20.4 percent
from 20.0 percent the prior year. Interest expense of $9.1 million in fiscal
1996 was $1.2 million higher than the prior year due to the long-term
financing completed in fiscal 1996. The effective tax rate was 38.5 percent
in fiscal 1996, unchanged from the preceding year.
Analysis of Fiscal 1995 Operations Compared to 1994
Combined sales and textile service revenues were $472.8 million in fiscal
1995, an increase of $45.7 million or 10.7 percent over the prior year. The
increase would have been 2.3 percent excluding acquisitions made in fiscal
1995 and the prior year. For the Textile Services segment, revenues rose by
$29.2 million or 13.6 percent, with most of the increase resulting from
acquisitions. Sales of the Manufacturing and Marketing segment, before
deduction for intersegment sales, were $3.6 million or 2.1 percent greater
than the prior year, again with most of the increase being the result of
acquisitions. Sales of Life Retail Stores in fiscal 1995 rose $12.1 million
or 21.4 percent due to acquisitions and an excellent 8.6 percent same-store
sales increase.
The gross profit percent to combined sales and textile service revenues in
fiscal 1995 was 26.8 percent, down slightly from 27.2 percent in the prior
year. Gross margins in the Textile Services segment were down due to
continuing margin pressures in the health care market. In the Manufacturing
and Marketing segment, gross margins were down largely because of a change
in sales mix to lower margin products principally for the fast food
industry. Margins of Life Retail Stores increased slightly due to lower
discounts.
Selling, general and administrative expenses remained under good control
as they increased 8.5 percent in fiscal 1995 but as a percentage of combined
sales and textile service revenues dropped to 20.0 percent from 20.4 percent
in the prior year. Interest expense increased to $7.9 million versus $7.4
million last year as a result of higher debt levels and higher interest
rates. The effective tax rate in fiscal 1995 was 38.5 percent, slightly
higher than an effective tax rate of 38.3 percent in the preceding year.
18 Angelica Corporation and Subsidiaries
<PAGE> 3
<TABLE>
Consolidated Statements of Income
<CAPTION>
- ------------------------------------------------------------------------------------------------------
For Years Ended January 27, January 28, January 29,
(Dollars in thousands, except per share amounts) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Textile service revenues $254,893 $244,496 $215,248
Net sales 232,121 228,336 211,880
- ------------------------------------------------------------------------------------------------------
487,014 472,832 427,128
- ------------------------------------------------------------------------------------------------------
Cost of textile services 205,486 193,219 167,883
Cost of goods sold 154,054 152,790 143,046
- ------------------------------------------------------------------------------------------------------
359,540 346,009 310,929
- ------------------------------------------------------------------------------------------------------
Gross profit 127,474 126,823 116,199
Selling, general and administrative expenses 99,481 94,585 87,180
Restructuring charge 14,145 -- --
- ------------------------------------------------------------------------------------------------------
Income from operations 13,848 32,238 29,019
Interest expense (9,104) (7,906) (7,444)
Other expense, net (2,889) (3,078) (3,515)
- ------------------------------------------------------------------------------------------------------
Income before income taxes 1,855 21,254 18,060
Provision for income taxes 714 8,183 6,909
- ------------------------------------------------------------------------------------------------------
Net income $ 1,141 $ 13,071 $ 11,151
======================================================================================================
Net income per share $ .13 $ 1.44 $ 1.23
======================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
Angelica Corporation and Subsidiaries 19
<PAGE> 4
<TABLE>
Consolidated Balance Sheets
<CAPTION>
- -----------------------------------------------------------------------------------------
January 27, January 28,
(Dollars in thousands) 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and short-term investments $ 11,029 $ 2,211
Receivables, less reserves of $2,687 and $2,699 67,164 69,071
Inventories 104,057 105,827
Linens in service 40,295 37,609
Prepaid expenses 4,036 5,199
- -----------------------------------------------------------------------------------------
Total Current Assets 226,581 219,917
- -----------------------------------------------------------------------------------------
Property and Equipment:
Land 4,973 5,584
Buildings and leasehold improvements 64,513 67,292
Machinery and equipment 122,672 128,154
Capitalized leased property 1,849 1,849
- -----------------------------------------------------------------------------------------
194,007 202,879
Less--reserve for depreciation 103,213 105,229
- -----------------------------------------------------------------------------------------
90,794 97,650
- -----------------------------------------------------------------------------------------
Other:
Goodwill 8,384 7,261
Other acquired assets 9,714 13,252
Cash surrender value of life insurance 12,595 10,917
Miscellaneous 5,159 4,551
- -----------------------------------------------------------------------------------------
35,852 35,981
- -----------------------------------------------------------------------------------------
Total Assets $353,227 $353,548
=========================================================================================
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ -- $ 21,100
Current maturities of long-term debt 2,681 2,568
Accounts payable 17,238 20,043
Accrued wages and other compensation 7,772 7,920
Other accrued liabilities 17,530 12,269
Income taxes 317 5,283
- -----------------------------------------------------------------------------------------
Total Current Liabilities 45,538 69,183
- -----------------------------------------------------------------------------------------
Long-Term Debt, less current maturities 100,103 69,683
- -----------------------------------------------------------------------------------------
Other:
Deferred compensation and other payments 14,643 14,546
Deferred income taxes 3,413 3,476
- -----------------------------------------------------------------------------------------
18,056 18,022
- -----------------------------------------------------------------------------------------
Shareholders' Equity:
Preferred Stock -- --
Common Stock, $1 par value, authorized 20,000,000
shares, issued: 9,471,538 and 9,470,538 shares 9,472 9,471
Capital surplus 4,196 4,179
Retained earnings 187,328 194,849
Translation adjustment (2,439) (2,290)
Common Stock in treasury, at cost:
330,030 and 351,626 shares (9,027) (9,549)
- -----------------------------------------------------------------------------------------
189,530 196,660
- -----------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $353,227 $353,548
=========================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
20 Angelica Corporation and Subsidiaries
<PAGE> 5
<TABLE>
Consolidated Statements of Shareholders' Equity
<CAPTION>
- ------------------------------------------------------------------------------------------------------
For Years Ended January 27, January 28, January 29,
(Dollars in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred Stock
Balance beginning of year $ -- $ -- $ --
Changes during year -- -- --
- ------------------------------------------------------------------------------------------------------
Balance end of year $ -- $ -- $ --
- ------------------------------------------------------------------------------------------------------
Common Stock ($1 par value)
Balance beginning of year $ 9,471 $ 9,448 $ 9,444
Exercise of stock options 1 23 4
- ------------------------------------------------------------------------------------------------------
Balance end of year $ 9,472 $ 9,471 $ 9,448
- ------------------------------------------------------------------------------------------------------
Capital Surplus
Balance beginning of year $ 4,179 $ 3,672 $ 3,606
Exercise of stock options 30 507 66
Redemption of preferred stock (13) -- --
- ------------------------------------------------------------------------------------------------------
Balance end of year $ 4,196 $ 4,179 $ 3,672
- ------------------------------------------------------------------------------------------------------
Retained Earnings
Balance beginning of year $194,849 $190,301 $187,507
Net income 1,141 13,071 11,151
Cash dividends (8,683) (8,557) (8,443)
Exercise of stock options/stock awards 21 34 86
- ------------------------------------------------------------------------------------------------------
Balance end of year $187,328 $194,849 $190,301
- ------------------------------------------------------------------------------------------------------
Translation Adjustment
Balance beginning of year $ (2,290) $ (1,658) $ (1,212)
Change in cumulative adjustment (149) (632) (446)
- ------------------------------------------------------------------------------------------------------
Balance end of year $ (2,439) $ (2,290) $ (1,658)
- ------------------------------------------------------------------------------------------------------
Common Stock in Treasury, at cost
Balance beginning of year $ (9,549) $ (9,770) $(10,136)
Exercise of stock options/stock awards 541 221 366
Other changes during year (19) -- --
- ------------------------------------------------------------------------------------------------------
Balance end of year $ (9,027) $ (9,549) $ (9,770)
- ------------------------------------------------------------------------------------------------------
Shareholders' Equity, end of year $189,530 $196,660 $191,993
======================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
Angelica Corporation and Subsidiaries 21
<PAGE> 6
<TABLE>
Consolidated Statements of Cash Flows
<CAPTION>
- ------------------------------------------------------------------------------------------------------
For Years Ended January 27, January 28, January 29,
(Dollars in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $ 1,141 $13,071 $11,151
Non-cash items included in net income:
Depreciation 13,797 13,297 12,872
Amortization of acquisition costs 3,997 3,586 3,539
Restructuring charge 14,145 -- --
Change in working capital components,
net of businesses acquired:
Receivables, net 4,232 312 (1,720)
Inventories and linens in service (3,845) (3,192) (2,100)
Prepaid expenses 1,294 (880) (229)
Accounts payable (2,927) 483 8
Compensation and other accruals 2,488 2,713 (835)
Income taxes payable (4,966) (247) 251
Cash surrender value of life insurance (1,678) (1,508) (1,561)
Other, net (619) (37) (317)
- ------------------------------------------------------------------------------------------------------
Net cash flow provided by operating activities 27,059 27,598 21,059
- ------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Expenditures for property and equipment, net (8,760) (11,466) (8,770)
Cost of businesses acquired (10,643) (16,165) (8,628)
- ------------------------------------------------------------------------------------------------------
Net cash flow used in investing activities (19,403) (27,631) (17,398)
- ------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt 30,000 -- --
Proceeds from issuance of short-term debt -- 11,200 9,900
Debt assumed in acquisition 3,131 -- --
Long-term and short-term debt repayments (23,698) (2,572) (5,920)
Dividends paid (8,683) (8,557) (8,443)
Other, net 412 153 76
- ------------------------------------------------------------------------------------------------------
Net cash flow provided by (used in) financing activities 1,162 224 (4,387)
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and short-term investments 8,818 191 (726)
Cash and short-term investments at beginning of year 2,211 2,020 2,746
- ------------------------------------------------------------------------------------------------------
Cash and short-term investments at end of year $11,029 $ 2,211 $ 2,020
======================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
22 Angelica Corporation and Subsidiaries
<PAGE> 7
Notes to Consolidated Financial Statements
- -------------------------------------------------------------------------------
1 Summary of Significant Accounting Policies
Nature of Operations
The Company provides textile rental and laundry services principally to
health care institutions and to a limited extent to hotels, casinos, motels
and restaurants, in or near major metropolitan areas in the United States.
The Company is a manufacturer and marketer of uniforms and business career
apparel for a wide variety of institutions and businesses in the United
States, Canada and the United Kingdom. The Company operates a nationwide
chain of specialty retail stores primarily for nurses and other health care
professionals.
Principles of Consolidation
All subsidiaries are wholly-owned and are included in the consolidated
financial statements. All significant intercompany accounts and transactions
have been eliminated.
Textile service revenues are recognized at the time the service is
provided to the customer. Net sales are recognized at the time the merchandise
is shipped to or picked up by the customer.
Certain amounts in prior years have been reclassified to conform to
current year presentation.
Use of Estimates
These financial statements have been prepared on the accrual basis of
accounting, which required the use of certain estimates by Management in
determining the Company's assets, liabilities, revenues and expenses.
Foreign Currency Translation
The Company accounts for foreign currency translation in accordance with
Statement of Financial Accounting Standards No. 52. The cumulative effect of
this method is reflected as a separate component of shareholders' equity.
Inventories
Inventories are stated at the lower of cost (first-in, first-out basis) or
market. Cost includes material, labor and factory overhead, as applicable.
Inventories were comprised of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 27,612 $ 26,222
Work in process 6,033 6,163
Finished goods 70,412 73,442
- ------------------------------------------------------------------------
$104,057 $105,827
========================================================================
</TABLE>
Linens in Service
Linens in service are stated at depreciated cost, not in excess of market.
Property and Equipment
Property and equipment are stated at cost. Renewals and betterments are
capitalized.
Property and equipment are depreciated over their expected useful lives
(buildings -- 15 to 40 years; machinery and equipment -- three to 10 years).
Depreciation is computed principally on the straight-line method. Leasehold
improvements are amortized using the straight-line method over their useful
lives or lease terms, as appropriate.
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
which utilizes the liability method. Under this method, deferred taxes are
determined based on the estimated future tax effects of differences between
the financial statement and tax bases of assets and liabilities given the
provisions of the enacted tax laws.
Goodwill and Other Acquired Assets
Goodwill, the excess of cost over net assets of businesses acquired, is
being amortized on the straight-line basis over periods not exceeding 40
years. Other acquired assets, including customer contracts and non-
competition agreements, are being amortized on the straight-line basis
generally over periods of three to five years.
Net Income Per Share
Net income per share is computed by dividing the net income applicable to
Common Stock by the weighted average number of Common and Common equivalent
shares outstanding.
Consolidated Statements of Cash Flows
For purposes of the Consolidated Statements of Cash Flows, the Company
considers short-term, highly liquid investments (securities with an original
maturity date of less than three months), as cash equivalents.
Angelica Corporation and Subsidiaries 23
<PAGE> 8
- -------------------------------------------------------------------------------
Cash payments for income taxes were $5,615,000, $9,182,000 and $7,220,000
in 1996, 1995 and 1994, respectively; and in these periods interest payments
were $8,644,000, $7,844,000 and $7,515,000, respectively.
2 Retirement Benefits
The Company has a non-contributory defined benefit pension plan covering
primarily all domestic salaried and hourly administrative non-union
personnel. The benefit formula is based on years of service and compensation
during employment. The funding policy of the pension plan is in accordance
with the requirements of the Employee Retirement Income Security Act of
1974. Pension expense included the following components:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost (benefits earned
during the year) $ 536 $ 615 $ 581
Interest cost on projected
benefit obligation 1,034 981 921
(Increase) decrease in value
of assets (3,089) 235 (1,526)
Net amortization
and deferrals 2,106 (1,010) 854
- -----------------------------------------------------------------------------------------
Net pension expense $ 587 $ 821 $ 830
=========================================================================================
</TABLE>
The funded status of the plan and the net pension liability at January 1,
1996 and January 1, 1995 were as follows:
<TABLE>
<CAPTION>
January 1, January 1,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of
benefit obligation:
Vested benefits $(13,628) $(11,595)
Nonvested benefits (113) (98)
- ------------------------------------------------------------------------
Accumulated benefit obligation (13,741) (11,693)
Effect of projected future
compensation levels (1,716) (1,484)
- ------------------------------------------------------------------------
Projected benefit obligation (15,457) (13,177)
Plan assets at fair value, primarily listed
stocks and Government securities 15,699 12,738
- ------------------------------------------------------------------------
Plan assets more than (less than)
projected benefit obligation 242 (439)
Unrecognized obligation at transition 1,318 1,452
Unrecognized net gains (2,886) (2,475)
Unrecognized prior service cost 250 270
- ------------------------------------------------------------------------
Net pension liability $ (1,076) $ (1,192)
========================================================================
</TABLE>
In determining the projected benefit obligation, the following actuarial
assumptions were used:
<TABLE>
<CAPTION>
1996 1995
- -----------------------------------------------------------------------
<S> <C> <C>
Discount rate 7.0% 8.1%
Compensation increase rate 6.0% 7.0%
Long-term rate of return 8.5% 8.0%
- -----------------------------------------------------------------------
</TABLE>
The Company does not provide retirees with post-retirement benefits other
than pensions.
3 Short-Term and Long-Term Debt
The following table summarizes information with respect to short-term debt
for 1996 and 1995:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Average amount of short-term debt
during the year $4,392 $16,708
Weighted average interest rate:
During the year 5.32% 4.66%
At year end -- 5.64%
- ------------------------------------------------------------------------
</TABLE>
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
10.2% notes to insurance company, due
annually to 2004 $ 41,375 $43,375
9.15% notes to insurance
companies, due 2001 25,000 25,000
8.225% notes to insurance
companies, due 2006 30,000 --
6.84% note to bank, due
quarterly to 2010 3,100 --
76% of prime rate industrial
development revenue bond,
due quarterly to 2000 2,138 2,587
7.375% note, due monthly to 2004 305 327
5% and 6% industrial development
bonds, due 2004 and 2005, respectively 372 444
7.4% to 8.8% life insurance policy loans 337 337
Capital lease obligations 157 181
- --------------------------------------------------------------------------
102,784 72,251
Less--current maturities 2,681 2,568
- --------------------------------------------------------------------------
$100,103 $69,683
==========================================================================
</TABLE>
The most restrictive of the Company's loan agreements require that the
Company maintain a minimum of $160,000,000 in consolidated tangible net
worth, as defined. As of January 27, 1996, the balance was $181,050,000.
24 Angelica Corporation and Subsidiaries
<PAGE> 9
- -------------------------------------------------------------------------------
Aggregate maturities of long-term debt for each of the four years
subsequent to January 25, 1997, are $2,689,000, $2,686,000, $5,224,000 and
$2,415,000, respectively.
Based on borrowing rates currently available for debt instruments with
similar terms and average maturities, the fair market value of the Company's
long-term debt, as of January 27, 1996 and January 28, 1995 was
approximately $119,550,000 and $78,520,000, respectively.
4 Income Taxes
The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 4,045 $ 6,134 $ 6,516
State 155 1,023 1,032
Foreign (322) 200 (230)
Deferred (3,164) 826 (409)
- ---------------------------------------------------------------------------------------
$ 714 $ 8,183 $ 6,909
=======================================================================================
</TABLE>
Reconciliation between the statutory income tax rate and effective tax
rate is summarized below:
<TABLE>
<CAPTION>
1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.0% 35.0% 35.0%
State tax, net of
Federal benefit 3.4 3.5 3.6
Other, net .1 -- (.3)
- ---------------------------------------------------------------------------------------
38.5% 38.5% 38.3%
=======================================================================================
</TABLE>
The tax effect of significant temporary differences representing deferred
tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
January 27, January 28,
(Dollars in thousands) 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Deferred compensation $ 5,178 $ 4,448
Insurance reserves not
yet deductible 4,060 2,549
Customer contracts 3,222 3,252
Other 4,062 3,542
- --------------------------------------------------------------------------
16,522 13,791
- --------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation (9,507) (11,130)
Linen amortization (11,807) (10,267)
Other (622) (972)
- --------------------------------------------------------------------------
(21,936) (22,369)
- --------------------------------------------------------------------------
Net deferred tax liabilities $ (5,414) $ (8,578)
==========================================================================
</TABLE>
Temporary differences related to investments in foreign subsidiaries
essentially permanent in nature and not expected to reverse in the
foreseeable future were approximately $8,565,000. The unrecognized deferred
tax liability related to these temporary differences was $663,000.
5 Preferred Stock
The Company has two classes of authorized Preferred Stock: Class A,
authorized in the amount of 100,000 shares; and Class B, authorized in the
amount of 2,500,000 shares. At January 27, 1996 no shares of Class A or
Class B were outstanding. At January 28, 1995, 128 shares of Class A, Series
1, $1 stated value per share and no shares of Class B were outstanding.
6 Shareholder Protection Rights Plan
The Company has a Shareholder Protection Rights Plan, under which a Right is
attached to each share of the Company's Common Stock. The Rights may only
become exercisable under certain circumstances involving actual or potential
acquisitions of the Company's Common Stock by a person or group of
affiliated or associated persons. Depending upon the circumstances, if the
Rights become exercisable, the holder may be entitled to purchase units of
the Company's Class B Series 1 Junior Participating Preferred Stock, shares
of the Company's Common Stock or shares of common stock of the surviving or
purchasing company. The Rights will remain in existence until September 7,
1998, unless they are earlier exercised or redeemed.
7 Stock Options
The Company has various stock option and stock bonus plans which provide for
the granting to certain employees and directors of incentive stock options,
non-qualified stock options, restricted stock and performance awards.
Options and awards have been granted at the fair market value at the date of
grant, although certain plans allow for options to be granted at an option
price below fair market value. Options are exercisable not less than six months
Angelica Corporation and Subsidiaries 25
<PAGE> 10
- -------------------------------------------------------------------------------
and not more than 10 years after the date of grant. Changes in the status of
options under the various plans are summarized below:
<TABLE>
<CAPTION>
Price Range Optioned Available for
Per Share Shares Option/Grant
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at
January 28, 1995 $22.8125 - $37.50 399,331 524,425
Available for
option/grant under
1994 Non-Employee
Directors Stock
Plan -- -- 225,000
Granted $25.3125 - $25.50 110,537 (110,537)
Exercised $22.8125 - $23.77 (8,287) --
Lapsed/Cancelled $22.8125 - $37.50 (13,456) 9,200
- -----------------------------------------------------------------------------------------
Outstanding at
January 27, 1996 $22.8125 - $37.50 488,125 648,088
=========================================================================================
</TABLE>
8 Commitments and Contingencies
Future minimum payments by year and in the aggregate, under capital leases
and under operating leases with initial or remaining terms of one year or
more, consisted of the following at January 27, 1996:
<TABLE>
<CAPTION>
Capital Operating
(Dollars in thousands) Leases Leases
- ------------------------------------------------------------------------
<S> <C> <C>
1997 $ 49 $ 8,327
1998 49 7,326
1999 36 5,966
2000 26 4,787
2001 20 3,809
Later years 103 13,762
- ------------------------------------------------------------------------
Total minimum lease payments 283 $43,977
- ------------------------------------------------------------------------
Amount representing interest 126
- ------------------------------------------------------------------------
Present value of net minimum lease payments $157
========================================================================
</TABLE>
Rental expense for all operating leases consisted of:
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum rentals $16,415 $14,585 $13,054
Contingent rentals 345 341 256
- ---------------------------------------------------------------------------------------
$16,760 $14,926 $13,310
=======================================================================================
</TABLE>
The Company is a party to various claims and legal proceedings which arose
in the ordinary course of its business. Although the ultimate disposition of
these proceedings is not presently determinable, Management does not believe
that an adverse determination in any or all of such proceedings will have a
material adverse effect upon the financial condition or operating results of
the Company.
9 Restructuring Charge
During the fourth quarter of fiscal 1996, the Company recorded a
restructuring charge of $14,145,000 ($8,700,000 after-tax or $.95 per
share). The restructuring charge relates primarily to the consolidation and
closing of certain Textile Services plants, the reduction of selected
product lines in the Manufacturing and Marketing segment and the sale or
contraction of certain Canadian operations. These costs include (i)
writedowns to the carrying values of plants to be closed, idle facilities
and other assets, (ii) related inventory adjustments and (iii) the accrual
of severance costs associated with the elimination of approximately 450
positions.
The restructuring charge was composed of $2,566,000 in cash expenditures
and $11,579,000 in reduction of asset carrying values. As of January 27, 1996,
$11,710,000 had been charged to the restructuring reserve and the remaining
reserve of $2,435,000 is expected to be essentially utilized during fiscal
1997.
26 Angelica Corporation and Subsidiaries
<PAGE> 11
- -------------------------------------------------------------------------------
10 Business Segment Information
The Company operates principally in three industry segments: Textile
Services, Manufacturing and Marketing and Retail Sales. These segments,
including products and principal markets, are described elsewhere in this
report.
<TABLE>
<CAPTION>
(Dollars in thousands) 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $254,893 $244,496 $215,248 $218,466 $230,302
Manufacturing and marketing 180,845 178,584 174,985 178,041 177,366
Retail sales 71,803 68,876 56,732 54,575 49,946
Intersegment sales (20,527) (19,124) (19,837) (20,285) (23,143)
- ---------------------------------------------------------------------------------------------------------------------
$487,014 $472,832 $427,128 $430,797 $434,471
=====================================================================================================================
Earnings
Textile services $ 17,069 $ 20,153 $ 19,011 $ 19,567 $ 28,272
Manufacturing and marketing 5,728 7,003 6,962 10,150 16,388
Retail sales 6,706 6,270 4,125 4,051 3,470
Restructuring charge (14,145) -- -- -- --
Interest, corporate expenses and other, net (13,367) (12,447) (12,183) (11,719) (11,561)
Eliminations (136) 275 145 204 (51)
- ---------------------------------------------------------------------------------------------------------------------
$ 1,855 $ 21,254 $ 18,060 $ 22,253 $ 36,518
=====================================================================================================================
Assets (as of year end)
Textile services $164,390 $165,499 $149,909 $144,726 $154,318
Manufacturing and marketing 146,340 153,192 152,780 153,432 149,866
Retail sales 26,182 26,120 20,498 18,633 18,153
Corporate 16,315 8,737 9,674 9,866 12,836
- ---------------------------------------------------------------------------------------------------------------------
$353,227 $353,548 $332,861 $326,657 $335,173
=====================================================================================================================
Depreciation
Textile services $ 8,215 $ 8,032 $ 7,833 $ 7,676 $ 7,059
Manufacturing and marketing 4,052 3,775 3,751 3,645 3,527
Retail sales 1,442 1,390 1,210 1,200 1,105
Corporate 88 100 78 57 52
- ---------------------------------------------------------------------------------------------------------------------
$ 13,797 $ 13,297 $ 12,872 $ 12,578 $ 11,743
=====================================================================================================================
Capital additions, net
Textile services $ 4,664 $ 6,454 $ 5,055 $ 7,800 $ 9,891
Manufacturing and marketing 2,921 3,587 2,475 1,517 1,603
Retail sales 1,118 1,280 940 554 1,535
Corporate 57 145 300 28 130
- ---------------------------------------------------------------------------------------------------------------------
$ 8,760 $ 11,466 $ 8,770 $ 9,899 $ 13,159
=====================================================================================================================
</TABLE>
Sales of foreign operations and export sales were not significant. The
Company has no one major customer. Corporate assets consist primarily of
cash, investments, cash surrender value of officers' life insurance and
office furniture and fixtures. Corporate expenses consist of the Company's
principal administrative and financial functions, which are centrally
managed. Capital additions do not include the cost of properties acquired in
business acquisitions.
Angelica Corporation and Subsidiaries 27
<PAGE> 12
- -------------------------------------------------------------------------------
11 Unaudited Quarterly Financial Data
Quarterly results for 1996 and 1995 are shown below:
<TABLE>
<CAPTION>
Fiscal 1996 Quarter Ended
(Dollars in thousands, except per share amounts) April 29 July 29 October 28 January 27
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $ 64,904 $ 63,513 $ 63,525 $ 62,951
Manufacturing and marketing 47,102 45,890 46,114 41,739
Retail sales 16,883 17,339 19,542 18,039
Intersegment sales (5,062) (4,882) (5,586) (4,997)
- ------------------------------------------------------------------------------------------------------
123,827 121,860 123,595 117,732
- ------------------------------------------------------------------------------------------------------
Gross profit
Textile services 13,702 12,149 11,641 11,915
Manufacturing and marketing 10,379 10,169 9,995 8,398
Retail sales 9,214 9,311 10,799 9,802
- ------------------------------------------------------------------------------------------------------
33,295 31,629 32,435 30,115
- ------------------------------------------------------------------------------------------------------
Restructuring charge -- -- -- (14,145)
- ------------------------------------------------------------------------------------------------------
Net income (loss) $ 3,438 $ 2,646 $ 2,834 $ (7,777)
======================================================================================================
Net income (loss) per share $ .38 $ .29 $ .31 $ (.85)
======================================================================================================
<CAPTION>
Fiscal 1995 Quarter Ended
(Dollars in thousands, except per share amounts) April 30 July 30 October 29 January 28
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $ 61,041 $ 59,515 $ 61,056 $ 62,884
Manufacturing and marketing 44,940 46,685 45,133 41,826
Retail sales 16,255 16,174 18,958 17,489
Intersegment sales (5,181) (4,182) (5,051) (4,710)
- ------------------------------------------------------------------------------------------------------
117,055 118,192 120,096 117,489
- ------------------------------------------------------------------------------------------------------
Gross profit
Textile services 13,829 12,058 13,103 12,287
Manufacturing and marketing 9,302 10,365 8,897 9,576
Retail sales 8,745 8,642 10,318 9,701
- ------------------------------------------------------------------------------------------------------
31,876 31,065 32,318 31,564
- ------------------------------------------------------------------------------------------------------
Net income $ 3,145 $ 3,184 $ 4,204 $ 2,538
======================================================================================================
Net income per share $ .35 $ .35 $ .46 $ .28
======================================================================================================
</TABLE>
28 Angelica Corporation and Subsidiaries
<PAGE> 13
Report of Independent Public Accountants
- -------------------------------------------------------------------------------
To Angelica Corporation:
We have audited the accompanying consolidated balance sheets of Angelica
Corporation (a Missouri corporation) and subsidiaries as of January 27, 1996
and January 28, 1995, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the
period ended January 27, 1996. These financial statements are the
responsibility of the Company's Management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by Management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Angelica Corporation and
subsidiaries as of January 27, 1996 and January 28, 1995, and the results of
their operations and their cash flows for each of three years in the period
ended January 27, 1996, in conformity with generally accepted accounting
principles.
/s/ Arthur Andersen LLP
St. Louis, Missouri
March 12, 1996
Common Stock Data
- -------------------------------------------------------------------------------
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol AGL. The quarterly market price ranges of the Common Stock and
dividends per share paid during fiscal 1996 and fiscal 1995 were as follows:
<TABLE>
<CAPTION>
Quarter 1st 2nd 3rd 4th
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal 1996
High $ 27 1/2 $ 26 1/4 $ 25 3/8 $ 24 3/8
Low 24 3/8 24 5/8 21 7/8 19 3/8
Dividend $.235 $.235 $.240 $.240
- -------------------------------------------------------------------------------------------------------
Fiscal 1995
High $ 28 1/8 $ 27 $ 28 $ 27 5/8
Low 24 1/2 24 5/8 25 5/8 25
Dividend $.235 $.235 $.235 $.235
- -------------------------------------------------------------------------------------------------------
</TABLE>
Angelica Corporation and Subsidiaries 29
<PAGE> 14
<TABLE>
Financial Summary--11 Years
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
For Years Ended
(Dollars in thousands, January 27, January 28, January 29, January 30, February 1, January 26,
except per share amounts) 1996 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations
Combined sales and textile service
revenues $487,014 $472,832 $427,128 $430,797 $434,471 $413,635
Gross profit 127,474 126,823 116,199 117,297 128,015 122,737
Operating expenses and other, net,
excluding interest expense 102,370 97,663 90,695 87,524 84,505 80,553
Restructuring charge 14,145<Fa> -- -- -- -- --
Interest expense 9,104 7,906 7,444 7,520 6,992 6,274
Income before income taxes and
cumulative effect of accounting
change 1,855 21,254 18,060 22,253 36,518 35,910
Provision for income taxes 714 8,183 6,909 8,450 13,848 13,814
Income before cumulative effect of
accounting change 1,141 13,071 11,151 13,803 22,670 22,096
Cumulative effect of accounting change -- -- -- 1,984<Fb> -- --
Net income $ 1,141 $ 13,071 $ 11,151 $ 15,787 $ 22,670 $ 22,096
- -----------------------------------------------------------------------------------------------------------------------------
Per Share Data
Net income $ .13<Fa> $ 1.44 $ 1.23 $ 1.71<Fb> $ 2.43 $ 2.37
Cash dividends paid .95 .94 .93 .92 .89 .84
Common shareholders' equity $ 20.73 $ 21.57 $ 21.13 $ 20.88 $ 20.43 $ 18.92
- -----------------------------------------------------------------------------------------------------------------------------
Ratios
Current ratio (current assets to
current liabilities) 5.0 to 1 3.2 to 1 4.0 to 1 4.7 to 1 4.2 to 1 2.9 to 1
Percent long-term debt to long-term
debt and equity 34.6% 26.2% 27.3% 29.2% 29.7% 24.8%
Gross profit margin 26.2% 26.8% 27.2% 27.2% 29.5% 29.7%
Pretax profit margin .4% 4.5% 4.2% 5.2% 8.4% 8.7%
Effective tax rate 38.5% 38.5% 38.3% 38.0% 37.9% 38.5%
Net income margin .2% 2.8% 2.6% 3.7% 5.2% 5.3%
Return on average shareholders' equity .4% 6.7% 5.8% 8.2% 12.3% 13.0%
Return on average total assets .3% 3.8% 3.4% 4.8% 7.0% 7.4%
- -----------------------------------------------------------------------------------------------------------------------------
Other Selected Data
Working capital $181,043 $150,734 $157,188 $161,129 $160,379 $134,964
Additions to property and equipment,
net 8,760 11,466 8,770 9,899 13,159 13,537
Depreciation expense 13,797 13,297 12,872 12,578 11,743 10,313
Long-term debt, less current maturities 100,103 69,683 72,255 78,175 80,506 57,782
Total assets $353,227 $353,548 $332,861 $326,657 $335,173 $316,439
Average number of shares of Common Stock
outstanding 9,139,961 9,107,262 9,089,365 9,217,199 9,344,748 9,329,503
Approximate number of employees 9,700 9,800 9,500 9,000 9,100 9,300
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
<Fa> Restructuring charge taken in fourth quarter of fiscal 1996. Effect on net income per share is a reduction of $.95.
<Fb> Includes cumulative effect to February 1, 1992 of implementing Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Cumulative effect on net income per share is $.21.
This information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this
report.
30 Angelica Corporation and Subsidiaries
<PAGE> 15
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
For Years Ended
(Dollars in thousands, January 27, January 28, January 30, January 31, January 25,
except per share amounts) 1990 1989 1988 1987 1986
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Combined sales and textile service
revenues $368,752 $328,134 $306,669 $291,704 $269,099
Gross profit 108,150 92,629 91,648 88,956 80,866
Operating expenses and other, net,
excluding interest expense 71,837 62,784 59,552 54,540 46,033
Restructuring charge -- -- -- -- --
Interest expense 5,077 2,783 1,860 2,360 2,458
Income before income taxes and
cumulative effect of accounting
change 31,236 27,062 30,236 32,056 32,375
Provision for income taxes 12,022 10,420 13,001 15,355 15,216
Income before cumulative effect of
accounting change 19,214 16,642 17,235 16,701 17,159
Cumulative effect of accounting change -- -- -- -- --
Net income $ 19,214 $ 16,642 $ 17,235 $ 16,701 $ 17,159
- --------------------------------------------------------------------------------------------------------------
Per Share Data
Net income $ 2.06 $ 1.79 $ 1.85 $ 1.79 $ 1.84
Cash dividends paid .77 .73 .70 .61 .59
Common shareholders' equity $ 17.36 $ 16.09 $ 14.95 $ 13.78 $ 12.56
- --------------------------------------------------------------------------------------------------------------
Ratios
Current ratio (current assets to
current liabilities) 3.4 to 1 3.0 to 1 3.1 to 1 4.3 to 1 4.1 to 1
Percent long-term debt to long-term
debt and equity 23.9% 11.3% 13.5% 16.4% 18.6%
Gross profit margin 29.3% 28.2% 29.9% 30.5% 30.1%
Pretax profit margin 8.5% 8.3% 9.9% 11.0% 12.0%
Effective tax rate 38.5% 38.5% 43.0% 47.9% 47.0%
Net income margin 5.2% 5.1% 5.6% 5.7% 6.4%
Return on average shareholders' equity 12.3% 11.5% 12.8% 13.5% 15.3%
Return on average total assets 7.5% 7.4% 8.4% 8.8% 9.9%
- ---------------------------------------------------------------------------------------------------------------
Other Selected Data
Working capital $130,072 $104,218 $ 95,239 $101,119 $ 94,771
Additions to property and equipment,
net 12,922 6,312 16,835 9,880 10,310
Depreciation expense 9,360 8,513 7,617 7,104 5,901
Long-term debt, less current maturities 50,588 19,013 21,588 25,236 26,756
Total assets $279,168 $232,883 $216,441 $194,958 $183,317
Average number of shares of Common Stock
outstanding 9,327,025 9,299,105 9,335,418 9,341,814 9,337,558
Approximate number of employees 8,400 7,800 7,400 7,000 6,700
- --------------------------------------------------------------------------------------------------------------
<FN>
<Fa> Restructuring charge taken in fourth quarter of fiscal 1996. Effect on net income per share is a reduction of $.95.
<Fb> Includes cumulative effect to February 1, 1992 of implementing Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Cumulative effect on net income per share is $.21.
This information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this
report.
</TABLE>
Angelica Corporation and Subsidiaries 31
<PAGE> 1
Exhibit 21
Subsidiaries
------------
Registrant: Angelica Corporation, State of Incorporation: Missouri
<TABLE>
<CAPTION>
Percentage
of Voting
Securities
State of Owned by
Name Incorporation Registrant
---- ------------- ----------
<S> <C> <C>
Angelica Realty Co. California 100%
Angelica Healthcare Services
Group, Inc. California 100%
Angelica International Ltd. Federal Corporation, Canada 100%
Angelica Healthcare Services
Group, Inc. New York 100%
Southern Service Company California 100%
Industrias Textiles El Curu Costa Rica 100%
Angelica Holdings Limited<F*> United Kingdom 100%
</TABLE>
Retail operations of the Registrant include a chain of 269 retail uniform
specialty shops operating under the umbrella name of "Life Uniform and Shoe
Shops." Generally, all shops operating in a specific state form one company
incorporated under the laws of that state. Included in the above number are
20 shops located in three states operating under the name Z & H Uniforms,
Inc. These form one company incorporated in Pennsylvania. All such
corporations (38) are wholly-owned subsidiaries of the Registrant.
[FN]
<F*>Parent Company of Angelica International Limited, incorporated under the
laws of the United Kingdom, all of whose voting securities are owned by
Angelica Holdings Limited.
All of the above subsidiaries are included in the consolidated financial
statements filed herewith.
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation of
our report incorporated by reference in this Form 10-K, into the
Corporation's previously filed Form S-8 Registration Statements Nos. 33-5524,
33-22850, 2-77932, 2-97291, 33-625, 33-45410 and 33-50960.
/s/ Arthur Andersen LLP
-------------------------------------
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
April 23, 1996
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Angelica Corporation (hereinafter referred to as the
"Company") hereby constitutes and appoints L.J. Young, T.M. Armstrong, and L.
Linden Mann and each of them acting singly, the true and lawful agents and
attorneys, or agent and attorney, with full powers of substitution,
resubstitution and revocation, for and in the name, place and stead of the
undersigned to do any and all things and to execute any and all instruments
which said agents and attorneys, or any of them, may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
Annual Report on Form 10-K of the Company for the fiscal year ended January
27, 1996, including specifically, but without limiting the generality of the
foregoing, full power and authority to sign the name of each of the
undersigned in the capacities indicated below to the said Annual Report on
Form 10-K to be filed with the Securities and Exchange Commission, and to any
and all amendments to said Annual Report on Form 10-K, and each of the
undersigned hereby grants to said attorneys and agents, and to each of them
singly, full power and authority to do and perform on behalf of the
undersigned every act and thing whatsoever necessary or appropriate to be
done in the premises as fully as the undersigned could do in person, hereby
ratifying and confirming all that said attorneys and agents, or any of them,
or the substitutes or substitute of them or any of them, shall do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these
presents this 28th day of March, 1996.
/s/ L. J. Young /s/ T. M. Armstrong
- ------------------------------ --------------------------------
(L.J. Young) (T.M. Armstrong)
Chairman of the Board, President Senior Vice President-
and Chief Executive Officer Finance and Administration
(Principal Executive Officer) Chief Financial Officer
(Principal Financial Officer)
/s/ L. Linden Mann
-------------------------------
(L. Linden Mann)
Controller
(Principal Accounting Officer)
<PAGE> 2
/s/ Earle H. Harbison, Jr. /s/ Elliot H. Stein
- -------------------------- -------------------------------
(Earle H. Harbison, Jr.) (Elliot H. Stein)
Director Director
/s/ Lee M. Liberman /s/ William P. Stiritz
- -------------------------- -------------------------------
(Lee M. Liberman) (William P. Stiritz)
Director Director
/s/ Leslie F. Loewe /s/ H. Edwin Trusheim
- -------------------------- --------------------------------
(Leslie F. Loewe) (H. Edwin Trusheim)
Director Director
/s/ Martin Sneider
- --------------------------
(Martin Sneider)
Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements for period ended January 27, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-27-1996
<PERIOD-START> JAN-29-1995
<PERIOD-END> JAN-27-1996
<CASH> 11,029
<SECURITIES> 0
<RECEIVABLES> 69,851
<ALLOWANCES> (2,687)
<INVENTORY> 144,352
<CURRENT-ASSETS> 226,581
<PP&E> 194,007
<DEPRECIATION> (103,213)
<TOTAL-ASSETS> 353,227
<CURRENT-LIABILITIES> 45,538
<BONDS> 100,103
<COMMON> 9,472
0
0
<OTHER-SE> 180,058
<TOTAL-LIABILITY-AND-EQUITY> 353,227
<SALES> 232,121
<TOTAL-REVENUES> 487,014
<CGS> 154,054
<TOTAL-COSTS> 359,540
<OTHER-EXPENSES> 115,184
<LOSS-PROVISION> 1,331
<INTEREST-EXPENSE> 9,104
<INCOME-PRETAX> 1,855
<INCOME-TAX> 714
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,141
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
<PAGE> 1
Exhibit 99.1
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
-------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from --------------to---------------
Commission file number 1-5674
----------------------------------------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
THE ANGELICA CORPORATION
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
Financial Statements and Exhibits.
- ---------------------------------
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1995 and
December 31, 1994
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1995
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
(b) Exhibits.
--------
23. Consent of Independent Public Accountants.
-2-
<PAGE> 3
THE ANGELICA CORPORATION
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Net Assets Available for Plan Benefits--December 31, 1994
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1995
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes--December 31, 1995
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1995
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Retirement Savings Plan (the Plan) as of
December 31, 1995 and 1994, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1995.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1995 and 1994, and the changes in net assets available for
plan benefits for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
St. Louis, Missouri,
April 2, 1996
<PAGE> 6
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
---------------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
-------------- --------- ----------- ------------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 903,250 $ 903,250 $ - $ - $ -
American Balanced Fund 548,021 - 548,021 - -
Massachusetts Capital Development Fund 442,317 - 442,317 - -
Washington Mutual Investors Fund 5,743,910 - 5,743,910 - -
Commonwealth Life Insurance Company
Group Annuity Contract 2,051,926 - - 2,051,926 -
Hartford Life Insurance Company Group
Annuity Contract 4,876,061 - - 4,876,061 -
LaSalle National Income Plus Fund 2,736,791 - - 2,736,791 -
Society National Bank MGD GIC Fund 9,528,757 - - 9,528,757 -
Loans to participants 1,340,431 - - 1,340,431 -
Boatmen's Employee Benefit
Short-Term Fund 232,598 10,283 54,641 165,120 2,554
-------------- --------- ----------- ------------ -------
28,404,062 913,533 6,788,889 20,699,086 2,554
OTHER ASSETS:
Contributions receivable (including
employer's contributions of $16,790) 140,826 7,654 39,883 91,379 1,910
Interest and dividends receivable 413,156 10,586 401,865 705 -
Loan payments receivable 14,967 - - 14,967 -
Other receivables 2,093 - - 2,093 -
-------------- --------- ----------- ------------ -------
Total assets 28,975,104 931,773 7,230,637 20,808,230 4,464
-------------- --------- ----------- ------------ -------
<CAPTION>
LIABILITIES
-----------
<S> <C> <C> <C> <C> <C>
LIABILITIES:
Premiums payable 4,464 - - - 4,464
Other payables 85,052 14 16,693 68,345 -
-------------- --------- ----------- ------------ -------
Total liabilities 89,516 14 16,693 68,345 4,464
-------------- --------- ----------- ------------ -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 28,885,588 $ 931,759 $ 7,213,944 $ 20,739,885 $ -
============== ========= =========== ============ =======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1994
-----------------
<CAPTION>
Investment Funds
--------------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
------------- ----------- ----------- ------------ ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 1,279,922 $ 1,279,922 $ - $ - $ -
American Balanced Fund 157,964 - 157,964 - -
Massachusetts Capital Development Fund 385,485 - 385,485 - -
Washington Mutual Investors Fund 3,567,531 - 3,567,531 - -
General American Life Insurance
Company Group Annuity Contract 5,884,545 - - 5,884,545 -
Hartford Life Insurance Company
Group Annuity Contract 4,558,070 - - 4,558,070 -
LaSalle National Income Plus Fund 1,375,337 - - 1,375,337 -
Society National Bank MGD GIC Fund 6,016,199 - - 6,016,199 -
Loans to participants 1,238,295 - - 1,238,295 -
Boatmen's Employee Benefit
Short-Term Fund 199,094 27,843 24,573 144,583 2,095
------------- ----------- ----------- ------------ -------
24,662,442 1,307,765 4,135,553 19,217,029 2,095
OTHER ASSETS:
Cash on deposit with Trustee 35,309 - - 35,309 -
Contributions receivable (including
employer's contributions of $18,390) 150,331 10,044 29,849 107,828 2,610
Interest and dividends receivable 175,897 11,095 164,003 799 -
Loan payments receivable 24,773 - - 24,773 -
Other receivables 34,304 - - 34,304 -
------------- ----------- ----------- ------------ -------
Total assets 25,083,056 1,328,904 4,329,405 19,420,042 4,705
------------- ----------- ----------- ------------ -------
<CAPTION>
LIABILITIES
-----------
<S> <C> <C> <C> <C> <C>
LIABILITIES:
Premiums payable 4,705 - - - 4,705
Other payables 74,558 32,025 4,530 38,003 -
------------- ----------- ----------- ------------ -------
Total liabilities 79,263 32,025 4,530 38,003 4,705
------------- ----------- ----------- ------------ -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 25,003,793 $ 1,296,879 $ 4,324,875 $ 19,382,039 $ -
============= =========== =========== ============ =======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Investment Funds
--------------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
------------- ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 2,908,508 $ 180,169 $ 780,088 $ 1,892,042 $ 56,209
Employer contributions 484,363 32,394 111,114 340,855 -
Interest income 1,393,393 1,405 1,354 1,390,634 -
Dividend income 576,561 43,142 533,419 - -
Interfund transfers - (210,675) 436,350 (225,675) -
Rollovers 26,975 12,477 3,176 11,322 -
Change in unrealized appreciation of
investments 885,692 (290,804) 1,176,496 - -
Net realized gain (loss) on sale of
investments 66,175 (45,478) 111,653 - -
Other receipts (521) 1,435 - (1,956) -
------------ ----------- ----------- ------------ -------
Total additions 6,341,146 (275,935) 3,153,650 3,407,222 56,209
------------ ----------- ----------- ------------ -------
DEDUCTIONS:
Participant withdrawals 2,403,142 89,185 264,581 2,049,376 -
Life insurance premiums 56,209 - - - 56,209
------------ ----------- ----------- ------------ -------
Total deductions 2,459,351 89,185 264,581 2,049,376 56,209
------------ ----------- ----------- ------------ -------
Net increase (decrease) 3,881,795 (365,120) 2,889,069 1,357,846 -
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF YEAR 25,003,793 1,296,879 4,324,875 19,382,039 -
------------ ----------- ----------- ------------ -------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF YEAR $ 28,885,588 $ 931,759 $ 7,213,944 $ 20,739,885 $ -
============ =========== =========== ============ =======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Retirement Savings Plan
(the Plan) is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan
documents.
General
- -------
The Plan, as amended and restated, was adopted by the Board of Directors of
Angelica Corporation (the Company) to provide participants an opportunity to
defer portions of their earnings so as to provide supplementary retirement
income and a measure of economic security. The Company is the Plan
Administrator and the assets of the Plan are held in trust by Boatmen's Trust
Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time employees who are residents of the United States and who have
either (i) completed one year of service with the Company and are age 21 or
older or (ii) completed three years of service, are eligible to participate
in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals. The Company provides a matching
contribution of 1/4 of 1% for each 1% (up to a maximum of 6%) of the total
amount of compensation deferred by the participant per year, provided that
the maximum amount of matching contribution on behalf of any one participant
will be $600.
Vesting
- -------
The salary deferral and company matching contributions of each participant's
account are fully vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Any participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1995 and 1994, the Plan had $674,167 and $337,648, respectively, in net
assets available for plan benefits that had been requested to be paid to
terminated participants. Although not shown separately in the accompanying
financial statements, the liability to terminated participants is shown
separately on the Form 5500.
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Such loans made prior to November 1989 bear interest at
a rate equal to the rate being earned by the Interest Income Fund at the time
the loan was made. Loans made subsequent to October 1989 bear interest at
the prime rate plus 1/2% at the time the loan was made. All loans must be
secured by the participant's account and are repayable in installments by
payroll deductions.
<PAGE> 10
- 2 -
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant shall direct that his
or her contributions be invested in one or more of the investment options
below in increments of 10%. Such direction may be revised by participants on
a monthly basis.
Company Stock Fund
These funds are invested in Angelica Corporation Common Stock.
Mutual Fund
Each participant may choose to invest in the American Balanced
Fund and/or the Washington Mutual Investors Fund. Participants may
no longer make contributions into the Massachusetts Capital
Development Fund but are not required to transfer their account
balances elsewhere.
Interest Income Fund
This fund is invested in group annuity contracts with
Commonwealth Life Insurance Company, Hartford Life Insurance Company,
LaSalle National Bank and Society National Bank.
Directed Purchase of Life Insurance
Each participant has the right to direct a portion of his or her
contributions to purchase insurance on his or her life or the lives of
his or her spouse and children under age 23. Only participants
contributing to this fund as of October 31, 1989, are allowed to
continue contributions in the future.
The number of participants with an account balance in each fund at December
31, 1995, was as follows:
<TABLE>
<S> <C>
Company Stock Fund 480
American Balanced Fund 229
Massachusetts Capital Development Fund 63
Washington Mutual Investors Fund 569
Interest Income Fund 2,059
Directed Purchase of Life Insurance 133
Loans to participants 63
</TABLE>
The total number of participants in the Plan was less than the sum of the
number of participants shown above because some were participating in more
than one fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based on publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
<PAGE> 11
- 3 -
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1995 and 1994, are as follows (in
thousands):
<TABLE>
<S> <C>
December 31, 1995:
Washington Mutual Investors Fund $5,744
Commonwealth Life Insurance Company Group Annuity Contract 2,052
Hartford Life Insurance Company Group Annuity Contract 4,876
LaSalle National Income Plus Fund 2,737
Society National Bank MGD GIC Fund 9,529
December 31, 1994:
Angelica Corporation Common Stock $1,280
Washington Mutual Investors Fund 3,568
General American Life Insurance Company Group Annuity Contract 5,885
Hartford Life Insurance Company Group Annuity Contract 4,558
LaSalle National Income Plus Fund 1,375
Society National Bank MGD GIC Fund 6,016
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated August 31, 1994, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the Company and its employees are not taxable to
the participants until distributions from the Plan are made. The Plan
Administrator believes that the Plan, as amended and as currently operating,
is in compliance with all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
------------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date. While the Company has no plans to
terminate the Plan, the Tax Credit portion of the Company Stock Fund was
rolled into a separate plan, The Angelica Corporation Tax Credit Employee
Stock Ownership Plan (PAYSOP) and simultaneously terminated. The Company
received an IRS determination letter dated May 25, 1994, stating that this
termination does not affect the tax exempt status of the Plan.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement and shall have all such other powers as are necessary or
appropriate for the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
<PAGE> 12
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
<TABLE>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Number of
Shares or
Principal
Amount Cost Fair Value
------------ ------------- --------------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock 44,061 $ 1,168,668 $ 903,250
Boatmen's Employee Benefit Short-Term Fund $ 10,283 10,283 10,283
------------- --------------
1,178,951 913,533
------------- --------------
MUTUAL FUND:
American Balanced Fund 38,729.385 524,468 548,021
Massachusetts Capital Development Fund 37,044.942 418,671 442,317
Washington Mutual Investors Fund 261,443.320 4,668,445 5,743,910
Boatmen's Employee Benefit Short-Term Fund $ 54,641 54,641 54,641
------------- --------------
5,666,225 6,788,889
------------- --------------
INTEREST INCOME FUND:
Commonwealth Life Insurance Company Group Annuity Contract $ 2,051,926 2,051,926 2,051,926
Hartford Life Insurance Company Group Annuity Contract $ 4,876,061 4,876,061 4,876,061
LaSalle National Income Plus Fund $ 2,736,791 2,736,791 2,736,791
Society National Bank MGD GIC Fund $ 9,528,757 9,528,757 9,528,757
Boatmen's Employee Benefit Short-Term Fund $ 165,120 165,120 165,120
Loans to participants, interest ranging from 6.5% to
10.5% $ 1,340,431 1,340,431 1,340,431
------------- --------------
20,699,086 20,699,086
------------- --------------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's Employee Benefit Short-Term Fund $ 2,554 2,554 2,554
------------- --------------
Total investments $ 27,546,816 $ 28,404,062
============= ==============
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
<TABLE>
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS
-------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995 <Fa>
-----------------------------------------
<CAPTION>
Purchases Sales
-------------------------- --------------------------------------------------------
Number of Purchase Number of Cost of Net
Description of Asset Transactions Price Transactions Sales Price Assets Gain
- -------------------- ------------ ------------ ------------ ------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Washington Mutual
Investors Fund 27 $ 1,624,528 19 $ 636,601 $ 535,248 $101,353
LaSalle National
Income Plus Fund 12 1,585,190 8 245,028 245,028 -
American Funds
Cash Management Fund 25 648,603 25 648,603 648,603 -
Society National
Bank MGD GIC Fund 12 3,779,084 13 759,794 759,794 -
Boatmen's Employee
Benefit Short-Term Fund 272 13,695,747 202 13,673,107 13,673,107 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report on The Angelica Corporation Retirement Savings Plan financial
statements included in this Form 11-K, into the Corporation's previously
filed Registration Statement on Form S-8 File No. 33-5524.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 23, 1996
-14-
<PAGE> 1
Exhibit 99.2
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
-----------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from --------------to---------------
Commission file number 1-5674
-----------------------------------------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
THE ANGELICA CORPORATION
COLLINWOOD 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
Financial Statements and Exhibits.
- ---------------------------------
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1995 and
December 31, 1994
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1995
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
(b) Exhibits.
--------
23. Consent of Independent Public Accountants.
-2-
<PAGE> 3
THE ANGELICA CORPORATION
COLLINWOOD 401(k) PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Net Assets Available for Plan Benefits--December 31, 1994
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1995
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes--December 31, 1995
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1995
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Collinwood 401(k) Plan (the Plan) as of
December 31, 1995 and 1994, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1995.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1995 and 1994, and the changes in net assets available for
plan benefits for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
St. Louis, Missouri,
April 2, 1996
<PAGE> 6
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
---------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 225 $ 225 $ - $ - $ -
American Balanced Fund 20 - 20 - -
Washington Mutual Investors Fund 2,233 - 2,233 - -
Hartford Life Insurance Company
Group Annuity Contract 223,039 - - 223,039 -
LaSalle National Income Plus Fund 49,235 - - 49,235 -
Society National Bank MGD GIC Fund 497,455 - - 497,455 -
Boatmen's Employee Benefit Short-Term Fund 5,581 7 74 5,367 133
Loans to participants 66,330 - - 66,330 -
--------- ----- ------- --------- ------
844,118 232 2,327 841,426 133
OTHER ASSETS:
Contributions receivable (including
employer's contribution of $428) 2,516 - 35 2,413 68
Interest and dividends receivable 162 3 130 29 -
Loan payments receivable 3,651 - - 3,651 -
--------- ----- ------- --------- ------
Total assets 850,447 235 2,492 847,519 201
<CAPTION>
LIABILITIES
-----------
<S> <C> <C> <C> <C> <C>
PREMIUMS PAYABLE 201 - - - 201
--------- ----- ------- --------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 850,246 $ 235 $ 2,492 $ 847,519 $ -
========= ===== ======= ========= ======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1994
-----------------
<CAPTION>
Investment Funds
---------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 248 $ 248 $ - $ - $ -
Washington Mutual Investors Fund 10,955 - 10,955 - -
General American Life Insurance
Company Group Annuity Contract 193,305 - - 193,305 -
Hartford Life Insurance Company Group
Annuity Contract 214,402 - - 214,402 -
IDS Trust Company Collective Income Fund - - - - -
Boatmen's Employee Benefit Short-Term Fund 7,787 44 71 7,579 93
LaSalle National Income Plus Fund 55,940 - - 55,940 -
Society National Bank MGD GIC Fund 262,926 - - 262,926 -
Loans to participants 56,977 - - 56,977 -
--------- ----- -------- ---------- -----
802,540 292 11,026 791,129 93
OTHER ASSETS:
Cash on deposit with Trustee 1,222 - - 1,222 -
Contributions receivable (including
employer's contribution of $788) 4,556 - 103 4,320 133
Interest and dividends receivable 432 5 397 30 -
Loan payments receivable 1,192 - - 1,192 -
--------- ----- -------- ---------- -----
Total assets 809,942 297 11,526 797,893 226
<CAPTION>
LIABILITIES
-----------
<S> <C> <C> <C> <C> <C>
PREMIUMS PAYABLE 226 - - - 226
--------- ----- -------- ---------- -----
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 809,716 $ 297 $ 11,526 $ 797,893 $ -
========= ===== ======== ========== =====
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Investment Funds
---------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 67,417 $ - $ 885 $ 64,122 $ 2,410
Employer contributions 13,773 - 57 13,716
Interest income 56,438 1 6 56,431 -
Dividend income 357 10 347 - -
Interfund transfers - - (12,698) 12,698 -
Change in unrealized appreciation of
investments 360 (73) 433 - -
Gain on sale of investments 1,936 - 1,936 - -
Other receipts 331 - - 331 -
--------- ----- --------- --------- -------
140,612 (62) (9,034) 147,298 $ 2,410
--------- ----- --------- --------- -------
DEDUCTIONS:
Participant withdrawals 97,672 - - 97,672 -
Life insurance premiums 2,410 - - - 2,410
--------- ----- --------- --------- -------
100,082 - - 97,672 2,410
--------- ----- --------- --------- -------
Net increase (decrease) 40,530 (62) (9,034) 49,626 -
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF YEAR 809,716 297 11,526 797,893 -
--------- ----- --------- --------- -------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF YEAR $ 850,246 $ 235 $ 2,492 $ 847,519 $ -
========= ===== ========= ========= =======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
1. DESCRIPTION OF PLAN:
-------------------
The following description of The Angelica Corporation Collinwood 401(k) Plan
(the Plan) is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan
document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) to provide participants an opportunity to defer portions of their
earnings so as to provide supplementary retirement income and a measure of
economic security. The Company is the Plan Administrator and the assets of
the Plan are held in trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time union employees at the Company's Collinwood, Tennessee, plant
who have either (i) completed one year of service with the Company and are
age 21 or older or (ii) completed three years of service, are eligible to
participate in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals. The Company provides a matching
contribution of up to five cents for each hour worked by a participant.
Vesting
- -------
The salary deferral and company matching contributions of each participant's
account are fully vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Any participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1995 and 1994, the Plan had $18,871 and $17,082, respectively, in net assets
available for plan benefits that had been requested to be paid to terminated
participants. Although not shown separately in the accompanying financial
statements, the liability to terminated participants is shown separately on
the Form 5500.
<PAGE> 10
- 2 -
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Such loans made prior to November 1989 bear interest at
a rate equal to the rate being earned by the Interest Income Fund at the time
the loan was made. Loans made subsequent to October 1989 bear interest at
the prime rate plus 1/2% at the time the loan is made. All loans must be
secured by the participant's account and are repayable in installments by
payroll deductions.
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant directs his or her
contributions to be invested in one or more of the investment options
below in increments of 10%. Such direction may be revised by
participants on a monthly basis.
Company Stock Fund
This fund is invested in Angelica Corporation Common Stock.
Mutual Fund
Participants may choose to invest in the Washington Mutual
Investors Fund and/or the American Balanced Fund.
Interest Income Fund
This fund is invested in group annuity contracts with
Hartford Life Insurance Company, LaSalle National Bank and
Society National Bank.
Directed Purchase of Life Insurance
Each participant has the right to direct a portion of his
or her contributions to purchase insurance on his or her life
or the lives of his or her spouse and children under age 23.
Only participants contributing to the fund as of December 31,
1990, are allowed to continue contributions in the future.
The number of participants with an account balance in each fund at December
31, 1995, was as follows:
<TABLE>
<S> <C>
Company Stock Fund 2
American Balanced Fund 1
Washington Mutual Investors Fund 2
Interest Income Fund 170
Directed Purchase of Life Insurance 12
Loans to participants 60
</TABLE>
The total number of participants in the Plan was less than the sum of the
number of participants shown above because some were participating in more
than one fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based on publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
<PAGE> 11
- 3 -
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1995 and 1994, are as follows (in
thousands):
<TABLE>
<S> <C>
December 31, 1995:
Hartford Life Insurance Company Group Annuity Contract $223
LaSalle National Income Plus Fund 49
Society National Bank MGD GIC Fund 497
Loans to participants 66
December 31, 1994:
General American Life Insurance Company Group Annuity Contract $193
Hartford Life Insurance Company Group Annuity Contract 214
LaSalle National Income Plus Fund 56
Society National Bank MGD GIC Fund 263
Loans to participants 57
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated October 7, 1992, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the Company and its employees are not taxable to
the participants until distributions from the Plan are made. The Plan
Administrator believes that the Plan, as amended and as currently operating,
is in compliance with all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
------------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement and shall have all such other powers as are necessary or
appropriate to the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
<PAGE> 12
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
<TABLE>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
--------- -------- ----------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock 11 $ 307 $ 225
Boatmen's Employee Benefit Short-Term Fund $ 7 7 7
--------- ---------
314 232
--------- ---------
MUTUAL FUND:
American Balanced Fund 1.421 20 20
Washington Mutual Investors Fund 101.615 1,778 2,233
Boatmen's Employee Benefit Short-Term Fund $ 74 74 74
--------- ---------
1,872 2,327
--------- ---------
INTEREST INCOME FUND:
Hartford Life Insurance Company Group Annuity Contract $223,039 223,039 223,039
LaSalle National Income Plus Fund $ 49,235 49,235 49,235
Society National Bank MGD GIC Fund $497,455 497,455 497,455
Boatmen's Employee Benefit Short-Term Fund $ 5,367 5,367 5,367
Loans to participants, interest ranging from 6.5% to 10.5% $ 66,330 66,330 66,330
--------- ---------
841,426 841,426
--------- ---------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's Employee Benefit Short-Term Fund $ 133 133 133
--------- ---------
Total investments $ 843,745 $ 844,118
========= =========
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
<TABLE>
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Purchases Sales
------------------------- -------------------------------------------------------------
Number of Purchase Number of Sales Cost of Gain/
Description of Asset Transactions Price Transactions Price Assets (Loss)
-------------------- ------------ -------- ------------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Society National
Bank MGD GIC Fund 13 $260,496 11 $ 49,069 $ 48,659 $410
Boatmen's Employee
Benefit Short-Term Fund 114 457,442 50 459,648 459,648 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report on The Angelica Corporation Collinwood 401(k) Plan financial
statements included in this Form 11-K, into the Corporation's previously
filed Registration Statement on Form S-8 File No. 2-97291.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 23, 1996
-14-
<PAGE> 1
Exhibit 99.3
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
---------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from --------------to---------------
Commission file number 1-5674
----------------------------------------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
THE ANGELICA CORPORATION
SAVANNAH 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
Financial Statements and Exhibits.
- ---------------------------------
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1995 and
December 31, 1994
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1995
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
(b) Exhibits.
--------
23. Consent of Independent Public Accountants.
-2-
<PAGE> 3
THE ANGELICA CORPORATION
SAVANNAH 401(k) PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Net Assets Available for Plan Benefits--December 31, 1994
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1995
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes--December 31, 1995
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1995
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Savannah 401(k) Plan (the Plan) as of
December 31, 1995 and 1994, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1995.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1995 and 1994, and the changes in net assets available for
plan benefits for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
St. Louis, Missouri,
April 2, 1996
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
--------- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 881 $ 881 $ - $ - $ -
Massachusetts Capital Development Fund 1,291 - 1,291 - -
Washington Mutual Investors Fund 1,673 - 1,673 -
Hartford Life Insurance Company Group
Annuity Contract 145,859 - - 145,859 -
LaSalle National Income Plus Fund 21,716 - - 21,716 -
Society National Bank MGD GIC Fund 273,417 - - 273,417 -
Boatmen's Employee Benefit Short-Term
Fund 5,813 57 20 5,719 17
Loans to participants 27,974 - - 27,974 -
--------- ----- -------- --------- ----
478,624 938 2,984 474,685 17
OTHER ASSETS:
Contributions receivable (including
employer's contributions of $571) 3,687 5 14 3,655 13
Interest and dividends receivable 143 26 97 20 -
Loan payments receivable 732 - - 732 -
--------- ----- -------- --------- ----
Total assets 483,186 969 3,095 479,092 30
<CAPTION>
LIABILITIES
-----------
<S> <C> <C> <C> <C> <C>
PREMIUMS PAYABLE 30 - - - 30
--------- ----- -------- --------- ----
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $ 483,156 $ 969 $ 3,095 $ 479,092 $ -
========= ===== ======== ========= ====
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1994
-----------------
<CAPTION>
Investment Funds
------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
--------- ------- ------ -------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 3,702 $ 3,702 $ - $ - $ -
Massachusetts Capital Development Fund 1,009 - 1,009 - -
Washington Mutual Investors Fund 893 - 893 - -
General American Life Insurance Company
Group Annuity Contract 116,073 - - 116,073 -
Hartford Life Insurance Company Group
Annuity Contract 134,867 - - 134,867 -
LaSalle National Income Plus Fund 27,223 - - 27,223 -
Society National Bank MGD GIC Fund 139,472 - - 139,472 -
Boatmen's Employee Benefit Short-Term
Fund 8,547 59 287 8,184 17
Loans to participants 21,162 - - 21,162 -
--------- ------- ------- --------- ----
452,948 3,761 2,189 446,981 17
OTHER ASSETS:
Cash on deposit with Trustee 20 - - 20 -
Contributions receivable (including
employer's contributions of $814) 5,014 42 55 4,891 26
Interest and dividends receivable 135 31 37 67 -
Loan payments receivable 728 - - 728 -
Other receivables 2,467 - - 2,467 -
--------- ------- ------- --------- ----
Total assets 461,312 3,834 2,281 455,154 43
<CAPTION>
LIABILITIES
-----------
<S> <C> <C> <C> <C> <C>
PREMIUMS PAYABLE 43 - - - 43
--------- ------- ------- --------- ----
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $ 461,269 $ 3,834 $ 2,281 $ 455,154 $ -
========= ======= ======= ========= ====
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Investment Funds
------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
--------- ------- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 53,444 $ 380 $ 267 $ 52,413 $ 384
Employer contributions 10,110 83 40 9,987 -
Interest income 33,469 17 1 33,451 -
Dividend income 341 125 216 - -
Interfund transfers - (1,034) - 1,034 -
Change in unrealized appreciation of
investments 251 (291) 542 - -
Loss on sale of investments (710) (710) - - -
--------- ------- ------- --------- -----
96,905 (1,430) 1,066 96,885 384
--------- ------- ------- --------- -----
DEDUCTIONS:
Participant withdrawals 74,634 1,435 252 72,947 -
Life insurance premiums 384 - - - 384
--------- ------- ------- --------- -----
75,018 1,435 252 72,947 384
--------- ------- ------- --------- -----
Net increase (decrease) 21,887 (2,865) 814 23,938 -
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF YEAR 461,269 3,834 2,281 455,154 -
--------- ------- ------- --------- -----
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF YEAR $ 483,156 $ 969 $ 3,095 $ 479,092 $ -
========= ======= ======= ========= =====
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Savannah 401(k) Plan
(the Plan) is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan
document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) to provide participants an opportunity to defer portions of their
earnings so as to provide supplementary retirement income and a measure of
economic security. The Company is the Plan Administrator and the assets of
the Plan are held in trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time union employees at the Company's Savannah, Tennessee, plant who
have either (i) completed one year of service with the Company and are age 21
or older or (ii) completed three years of service, are eligible to
participate in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals. The Company provides a matching
contribution of up to five cents for each hour worked by a participant.
Vesting
- -------
The salary deferral and company matching contributions of each participant's
account are fully vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Any participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1995 and 1994, the Plan had $2,249 and $229, respectively, in net assets
available for plan benefits that had been requested to be paid to terminated
participants. Although not shown separately in the accompanying financial
statements, the liability to terminated participants is shown separately on
the Form 5500.
<PAGE> 10
- 2 -
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Such loans made prior to November 1989 bear interest at
a rate equal to the rate being earned by the Interest Income Fund at the time
the loan was made. Loans made subsequent to October 1989 bear interest at
the prime rate plus 1/2% at the time the loan is made. All loans must be
secured by the participant's account and are repayable in installments by
payroll deductions.
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant directs his or her
contributions to be invested in one or more of the investment options
below in increments of 10%. Such direction may be revised by
participants on a monthly basis.
Company Stock Fund
This fund is invested in Angelica Corporation Common Stock.
Mutual Fund
Each participant may choose to invest in the American Balanced
Fund and/or the Washington Mutual Investors Fund. Participants
may no longer make contributions into the Massachusetts
Capital Development Fund but are not required to transfer
their account balances elsewhere.
Interest Income Fund
This fund is invested in group annuity contracts with Hartford
Life Insurance Company, LaSalle National Bank and Society
National Bank.
Directed Purchase of Life Insurance
Each participant has the right to direct a portion of his
or her contributions to purchase insurance on his or her life
or the lives of his or her spouse and children under age 23.
Only participants contributing to the fund as of December 31,
1990, are allowed to continue contributions in the future.
<TABLE>
The number of participants with an account balance in each fund at December
31, 1995, was as follows:
<CAPTION>
<S> <C>
Company Stock Fund 4
Massachusetts Capital Development Fund 1
Washington Mutual Investors Fund 2
Interest Income Fund 130
Directed Purchase of Life Insurance 2
Loans to participants 26
</TABLE>
The total number of participants in the Plan was less than the sum of the
number of participants shown above because some were participating in more
than one fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based on publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
<PAGE> 11
- 3 -
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
<TABLE>
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1995 and 1994, are as follows (in
thousands):
<CAPTION>
December 31, 1995:
<S> <C>
Hartford Life Insurance Company Group Annuity Contract $146
Society National Bank MGD GIC Fund 273
Loans to participants 28
<CAPTION>
December 31, 1994:
<S> <C>
General American Life Insurance Company Group Annuity Contract $116
Hartford Life Insurance Company Group Annuity Contract 135
LaSalle National Income Plus Fund 27
Society National Bank MGD GIC Fund 139
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated October 6, 1992, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the Company and its employees are not taxable to
the participants until distributions from the Plan are made. The Plan
Administrator believes that the Plan, as amended and as currently operating,
is in compliance with all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
------------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement, and shall have all such other powers as are necessary or
appropriate to the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
<PAGE> 12
SCHEDULE I
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
--------- --------- ---------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock 43 $ 1,174 $ 881
Boatmen's Employee Benefit Short-Term Fund $ 57 57 57
--------- ---------
1,231 938
--------- ---------
MUTUAL FUND:
Massachusetts Capital Development Fund 108.119 1,302 1,291
Washington Mutual Investors Fund 76.153 1,331 1,673
Boatmen's Employee Benefit Short-Term Fund $ 20 20 20
--------- ---------
2,653 2,984
--------- ---------
INTEREST INCOME FUND:
Hartford Life Insurance Company Group Annuity Contract $145,859 145,859 145,859
LaSalle National Income Plus Fund $ 21,716 21,716 21,716
Society National Bank MGD GIC Fund $273,417 273,417 273,417
Boatmen's Employee Benefit Short-Term Fund $ 5,719 5,719 5,719
Loans to participants, interest ranging from 6.5% to 10.5% $ 27,974 27,974 27,974
--------- ---------
474,685 474,685
--------- ---------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's Employee Benefit Short-Term Fund $ 17 17 17
--------- ---------
Total investments $ 478,586 $ 478,624
========= =========
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
SCHEDULE II
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
-----------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Purchases Sales
------------------------- -------------------------------------------
Number of Purchase Number of Sales Cost of Gain/
Description of Asset Transactions Price Transactions Price Assets (Loss)
- -------------------- ------------ -------- ------------ ------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Society National Bank MGD
GIC Fund 13 $193,405 13 $ 72,993 $ 72,993 $ -
Boatmen's Employee Benefit
Short-Term Fund 124 304,365 66 308,611 308,611 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report on The Angelica Corporation Savannah 401(k) Plan financial
statements included in this Form 11-K, into the Corporation's previously
filed Registration Statement on Form S-8 File No. 33-625.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 23, 1996
-14-
<PAGE> 1
Exhibit 99.4
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
---------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from --------------to---------------
Commission file number 1-5674
----------------------------------------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
THE ANGELICA CORPORATION
MISSOURI PLANTS 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
Financial Statements and Exhibits.
- ---------------------------------
(a) Financial Statements. Pages of this
-------------------- -------------
Form 11-K
---------
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6-7
Plan Benefits - December 31, 1995 and
December 31, 1994
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1995
Notes to Financial Statements 9-11
Schedule I 12
Schedule II 13
(b) Exhibits.
--------
23. Consent of Independent Public Accountants.
-2-
<PAGE> 3
THE ANGELICA CORPORATION
MISSOURI PLANTS 401(k) PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1995
Statement of Net Assets Available for Plan Benefits--December 31, 1994
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1995
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes--December 31, 1995
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1995
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Missouri Plants 401(k) Plan (the Plan)
as of December 31, 1995 and 1994, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1995.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1995 and 1994, and the changes in net assets available for
plan benefits for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosures under the
Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
St. Louis, Missouri,
April 2, 1996
<PAGE> 6
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Investment Funds
---------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
---------- -------- -------- ----------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 11,726 $ 11,726 $ - $ -
American Balanced Fund 109 - 109 -
Washington Mutual Investors Fund 10,538 - 10,538 -
Hartford Life Insurance Company Group Annuity Contract 54,441 - - 54,441
Society National Bank MGD GIC Fund 101,744 - - 101,744
Boatmen's Employee Benefit Short-Term Fund 12,650 304 414 11,932
Loans to participants 5,068 - - 5,068
---------- -------- -------- ----------
196,276 12,030 11,061 173,185
OTHER ASSETS:
Contributions receivable 2,935 181 352 2,402
Interest and dividends receivable 803 135 613 55
Loan payments receivable 98 - - 98
---------- -------- -------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 200,112 $ 12,346 $ 12,026 $ 175,740
========== ======== ======== ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1994
-----------------
<CAPTION>
Investment Funds
---------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
---------- -------- -------- ----------
<S> <C> <C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 21,409 $ 21,409 $ - $ -
Washington Mutual Investors Fund 10,552 - 10,552 -
Hartford Life Insurance Company Group Annuity Contract 55,323 - - 55,323
Society National Bank MGD GIC Fund 104,098 - - 104,098
Boatmen's Employee Benefit Short-Term Fund 4,957 58 178 4,721
Loans to participants 3,169 - - 3,169
---------- -------- -------- ----------
199,508 21,467 10,730 167,311
OTHER ASSETS:
Cash on deposit with Trustee 77 - - 77
Contributions receivable 3,960 415 260 3,285
Interest and dividends receivable 577 179 383 15
Loan payments receivable 77 - - 77
---------- -------- -------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 204,199 $ 22,061 $ 11,373 $ 170,765
========== ======== ======== ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Investment Funds
---------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
---------- -------- --------- ----------
<S> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 66,194 $ 5,984 $ 4,960 $ 55,250
Interest income 12,349 43 33 12,273
Dividend income 1,533 663 870 -
Interfund transfers - - 257 (257)
Change in unrealized appreciation of investments (1,800) (3,617) 1,817 -
Net realized gain (loss) on sale of investments 158 (1,049) 1,207 -
---------- -------- --------- ----------
78,434 2,024 9,144 67,266
DEDUCTION- Participant withdrawals 82,521 11,739 8,491 62,291
---------- -------- --------- ----------
Net (decrease) increase (4,087) (9,715) 653 4,975
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
BEGINNING OF YEAR 204,199 22,061 11,373 170,765
---------- -------- --------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF YEAR $ 200,112 $ 12,346 $ 12,026 $ 175,740
========== ======== ========= ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 9
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Missouri Plants 401(k)
Plan (the Plan) is provided for general information purposes only. More
complete information regarding the Plan's provisions may be found in the plan
document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) to provide participants an opportunity to defer portions of their
earnings so as to provide supplementary retirement income and a measure of
economic security. The Company is the Plan Administrator and the assets of
the Plan are held in trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time union employees at the Company's Missouri plants who have
either (i) completed one year of service with the Company and are age 21 or
older or (ii) completed three years of service, are eligible to participate
in the Plan.
Contributions
- -------------
Eligible employees may contribute up to 12% of their annual compensation to
the Plan through payroll deferrals.
Vesting
- -------
The salary deferral contributions of each participant's account are fully
vested and nonforfeitable at all times.
Benefits
- --------
Participants are entitled to receive the balance of their accounts upon
death, total disability, retirement or termination of employment, or upon
request after reaching age 59-1/2. Any participants who have suffered a
hardship (as defined by the Internal Revenue Service and the Plan) may also
withdraw all or any portion of their account balances. As of December 31,
1995 and 1994, the Plan had $1,462 and $1,334, respectively, in net assets
available for plan benefits that had been requested to be paid to terminated
participants. Although not shown separately in the accompanying financial
statements, the liability to terminated participants is shown separately on
the Form 5500.
Loan Provision
- --------------
The Plan allows participants to borrow from their accounts, subject to
certain limitations. Loans bear interest at the prime rate plus 1/2% at the
time the loan was made. All loans must be secured by the participant's
account and are repayable in installments by payroll deductions.
<PAGE> 10
- 2 -
Investment Programs
- -------------------
The investment programs of the Plan are as follows:
Upon enrollment or reenrollment, each participant directs his or her
contributions to be invested in one or more of the investment options below
in increments of 10%. Such direction may be revised by participants on a
monthly basis.
Company Stock Fund
This fund is invested in Angelica Corporation Common Stock.
Mutual Fund
Participants may choose to invest in the Washington Mutual
Investors Fund and/or the American Balanced Fund.
Interest Income Fund
This fund is invested in group annuity contracts with
Hartford Life Insurance Company and Society National Bank.
The number of participants with an account balance in each fund at December
31, 1995, was as follows:
<TABLE>
<S> <C>
Company Stock Fund 31
American Balanced Fund 3
Washington Mutual Investors Fund 22
Interest Income Fund 112
Loans to participants 9
</TABLE>
The total number of participants in the Plan was less than the sum of the
number of participants shown above because some were participating in more
than one fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based upon publicly stated price information. The "average cost" method is
used to determine the cost of securities sold. Investments in group annuity
contracts are stated at contract value.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
<PAGE> 11
- 3 -
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1995 and 1994, are as follows (in
thousands):
<TABLE>
<S> <C>
December 31, 1995:
Angelica Corporation Common Stock $ 12
Washington Mutual Investors Fund 11
Hartford Life Insurance Group Company Annuity Contract 54
Society National Bank MGD GIC Fund 102
Boatmen's Employee Benefit Short-Term Fund 13
December 31, 1994:
Angelica Corporation Common Stock $ 21
Washington Mutual Investors Fund 11
Hartford Life Insurance Group Company Annuity Contract 55
Society National Bank MGD GIC Fund 104
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated October 6, 1992, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the employees are not taxable to the participants
until distributions from the Plan are made. The Plan Administrator believes
that the Plan, as amended and as currently operating, is in compliance with
all applicable provisions of the Internal Revenue Code.
5. TERMINATION OF THE PLAN:
------------------------
The Company reserves the right to terminate its participation in the Plan as
of any specified current or future date.
Until the assets held in the Trust have been fully distributed, the Trustee
shall continue to possess all powers with which it was empowered by the Trust
Agreement and shall have all such other powers as are necessary or
appropriate to the completion of such distribution.
Upon termination of the Plan, plan assets will not be insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974. In addition, termination of
the Plan must be approved by the Internal Revenue Service.
<PAGE> 12
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
<TABLE>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1995
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
--------- --------- ---------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock 572 $ 14,705 $ 11,726
Boatmen's Employee Benefit Short-Term Fund $ 304 304 304
--------- ---------
15,009 12,030
--------- ---------
MUTUAL FUND:
American Balanced Fund 7.733 118 109
Washington Mutual Investors Fund 479.661 8,868 10,538
Boatmen's Employee Benefit Short-Term Fund $ 414 414 414
--------- ---------
9,400 11,061
--------- ---------
INTEREST INCOME FUND:
Hartford Life Insurance Company Group Annuity Contract $ 54,441 54,441 54,441
Society National Bank MGD GIC Fund $ 101,744 101,744 101,744
Boatmen's Employee Benefit Short-Term Fund $ 11,932 11,932 11,932
Loans to participants, interest ranging from 6.5% to 9.5% $ 5,068 5,068 5,068
--------- ---------
173,185 173,185
--------- ---------
Total investments $ 197,594 $ 196,276
========= =========
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
<TABLE>
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Purchases Sales
------------------------ ----------------------------------------------
Number of Purchase Number of Sales Cost of Gain/
Description of Asset Transactions Price Transactions Price Assets (Loss)
-------------------- ------------ -------- ------------ --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Angelica Corporation
Common Stock 17 $ 6,732 3 $ 11,589 $ 12,639 $(1,050)
Washington Mutual Investors
Fund 19 5,445 3 8,491 7,284 1,207
Society National Bank MGD
GIC Fund 12 54,017 8 63,656 63,656 -
Boatmen's Employee Benefit
Short-Term Fund 130 199,862 74 192,329 192,329 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 14
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report on The Angelica Corporation Missouri Plants 401(k) Plan
financial statements included in this Form 11-K, into the Corporation's
previously filed Registration Statement on Form S-8 File No. 33-45410.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 23, 1996
-14-
<PAGE> 1
Exhibit 99.5
Exhibit to Annual Report
on Form 10-K of
Angelica Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 11-K
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
------------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from --------------to-------------
Commission file number 1-5674
--------------------------------------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
ANGELICA CORPORATION
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
("PAYSOP PLAN")
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ANGELICA CORPORATION
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
-1-
<PAGE> 2
Financial Statements and Exhibits.
- ---------------------------------
(a) Financial Statements. Pages of this
-------------------- --------------
Form 11-K
---------
Report of Independent Public Accountants 5
Statement of Net Assets Available for 6
Plan Benefits - December 31, 1995 and
December 31, 1994
Statement of Changes in Net Assets 7
Available for Plan Benefits - Fiscal
Year ended December 31, 1995
Notes to Financial Statements 8-10
Schedule I 11
Schedule II 12
(b) Exhibits.
--------
23. Consent of Independent Public Accountants.
-2-
<PAGE> 3
THE ANGELICA CORPORATION
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
----------------------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits--December 31, 1995 and
1994
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1995
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
SUPPLEMENTAL SCHEDULES SUPPORTING FINANCIAL STATEMENTS:
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes--December 31, 1995
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1995
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Angelica Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of The Angelica Corporation Tax Credit Employee Stock Ownership
Plan (the Plan) as of December 31, 1995 and 1994, and the related statement
of changes in net assets available for plan benefits for the year ended
December 31, 1995. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1995 and 1994, and the changes in net assets available for
plan benefits for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed
in the accompanying table of contents, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosures under the
Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Arthur Andersen LLP
St. Louis, Missouri,
April 2, 1996
<PAGE> 6
THE ANGELICA CORPORATION
------------------------
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
----------------------------------------
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
----------------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
<CAPTION>
1995 1994
---- ----
ASSETS
------
<C> <C> <C>
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ - $ 40,830
Boatmen's Employee Benefit Short-Term Fund - 2,173
----- --------
- 43,003
OTHER ASSETS:
Interest and dividends receivable 24 577
----- --------
Total assets 24 43,580
<CAPTION>
LIABILITIES
-----------
<C> <C> <C>
OTHER PAYABLE 24 -
----- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ - $ 43,580
===== ========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> 7
THE ANGELICA CORPORATION
------------------------
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------------------
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<S> <C>
ADDITIONS:
Interest income $ 119
Dividend income 216
Net realized loss on sale of investments (4,193)
----------
(3,858)
DEDUCTION- Participant withdrawals 39,722
----------
Net decrease (43,580)
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF YEAR 43,580
----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF YEAR $ -
==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
THE ANGELICA CORPORATION
------------------------
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
----------------------------------------
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1995 AND 1994
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Angelica Corporation Tax Credit Employee
Stock Ownership Plan (the Plan) is provided for general information purposes
only. More complete information regarding the Plan's provisions may be found
in the plan document.
General
- -------
The Plan was adopted by the Board of Directors of Angelica Corporation (the
Company) as a fund within The Angelica Corporation Retirement Savings Plan
(the RSP) on February 1, 1984. The RSP was amended and restated on January
27, 1985. The RSP's purpose was to provide participants with a retirement
benefit so as to provide supplementary retirement income and a measure of
economic security.
Under the employee stock ownership arrangement established by the RSP, the
Company contributed cash equal to that percentage of the total annual
compensation to all participants and all other employees eligible to
participate in the RSP which was permitted under Section 41 of the Internal
Revenue Code as a credit against its income tax. As a result of the Tax
Reform Act of 1986, however, the Company discontinued this contribution as of
January 31, 1987. This cash was used by the Trustee only to acquire common
stock of the Company. The common stock so acquired was then allocated on a
per capita basis among the accounts of all eligible employees, whether or not
they had elected to make salary deferrals under the RSP. The common stock
was held in a separate fund, the PAYSOP fund, within the RSP. Upon
discontinuance of the Company contribution, no more participants were allowed
into the PAYSOP fund, and the only activity was payouts and rollovers out of
the PAYSOP fund.
As of January 1, 1994, the Company transferred the PAYSOP fund from the RSP
to its own separate plan, the Plan. The net assets remaining in the Plan as
of December 31, 1994, represent participants' shares which were not paid out
or rolled over into another plan as of year-end. See Note 5 for further
discussion of termination of the Plan. During the year ended December 31,
1995, all of the remaining shares were paid out or rolled over into another
plan. A receivable and a corresponding payable to the participants exist,
representing the December 15, 1995, Angelica Corporation common stock
dividend declaration, which was paid to the participants on January 1, 1996.
Thus, as of December 31, 1995, net assets available for plan benefits are
zero.
The Company is the Plan Administrator and the assets of the Plan are held in
trust by Boatmen's Trust Company (the Trustee).
Eligible Participants
- ---------------------
The participating employers in the Plan are the Company and its subsidiaries.
All full-time employees who are residents of the United States and who have
either (i) completed one year of service with the Company and are age 21 or
older or (ii) completed three years of service, were eligible to participate
in the Plan prior to its termination.
Contributions
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No contributions are currently allowed to be made into the Plan.
<PAGE> 9
- 2 -
Vesting
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The Company's tax credit contribution became fully vested and nonforfeitable
when the contribution was allocated to the participants' accounts upon
contribution by the Company.
Benefits
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Prior to termination, participants were entitled to receive the balance of
their accounts upon death, total disability, retirement or termination of
employment, or upon request after reaching age 59-1/2. As of December 31,
1995 and 1994, the Plan had $-0- and $16,712, respectively, in net assets
available for plan benefits that had been requested to be paid to terminated
participants.
There were -0- and 125 participants with an account balance in the PAYSOP
fund at December 31, 1995 and 1994, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are maintained on an accrual basis. The
Plan's investments are stated at fair value, as determined by the Trustee,
based upon publicly stated price information. The "average cost" method is
used to determine the cost of securities sold.
Administrative Expenses
- -----------------------
Costs of administering the Plan are generally borne by the Company and are
not charged to the Plan.
Gains and Losses on Sale of Investments
- ---------------------------------------
In compliance with reporting regulations of the Department of Labor, the Plan
calculates the net realized gains and losses on investments sold or
distributed and unrealized appreciation and depreciation of investments based
on the market value of the assets at the beginning of the plan year or at the
time of purchase during the year.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
As of December 31, 1995, there were no remaining investments within the Plan.
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1994, are as follows (in thousands):
<TABLE>
<S> <C>
Angelica Corporation Common Stock $41
Boatmen's Employee Benefit Short-Term Fund 2
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated August 31, 1994, from
the Internal Revenue Service stating that the Plan qualifies under the
Internal Revenue Code; as such, the Plan is exempt from federal income tax,
and amounts contributed by the employer are not taxable to the participants
until distributions from the Plan are made. The Plan Administrator believes
that the Plan, as amended and as currently operating, is in compliance with
all applicable provisions of the Internal Revenue Code.
<PAGE> 10
- 3 -
5. TERMINATION OF THE PLAN:
------------------------
As discussed in Note 1, as of January 1, 1994, all funds of the Plan were
transferred from the RSP into the Plan. The Company informed the
participants that all stock of the Plan would be distributed via cash or
shares. All participants were informed as to their different distribution
options and the related tax effects of each option. As of December 31, 1994,
the net assets in the Plan represent shares belonging to employees who had
not yet made a distribution election. As of December 31, 1995, all shares
have been distributed and thus there are no remaining net assets at year-end.
The Company received a determination letter dated August 31, 1994, from the
Internal Revenue Service approving the termination.
Until the assets held in the Trust are fully distributed, the Trustee
continues to possess all powers with which it was empowered by the Trust
Agreement, and has all such other powers as are necessary or appropriate to
the completion of such distribution.
Upon termination of the Plan, plan assets were not insured by the Pension
Benefit Guaranty Corporation as the Plan is not covered by Title IV of the
Employee Retirement Income Security Act of 1974.
<PAGE> 11
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
----------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1995
-----------------
There are no investments at December 31, 1995.
The accompanying notes are an integral part of this schedule.
<PAGE> 12
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN
----------------------------------------
<TABLE>
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<CAPTION>
Purchases Sales
--------------------------- -------------------------------------------------------
Number of Purchase Number of Sales Cost of Net
Description of Asset Transactions Price Transactions Price Assets Loss
-------------------- ------------ -------- ------------ ----- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Angelica Corporation Common
Stock - $ - 9 $26,151 $29,006 $2,855
Boatmen's Employee Benefit
Short-Term Fund 41 24,269 17 26,441 26,441 -
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
Exhibit 23
of 11-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report on The Angelica Corporation Tax Credit Employee Stock Ownership
Plan ("PAYSOP Plan") financial statements included in this Form 11-K, into
the Corporation's previously filed Registration Statement on Form S-8 File
No. 33-5524.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 23, 1996
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