<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 31, 1998
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.
$209,261,154 April 7, 1998
- ------------------------- ----------------------------
Value Date of Valuation
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of April 7, 1998.
Common Stock, $1.00 par value, 9,194,581 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
[FN]
1) Portions of the Annual Report to Shareholders for year ended 1/31/98 are
incorporated in Parts I, II & IV; 2) Portions of the Proxy Statement dated
4/16/98 are incorporated in Part III.
<PAGE> 2
PART I
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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, Manufacturing and Marketing and Retail Sales. Information about
the Company's industry segments appears on page 26 of the Company's Annual
Report to Shareholders for the year ended January 31, 1998 (hereinafter
"Annual Report") 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 31, 1998.
Textile Services
- ----------------
This segment has laundry plants generally in or near various major
metropolitan areas in the United States principally providing textile rental
and laundry services for health care institutions, presently servicing
approximately 1,000 institutions with approximately 161,000 beds. This
segment also provides general linen services in selected areas, principally
to hotels, 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 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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<PAGE> 3
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 one of the leading
suppliers of garments to hospitals, hotels and motels, food service
establishments, and 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 shoes
primarily for nurses and other health care professionals through a nationwide
chain of 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 2,000 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 some 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
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.
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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 9,400 persons (including approximately 830
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 26
of the Company's Annual Report to Shareholders for the year ended January 31,
1998.
Item 2. Properties
- -------------------
A substantial portion of the real estate utilized by the Company is leased.
Real estate which is owned by the Company is approximately 50% of the net
book value of all fixed assets. Capitalized leases, primarily utilized by
the Manufacturing and Marketing segment, represent approximately 0.4% of the
net book value of all fixed assets at January 31, 1998. There is no
individual parcel of real estate owned or leased which is of material
significance to the Company's total assets. No difficulty in renewing leases
which expire in the near future is anticipated by the Company. 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.
As of January 31, 1998, 31 laundries, both owned and leased, plus warehouse
facilities located in 14 states were used in the Textile Services segment.
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.
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<PAGE> 5
The Company's real estate, both owned and leased, which is used in its
Manufacturing and Marketing segment, at January 31, 1998 was comprised of 16
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. The manufacturing
facilities are normally fully utilized and operate generally on a one-shift
basis.
As of January 31, 1998 there were 298 retail specialty stores, located in 36
states, used in the Retail Sales segment. All retail store premises are leased.
In connection with the restructuring plan adopted in October, 1997, the
Company is in the process of closing certain of its laundries in the Textile
Services segment and transferring the volumes being processed in those plants
to other laundries operated by the Company, thereby achieving economies of
scale and greater operating efficiencies. Also as a part of the
restructuring plan, certain of the Manufacturing and Marketing segment's
domestic sewing plants are being closed in order to increase the amount of
goods manufactured non-domestically. In addition, in November, 1997, the
Company sold its Textile Services facility in Las Vegas, Nevada, thus exiting
from the casino laundry market.
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 31, 1998.
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>
Theodore M. Armstrong Senior Vice President- 1986 58
Finance and Administration
and Chief Financial Officer
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<PAGE> 6
Don W. Hubble<F3> Chairman, President and Chief 1998 58
Executive Officer
Jill Witter Vice President, General Counsel 1985 43
and Secretary
L. Linden Mann Controller and Assistant 1978 58
Secretary
Thomas M. Degnan Treasurer 1993 42
Michael E. Burnham Vice President; President, 1993 46
Life Uniform and Shoe Shops,
subsidiaries of Angelica
Corporation
Alan D. Wilson<F4> Vice President; President, 1995 55
Angelica Textile
Services, subsidiaries of
Angelica Corporation
Lawrence J. Young<F5> Executive Vice President; 1975 53
President, Angelica Image
Apparel, a division 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> Don W. Hubble has been Chairman, President and Chief Executive Officer
since January 1, 1998. Prior to that, he served as President and
Chief Operating Officer of National Service Industries, Inc. from
1994 to October, 1996, and as Executive Vice President and Chief
Operating Officer from 1993 to 1994.
<F4> Alan D. Wilson has been a Vice President of the Company and President
of Angelica Textile Services since March 15, 1995.
<F5> Lawrence J. Young has been President of Angelica Image Apparel, a
division of Angelica Corporation, since March 12, 1996, and Executive
Vice President of the Company since August 1, 1997. He also served
as Chairman, President and Chief Executive Officer of the Company
from 1990 until July 31, 1997.
</TABLE>
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<PAGE> 7
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.
-6-
<PAGE> 8
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 17 of the Company's Annual Report and is incorporated
herein by reference. The number of shareholders of record was 1,408 at April
7, 1998. 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-6 Years" on page 29 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 16 and 17 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.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The information required by this item appears on pages 18 through 27 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> 9
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
"Board of Directors" and "Board Committees" on pages 5 and 6 of the
Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on May 27, 1998, (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 "Board
Compensation" on pages 6 and 7, "Summary Compensation Table" on page 12,
"Employment Contracts and Termination of Employment and Change-In-Control
Arrangements" on pages 13 through 15,"Option Grants in Last Fiscal Year" on
page 16,"Retirement Plans" on pages 15 and 16, and "Fiscal Year-End Option
Values" on page 17, 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 Stock Ownership" and "Management
Stock Ownership" on pages 7 and 8 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> 10
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 31, 1998:
(i) Consolidated Statements of Income - 18
Years ended January 31, 1998,
January 25, l997, and January 27, 1996
(ii) Consolidated Balance Sheets - January 19
31, 1998 and January 25, 1997
(iii) Consolidated Statements of Share- 20
holders' Equity - Years ended
January 31, 1998, January 25, 1997,
and January 27, 1996
(iv) Consolidated Statements of Cash Flows- 21
Years ended January 31, 1998, January 25,
1997, and January 27, 1996
(v) Notes to Consolidated Financial State- 22-27
ments
(vi) Report of Independent Public 28
Accountants
</TABLE>
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<PAGE> 11
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 27 of the Company's
Annual Report.
(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 31, 1998
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 14-19 hereof for a list of all
management contracts, compensatory plans and arrangements
required by this item (Exhibit Nos. 10.1 through 10.36) 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 31, 1998.
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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/ Don W. Hubble
-----------------------------------
Don W. Hubble
Chairman, President and Chief
Executive Officer (Principal
Executive Officer)
Date: April 28, 1998
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)
and Chief Financial Officer
(Principal Financial Officer)
David A. Abrahamson <F*> Susan S. Elliott <F*>
- ---------------------------------- ---------------------------------------
(David A. Abrahamson) (Susan S. Elliott)
Director Director
Earle H. Harbison, Jr. <F*> Leslie F. Loewe <F*>
- ---------------------------------- ---------------------------------------
(Earle H. Harbison, Jr.) (Leslie F. Loewe)
Director Director
Charles W. Mueller <F*> William A. Peck <F*>
- ---------------------------------- ---------------------------------------
(Charles W. Mueller) (William A. Peck)
Director Director
William P. Stiritz <F*> H. Edwin Trusheim <F*>
- ---------------------------------- ---------------------------------------
(William P. Stiritz) (H. Edwin Trusheim)
Director Director
L. J. Young <F*>
- ----------------------------------
(L. J. Young)
Director
By his signature below, Don W. Hubble 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/ Don W. Hubble
-------------------------------------
Don W. Hubble, as attorney-in-fact
Date: April 28, 1998
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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
17, 1998. 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 17, 1998
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<PAGE> 14
<TABLE>
<CAPTION>
Schedule II
ANGELICA CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED JANUARY 31, 1998
(In Thousands)
------------------------------------------------------------
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
YEAR ENDED JANUARY 31, 1998
---------------------------
$2,645 $1,511 $1,646 $2,510
====== ====== ====== ======
YEAR ENDED JANUARY 25, 1997
---------------------------
$2,687 $1,417 $1,459 $2,645
====== ====== ====== ======
YEAR ENDED JANUARY 27, 1996
---------------------------
$2,699 $1,331 $1,343 $2,687
====== ====== ====== ======
<FN>
<Fa> Doubtful accounts written off against reserve provided, net of
recoveries.
</TABLE>
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<PAGE> 15
EXHIBIT INDEX
- -------------
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<FN>
<F*>Asterisk indicates exhibits filed herewith.
<F**>Management contract or compensatory plan incorporated by
reference from the document listed.
<S> <C>
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 February 24, 1998.<F*>
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. Filed as and
incorporated herein by reference to Exhibit 4.5 to the Form 10-K for
the fiscal year ended 1/27/96.
4.6 Term Loan Agreement between Angelica Corporation and The First National
Bank of Boston dated as of October 2, 1995. Filed as and incorporated
hereby by reference to
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<PAGE> 16
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
Exhibit 4.6 to the Form 10-K for the fiscal year ended 1/27/96.
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 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 (filed as Exhibit 10.3 to the Form 10-K
for fiscal year ended 1/30/93 and incorporated herein by reference)
with revised schedule setting out executive officers covered under
such agreements and the "Benefit Multiple" listed for each.<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. The last amendment thereto was filed as Exhibit 10.31 to
Form 10-K for fiscal year ended 1/25/97.<F**>
10.8 Incentive Compensation Plan (restated) - Form 10-K for fiscal year
ended 1/27/90, Exhibit 19.11.<F**>
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<PAGE> 17
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
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. The
last amendment thereto was filed as Exhibit 10.34 to Form 10-K for
fiscal year ended 1/25/97.<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**>
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. The last
amendment thereto was filed as Exhibit 10.25 to Form 10-K for the
fiscal year ended 1/28/95<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. The last
amendment thereto was filed as Exhibit 10.23 to Form 10-K for the
fiscal year ended 1/27/96.<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. The last
amendment
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<PAGE> 18
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
thereto was filed as Exhibit 10.23 to Form 10-Q for fiscal quarter
ended 7/27/96.<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 - Form 10-K for fiscal year ended 1/27/96, Exhibit 10.20.<F**>
10.21 Form of Stock Option Agreement under the Angelica Corporation 1994
Performance Plan (filed as Exhibit 10.21 to Form 10-K for fiscal year
ended 1/27/96 and incorporated herein by reference) with four of the
Company's executive officers, together with schedule identifying the
officers and setting forth the material details in which the
agreements differ from the form of agreement that is filed - Form
10-K for fiscal year ended 1/25/97, Exhibit 10.21.<F**>
10.22 Form of Indemnification Agreement between the Company and each of its
directors and executive officers, together with a schedule
identifying the directors and executive officers executing such
agreements.<F*>
10.23 Employment Agreement between the Company and Lawrence J. Young, dated
September 29, 1997 - Form 10-Q for fiscal quarter ended 10/25/97,
Exhibit 10.23.<F**>
10.24 Employment Agreement between the Company and Theodore M. Armstrong,
dated November 27, 1996 - Form 10-K for fiscal year ended 1/25/97,
Exhibit 10.24.<F**>
10.25 Employment Agreement between the Company and Jill Witter, dated
November 27, 1996 - Form 10-K for fiscal year ended 1/25/97, Exhibit
10.25.<F**>
10.26 Employment Agreement between the Company and L. Linden Mann, dated
November 27, 1996 - Form 10-K for fiscal year ended 1/25/97, Exhibit
10.26.<F**>
10.27 Employment Agreement between the Company and Alan D. Wilson, dated
April 2, 1997 - Form 10-K for fiscal year ended 1/25/97, Exhibit
10.27.<F**>
-17-
<PAGE> 19
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
10.28 Employment Agreement between the Company and Michael E. Burnham, dated
April 8, 1997 - Form 10-K for fiscal year ended 1/25/97, Exhibit
10.28.<F**>
10.29 Employment Agreement between the Company and Thomas M. Degnan, dated
May 1, 1997 - Form 10-Q for fiscal quarter ended 4/26/97, Exhibit
10.29.<F**>
10.30 Employment Agreement between the Company and Don W. Hubble, dated
December 12, 1997.<F*>
10.31 Retirement Benefit Agreement between the Company and Don W. Hubble
dated January 1, 1998.<F*>
10.32 Non-Qualified Stock Option Agreement between the Company and Don W.
Hubble dated January 2, 1998.<F*>
10.33 Description of restricted stock granted to Don W. Hubble effective
January 2, 1998.<F*>
10.34 Consulting Agreement between the Company and L. F. Loewe, dated
February 1, 1998.<F*>
10.35 First Amendment to the Angelica Corporation 1994 Non-Employee Directors
Stock Plan, dated January 27, 1998.<F*>
10.36 Fifteenth Amendment to Angelica Corporation Retirement Savings Plan,
dated August 26, 1997.<F*>
13 Certain portions of the Annual Report to Shareholders for the fiscal
year ended January 31, 1998, 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*>
-18-
<PAGE> 20
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
99.4 Annual Report on Form 11-K for the Angelica Corporation Missouri Plants
401(k) 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.
-19-
<PAGE> 1
EXHIBIT 3.2
ANGELICA CORPORATION
INCORPORATED UNDER THE LAWS OF MISSOURI
BY-LAWS
REVISED FEBRUARY 28, 1989
Amended: July 25, 1989
September 26, 1989
August 25, 1992
January 26, 1993
March 30, 1993
September 28, 1993
February 22, 1994
May 24, 1994
November 26, 1996
February 25, 1997
November 25, 1997
January 27, 1998
February 24, 1998
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
<S> <C>
ARTICLE I: LOCATION AND OFFICES
Section 1:1 Principal Office 1
Section 1:2 Other Offices 1
Section 1:3 Registered Office 1
ARTICLE II: SHAREHOLDERS
Section 2:1 Annual Meeting 1
Section 2:2 Special Meetings 1
Section 2:3 Place of Meetings 2
Section 2:4 Notice of Meetings 2
Section 2:5 Quorum 2
Section 2:6 Organization 3
Section 2:7 Voting 3
Section 2:8 Election of Directors 3
Section 2:9 Persons Who May Vote Certain Shares 4
Section 2:10 List of Shareholders Kept on File
Before Meeting 4
Section 2:11 Proxy 4
Section 2:12 Inspectors of Election 4
Section 2:13 Notice of Shareholder Nominees 5
Section 2:14 Procedures for Submission of Shareholder
Proposals at Annual Meeting 6
Section 2:15 Conduct of Annual Meeting 7
ARTICLE III: DIRECTORS
Section 3:1 General Powers 8
Section 3:2 Number and Qualification 8
Section 3:3 Term of Office 8
Section 3:4 Removal of Directors 9
Section 3:5 Vacancies 9
Section 3:6 Place of Meetings 9
Section 3:7 Organization Meetings 10
Section 3:8 Regular Meetings 10
Section 3:9 Special Meetings 10
Section 3:10 Quorum 10
Section 3:11 Compensation 11
Section 3:12 Actions of Directors in Lieu of Meeting 11
ARTICLE IV: COMMITTEES
Section 4:1 Executive Committee 11
Section 4:2 Meetings of Executive Committee 11
Section 4:3 Emergency Management Committee 12
Section 4:4 Other Committees 12
<PAGE> 3
<CAPTION>
PAGE
<S> <C>
ARTICLE V: OFFICERS
Section 5:1 Officers 13
Section 5:2 Elected Officers 13
Section 5:3 Functional Responsibilities 15
Section 5:4 Absence, Disability or Death - Elected
Officers 15
Section 5:5 Term of Office and Compensation 16
Section 5:6 Removal 16
Section 5:7 Vacancies 16
Section 5:8 Bonding 16
Section 5:9 Execution of Instruments 16
ARTICLE VI: CAPITAL STOCK AND DIVIDENDS
Section 6:1 Certificates of Shares 17
Section 6:2 Numbers and Data on Certificates 17
Section 6:3 Cancellation of Certificates 18
Section 6:4 Registration and Change of Registration 18
Section 6:5 Regulations for Transfer 18
Section 6:6 Lost, Stolen, Destroyed or
Mutilated Certificates 19
Section 6:7 Closing of Transfer Books and
Record Dates 19
Section 6:8 Dividends 20
ARTICLE VII: MISCELLANEOUS
Section 7:1 Corporate Seal 20
Section 7:2 Resignations 20
Section 7:3 Waiver 20
Section 7:4 Amendments 20
Section 7:5 Books and Records 21
Section 7:6 Severability 21
ARTICLE VIII: INDEMNIFICATION OF DIRECTORS, OFFICERS
AND OTHERS; INSURANCE
Section 8:1 Liabilities Covered 21
Section 8:2 Procedure for Indemnification 22
Section 8:3 Advance Payment of Expenses 23
Section 8:4 Extent of Rights Hereunder 23
Section 8:5 Purchase of Insurance 23
Section 8:6 Indemnification Agreements 24
</TABLE>
<PAGE> 4
BY-LAWS OF
ANGELICA CORPORATION
--------------------
ARTICLE I: LOCATION AND OFFICES
--------- --------------------
Principal Office.
- ----------------
Section 1:1. The principal office of the Company shall be at such place as
the Board of Directors may from time to time determine, but until a change is
effected such principal office shall be at 424 South Woods Mill Road,
Chesterfield, Missouri 63017-3406.
Other Offices.
- -------------
Section 1:2. The Company may also have other offices, in such places
(within or without the State of Missouri) as the Board of Directors may from
time to time determine.
Registered Office.
- -----------------
Section 1:3. The registered office of the Company shall be maintained in
the State of Missouri, and may be, but need not be, identical with the
principal office. The registered office may be changed from time to time by
action of the Board of Directors and upon appropriate notice to the Secretary
of State.
ARTICLE II: SHAREHOLDERS
---------- ------------
Annual Meeting.
- --------------
Section 2:1. The annual meeting of the shareholders of the Company, for
the purpose of electing Directors and for the transaction of such other
business as properly may be brought before the meeting shall be held at such
date and time as shall be set by the Board of Directors annually at the
Organizational Meeting of the Board of Directors.
Special Meetings.
- ----------------
Section 2:2. Special meetings of the shareholders may be called by the
Chief Executive Officer, by the Board of Directors, or by, the holders of not
less than 50% of all of the outstanding shares entitled to vote at such
meeting. At the written request of a majority of the members of the Board of
Directors or of the
1
<PAGE> 5
holders of not less than 50% of all of the outstanding shares entitled to
vote at such meeting, the Chairman of the Board, the President, or the
Secretary shall issue a call for a special meeting of the shareholders.
Place of Meetings.
- -----------------
Section 2:3. All meetings of the shareholders shall be held at the
principal office of the Company, or at such other place, within or without
the State of Missouri, as stated in the notice of the meeting.
Notice of Meetings.
- ------------------
Section 2:4. Unless waived, as provided in Section 7:3 of these By-Laws,
written or printed notice of each meeting of the shareholders stating the
place, day and hour of the meeting, and, in the case of a special meeting or
where otherwise required by law, the purpose or purposes for which the
meeting is called, shall, by or at the direction of the officer or other
person calling the meeting, be delivered or given to each shareholder of
record entitled to vote at such meeting, not less than ten (10) nor more than
fifty (50) days (or such greater period as then provided by law) before the
date of the meeting, either personally or by mail. Any notice of a
shareholders' meeting sent by mail shall be deemed to be delivered when
deposited in the United States mail, with postage thereon prepaid, addressed
to the shareholder at his address as it appears on the records of the
Company.
Quorum.
- ------
Section 2:5. A majority of the outstanding shares entitled at the time to
vote thereat, when represented either in person or by proxy at any meeting of
the shareholders, shall constitute a quorum for the transaction of business,
except as otherwise provided by law or the Articles of Incorporation; but in
the absence of such a quorum, a majority of the shares represented at the
meeting shall have the right successively to adjourn the meeting to a
specified date not longer than ninety days after such adjournment, by action
by a majority of the shares represented at such meeting and without the need
to give notice to shareholders not present at the meeting. At such adjourned
meeting, at which a quorum shall attend, all business may be transacted which
might have been transacted at the original meeting; provided, that at such
adjourned meeting no person who would not have been entitled to vote at the
original meeting shall be permitted to vote. Every decision by a majority of
such quorum shall be valid as an act of the Company unless a larger vote is
required by law or by the Articles of Incorporation.
2
<PAGE> 6
Organization.
- ------------
Section 2:6. The Chairman of the Board or in his absence, the
Vice-Chairman of the Board, if any, or in his absence, the President, or in
his absence, a Vice-President (in the order of priority as may be prescribed
by Resolution of the Board of Directors), or in the absence of any
Vice-President, the Secretary, or in their absence any other officer (in the
order of seniority of age) shall call meetings of shareholders to order and
act as chairman thereof. In case none of the officers is present, the
shareholders present may elect a chairman of such meeting from among their
members. The Secretary of the Company shall act as secretary of all meetings
of the shareholders. In his absence, or in the event he shall be acting as
chairman, the chairman may appoint any person to act as secretary.
Voting.
- ------
Section 2:7.1. Every shareholder entitled to vote at a meeting of
shareholders upon a particular question, pursuant to law or the Articles of
Incorporation, shall have one vote for each share of stock so entitled to
vote standing in his name on the books of the Company at the time fixed by
law or pursuant to these By-Laws for the determination of the right to vote
thereat.
Section 2:7.2. The date for determining the shareholders entitled to vote
at a meeting of shareholders shall be determined pursuant to Section 6:7 if
action thereunder shall have been taken to establish the controlling date;
otherwise, only the shareholders who are shareholders of record at the close
of business on the twentieth day preceding the date of the meeting shall be
entitled to notice of and vote at the meeting and any adjournment thereof,
with the exception that if prior to the meeting, written waivers of notice of
the meeting are signed and delivered to the Company by all shareholders of
record at the time the meeting is convened, only the shareholders who are
shareholders of record at the time the meeting is convened shall be entitled
to vote at the meeting and any adjournment thereof.
Election of Directors.
- ---------------------
Section 2:8. In all elections for Directors of the Company, each
shareholder entitled to vote for the election of Directors shall be entitled
to one vote in person or by proxy for each share having voting power. In
each election for Directors, no shareholder shall be entitled to vote
cumulatively or to cumulate his votes.
3
<PAGE> 7
Persons Who May Vote Certain Shares.
- -----------------------------------
Section 2:9. Shares standing in the name of another corporation, domestic
or foreign, may be voted by such officer, agent or proxy as the By-Laws of
such corporation may prescribe or, in the absence of such provision, as the
Board of Directors of such corporation may determine. Shares standing in the
name of a deceased person may be voted by his administrator or executor,
either in person or by proxy, and shares standing in the name of a guardian,
custodian, curator, or trustee, in whose name such shares are registered, may
be voted by such fiduciary, either in person or by proxy. A shareholder
whose shares are pledged shall be entitled to vote such shares until such
shares have been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
List of Shareholders Kept on File Before Meeting.
- ------------------------------------------------
Section 2:10. At least ten days before each meeting of the shareholders,
the Secretary, or in the event of his absence or disability, an Assistant
Secretary, shall prepare a complete list of shareholders entitled to vote at
such meeting, arranged in alphabetical order with the address of and the
number of shares held by each, which list, for a period of ten days prior to
such meeting, shall be kept on file at the registered office of the Company
and shall be subject to inspection by any shareholder at any time during
usual business hours. Such list shall also be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original share ledger
or transfer book or a duplicate thereof kept in Missouri, shall be prima
facie evidence as to who are the shareholders entitled to examine such list
or share ledger or transfer book or to vote at any meeting of the
shareholders. Failure to comply with the requirements of this section shall
not affect the validity of any action taken at such meeting.
Proxy.
- -----
Section 2:11. A shareholder may vote either in person or by proxy executed
in writing by the shareholder or his duly authorized attorney-in-fact. No
proxy shall be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy.
Inspectors of Election.
- ----------------------
Section 2:12. At each meeting of the shareholders the polls shall be
opened and closed, the proxies and ballots shall be
4
<PAGE> 8
received and be taken in charge, and all questions touching the qualification
of voters and validity of proxies and the acceptance or rejection of votes
shall be decided by the chairman and secretary of the meeting as judges of
election; provided, however, that upon request of any shareholder, but not
otherwise, the chairman of the meeting shall appoint not less than two
persons who are not Directors as inspectors to receive and canvass the votes
given at such meeting and certify the result to him. Any inspector, before
he enters on the duties of his office, shall take and subscribe the following
oath, or any other oath as may be prescribed by law for such purpose, before
any officer authorized by law to administer oaths: "I do solemnly swear that
I will execute the duties of an inspector of the election now being held with
strict impartiality, and according to the best of my ability." In all cases
where the right to vote upon any share or shares shall be questioned, it
shall be the duty of the inspectors, if any, or the persons conducting the
vote, to examine the transfer books of the Company as evidence of shares
held, and all shares entitled to vote that may appear standing thereon in the
name of any person or persons shall be voted upon by such person or persons,
either in person or by proxy.
Notice of Shareholder Nominees.
- ------------------------------
Section 2:13. Only persons who are nominated in accordance with the
procedures set forth in this Section 2:13 shall be eligible for election as
Directors of the Company. Nominations of persons for election to the Board
of Directors of the Company may be made at a meeting of shareholders (a) by
or at the direction of the Board of Directors or (b) by any shareholder of
the Company entitled to vote for the election of Directors at such meeting
who complies with the procedures set forth in this Section 2:13. All
nominations by shareholders shall be made pursuant to timely notice in proper
written form to the Secretary of the Company. To be timely, a shareholder's
notice shall be delivered to or mailed and received at the principal
executive offices of the Company not less than 30 days nor more than 60 days
prior to the meeting; provided, however, that in the event that less than 40
days' notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the 10th day following the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made. To be in proper written form, such shareholder's notice
shall set forth in writing (a) as to each person whom the shareholder
proposes to nominate for election or re-election as a Director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required,
in
5
<PAGE> 9
each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended, including, without limitation, such person's written
consent to being named in the proxy statement as a nominee and to serving as
a Director if elected; and (b) as to the shareholder giving the notice (i)
the name and address, as they appear on the Company's books, of such
shareholder and (ii) the class and number of shares of the Company which are
beneficially owned by such shareholder. At the request of the Board of
Directors, any person nominated by the Board of Directors for election as
Director shall furnish to the Secretary of the Company that information
required to be set forth in a shareholder's notice of nomination which
pertains to the nominee. In the event that a shareholder seeks to nominate
one or more Directors, the Secretary shall appoint two inspectors, who shall
not be affiliated with the Company, to determine whether a shareholder has
complied with this Section 2:13. If the inspectors shall determine that a
shareholder has not complied with this Section 2:13, the inspectors shall
direct the chairman of the meeting to declare to the meeting that the
nomination was not made in accordance with the procedures prescribed by the
By-Laws of the Company, and the chairman shall so declare to the meeting and
the defective nomination shall be disregarded.
Procedures for Submission of Shareholder Proposals at Annual Meeting.
- --------------------------------------------------------------------
Section 2:14. At any annual meeting of the shareholders of the Company,
only such business shall be conducted as shall have been brought before the
meeting (i) by or at the direction of the Board of Directors or (ii) by any
shareholder of the Company who complies with the procedures set forth in this
Section 2:14. For business properly to be brought before an annual meeting
by a shareholder, the shareholder must have given timely notice thereof in
proper written form to the Secretary of the Company. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than 30 days nor more
than 60 days prior to the meeting; provided, however, that in the event that
less than 40 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. To be in proper written form, a
shareholder's notice to the Secretary shall set forth in writing as to each
matter the shareholder proposes to bring before the annual meeting (i) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting,
(ii)
6
<PAGE> 10
the name and address, as they appear on the Company's books, of the
shareholder proposing such business, (iii) the class and number of shares of
the Company which are beneficially owned by the shareholder and (iv) any
material interest of the shareholder in such business. Notwithstanding
anything in the By-Laws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 2:14. The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 2:14,
and, if he should so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be
transacted.
Conduct of Annual Meeting.
- -------------------------
Section 2:15. The date and time of the opening and the closing of the
polls for each matter upon which the shareholders will vote at a meeting
shall be announced at the meeting by the person presiding over the meeting.
The Board of Directors of the Company may to the extent not prohibited by law
adopt by resolution such rules and regulations for the conduct of the meeting
of shareholders as it shall deem appropriate. Except to the extent
inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do
all such acts as, in the judgment of such chairman, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures,
whether adopted by the Board of Directors or prescribed by the chairman of
the meeting, may to the extent not prohibited by law include, without
limitation, the following: (i) the establishment of an agenda or order of
business for the meeting; (ii) rules and procedures for maintaining order at
the meeting and the safety of those present; (iii) limitations on attendance
at or participation in the meeting to shareholders of record of the Company,
their duly authorized and constituted proxies or such other persons as the
chairman of the meeting shall determine; (iv) restrictions on entry to the
meeting after the time fixed for the commencement thereof; and (v)
limitations on the time allotted to questions or comments by participants.
Unless, and to the extent, determined by the Board of Directors or the
chairman of the meeting, meetings of shareholders shall not be required to be
held in accordance with the rules of parliamentary procedure.
7
<PAGE> 11
ARTICLE III: DIRECTORS
----------- ---------
General Powers.
- --------------
Section 3:1. The Board of Directors shall control and manage the business
and property of the Company. The Board may exercise all such powers of the
Company and do all lawful acts and things as are not by law, the Articles of
Incorporation, or elsewhere in these By-Laws, directed or required to be
exercised or done by the shareholders or some particular officer of the
Company.
Number and Qualification.
- ------------------------
Section 3:2. The number of Directors to constitute the Board of Directors
shall be 9, effective May 27, 1998. Each change in the number of Directors
(made by amendment to this By-Law) shall be reported to the Secretary of
State of Missouri within thirty calendar days of such change. Directors need
not be shareholders unless the Articles of Incorporation, as amended, shall
require that Directors be shareholders, in which case any Director who shall
cease to be a shareholder of record shall thereby be disqualified and his
office as Director shall thereupon automatically become vacant.
Each Director shall be under the age of 72 years at the time of his
election to the Board. If a Director attains his 72nd birthday prior to the
expiration of his term, he shall serve until the next annual meeting at which
time his office as Director shall thereupon automatically become vacant.
Notwithstanding the above, a majority of the Board of Directors may elect to
waive the age requirement for a Director/Nominee.
Term of Office.
- --------------
Section 3:3. The Board of Directors shall be elected by the shareholders
entitled by law or the Articles of Incorporation to vote for the election of
Directors. The Board of Directors shall be divided into three Groups, with
the terms of office of each Group ending in successive years. Upon
expiration of a Group's initial term, all succeeding terms shall be for a
period of three (3) years, until the next applicable Annual Shareholders
Meeting. Each Director, unless removed, resigned, disqualified, or otherwise
separated from office, shall hold office for the term for which he is elected
or until his successor shall have been elected and qualified.
8
<PAGE> 12
Removal of Directors.
- --------------------
Section 3:4. Directors may be removed at a meeting of shareholders called
expressly for such purpose in the manner provided herein and subject to the
limitations provided by law. The entire Board of Directors may be removed,
with or without cause, by a vote of not less than 75% of all the outstanding
shares entitled to vote at such meeting. Less than the entire Board of
Directors may be removed, with or without cause, by a vote of not less than
75% of all the outstanding shares entitled to vote at such meeting, except in
such case no Director may be removed if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an election of
the class of Directors of which he is a part. Such shareholders meeting
shall be held at the registered office or principal office of the Company in
Missouri or in the city or county in Missouri in which the principal business
office of the Company is located.
Vacancies.
- ---------
Section 3:5. In case of any vacancy in the Board of Directors through
death, resignation, or removal pursuant to the By-Laws or as provided by law,
of one or more of the Directors, a majority of the surviving or remaining
Directors may fill such vacancy or vacancies until the successor or
successors are elected at the next shareholders meeting for the purpose of
serving the remainder of the unexpired term. Unless otherwise provided in
the Articles of Incorporation, vacancies on the Board of Directors resulting
from any increase in the number of Directors to constitute the Board of
Directors may be filled by a majority of Directors then in office, although
less than a quorum, or by a sole remaining Director, until the next election
of Directors by the shareholders of the Company.
Place of Meeting.
- ----------------
Section 3:6. The Board of Directors may hold its meetings at the principal
office of the Company or at such other place or places within or without the
State of Missouri as it may from time to time determine. Members of the
Board of Directors may participate in a meeting of a Board by means of
conference telephone or similar communications equipment whereby all persons
participating in the meeting can hear each other, and participation in a
meeting in this manner shall constitute presence in person at the meeting.
9
<PAGE> 13
Organization Meetings.
- ---------------------
Section 3:7. Organization meetings shall be held on a date set by the
Board of Directors, provided that such date shall be either on the same day
or a date subsequent to the Annual Meeting of Shareholders, and shall be held
at the principal office of the Corporation or at such other place within or
without the State of Missouri, as the Board may deem acceptable. No notice
shall be required for any organization meeting.
Regular Meetings.
- ----------------
Section 3:8. The Board of Directors from time to time, by resolution, may
provide for regular meetings, which may thereafter be held at the time and
place designated, without notice thereof to the Directors; provided, however,
that any Director absent from the meeting at which such resolution was
adopted shall be notified of the adoption thereof not less than 3 days prior
to the first regular meeting to be held pursuant thereto.
Special Meetings.
- ----------------
Section 3:9. Special meetings of the Board of Directors may be called by
the Chairman of the Board, the Vice-Chairman of the Board, if any, the
President, or any two Directors, and shall be held at the time and place
(within or without the State of Missouri) specified in the call. Unless
waived as hereinafter provided, notice of the time, place and purpose of each
special meeting shall be delivered to each Director, either in person or by
mail, postage prepaid and addressed to such Director, either at the most
recent address which he has furnished the Secretary of the Company or at his
last known resident address at least two days before such meeting. If given
by mail, such notice shall be deemed delivered upon deposit in the United
States mail, postage prepaid, and addressed in either manner aforesaid.
Quorum.
- ------
Section 3:10. Except as otherwise provided by law, by the Articles of
Incorporation, or elsewhere in these By-Laws, a majority of the full Board of
Directors shall constitute a quorum for the transaction of business, and the
act of a majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. In the absence of a
quorum, a majority of the Directors present at a meeting, or the Director if
there be only one present, or the Secretary if there be no Director present,
may adjourn the meeting from time to time, not to
10
<PAGE> 14
exceed thirty days until a quorum be had. No notice other than announcement
at the meeting need be given of such adjournment.
Compensation.
- ------------
Section 3:11. A Director may be entitled to receive (a) such
transportation and other expenses incident to his attendance at any meeting
of the Board of Directors or of any committee thereof of which he may be a
member as the Board of Directors from time to time may determine, and (b)
such compensation as the Board of Directors from time to time may determine.
Actions of Directors in Lieu of Meeting.
- ---------------------------------------
Section 3:12. Any action which is required to be or may be taken at a
meeting of the directors may be taken without a meeting if consents in
writing, setting forth the action so taken, are signed by all of the
Directors. The consents shall have the same force and effect as a unanimous
vote of the Directors at a meeting duly held and may be stated as such in any
certificate or document filed pursuant to the provisions of Missouri law.
The Secretary shall file the consents with the minutes of the meetings of the
Board of Directors.
ARTICLE IV: COMMITTEES
----------- ----------
Executive Committee.
- -------------------
Section 4:1. The Board of Directors may, at its discretion and by
resolution adopted by a majority of all the members of the Board of
Directors, designate an Executive Committee to consist of two or more
Directors, one of whom shall be designated by the Board as Chairman of the
Executive Committee. The Board of Directors may delegate to the Executive
Committee any and all authority in the management of the Company otherwise
vested in the Board of Directors. The Board of Directors shall have the
power at any time to expand or limit the authority of, to fill vacancies in,
to change the membership of, or to dissolve the Executive Committee. A
majority of the members of the Executive Committee shall be sufficient to
determine its action unless the Board of Directors shall otherwise provide
for a greater percentage.
Meetings of Executive Committee.
- -------------------------------
Section 4:2. Regular meetings of the Executive Committee may be held
without call or notice at such times and places as the Executive Committee
from time to time may fix. Other meetings of
11
<PAGE> 15
the Executive Committee may be called by any member thereof either by oral,
telegraphic or written notice not later than the day prior to the date set
for such meeting. Such notice shall state the time and place of the meeting
and, if by telegraph or in writing, shall be addressed to each member at his
address as shown by the records of the Secretary of the Company. Any member
may, or upon request by any member, the Secretary shall, give the required
notice calling the meeting. The Executive Committee shall keep a record of
its proceedings, and shall regularly present such records to the Board of
Directors. Members of the Executive Committee or any other Committee
designated by the Board of Directors may participate in a meeting of the
Committee by means of conference telephone or similar communications
equipment whereby all persons participating in the meeting in this manner
shall constitute presence in person at the meeting.
Emergency Management Committee.
- ------------------------------
Section 4:3. The Board of Directors, by resolution of a majority of the
whole Board, may appoint three or more persons to constitute an Emergency
Management Committee or otherwise designate the manner in which the
membership of such Committee shall be determined. To the extent provided in
said resolution, and subject to the provisions of the Articles of
Incorporation and these By-Laws, such Committee shall have and may exercise
all the powers of the board of Directors in the management of the business
and affairs of the Company but only during any period when the Board of
Directors shall be unable to function by reason of vacancies therein caused
by death, resignation or otherwise, and there shall be no Director remaining
and able to fill such vacancies pursuant to Section 3:5 of Article III and
until a Board of Directors shall have been duly constituted. Such Committee
shall, during the time it is authorized to function as provided herein, have
power to call special meetings of stockholders, to elect or appoint officers
to fill vacancies as circumstances may require and to authorize the seal of
the Company to be affixed to all papers which may require it. Such Committee
shall make its own rules of procedure. A majority of the Committee shall
constitute a quorum. Any vacancy in the Committee caused by death,
incapacity, resignation or otherwise may be filled by the remaining members
though less than a quorum and any member so chosen shall serve until a Board
of Directors has been duly constituted.
Other Committees.
- ----------------
Section 4:4. Other Committees may be established from time to time by the
Board of Directors. Such other Committees shall have such purpose(s) and
such power(s), as the Board of Directors by
12
<PAGE> 16
resolution may confer. The Board of Directors or such officer or Committee
as the Board of Directors may designate, shall have the power to appoint
members of such other Committee, to remove any member thereof and to fill any
vacancy therein, and to designate the Chairman of such other Committee.
Unless otherwise provided by the Board of Directors, a majority of the
members of such other Committee shall constitute a quorum, and the acts of a
majority of the members present at a meeting at which a quorum is present
shall be the act of such other Committee.
ARTICLE V. OFFICERS
--------- --------
Section 5:1. The Principal Officers of the Company shall be a Chairman of
the Board, a Vice-Chairman of the Board (if the Board shall choose to elect
one), a Chief Executive Officer, a President, one or more Executive
Vice-Presidents, one or more Vice-Presidents and/or Vice-Presidents of such
designation as the Board shall deem appropriate, a Secretary, a Treasurer,
one or more Controller(s) and such other officer or assistant officers as may
be deemed necessary and elected by the Board of Directors. Each elected
officer shall have all powers and duties usually incident to such elected
office except as modified pursuant to the provisions of Sections 5:2 and 5:3.
Any two or more offices may be held by the same person except that the
offices of Chairman of the Board or of President and the office of the
Secretary may not be held by the same person. Any officer elected by the
Board may be specially designated by the Board with one or more functional
titles.
Elected Officer.
- ---------------
Section 5:2. The general duties of the elected officers shall be as set
forth below:
(a) Chairman of the Board. The Board of Directors shall elect one of
---------------------
its number Chairman of the Board who shall preside at all meetings of the
shareholders and of the Board of Directors at which he may be present. The
Chairman of the Board shall have such other powers and duties as, from time
to time, shall reside in or be assigned said office pursuant to the
provisions of subsection (h) of this Section 5:2 and of Section 5:3.
(b) Vice-Chairman of the Board. The Board of Directors may, in its
--------------------------
discretion, elect one of its number Vice-Chairman of the Board who, in the
absence of the Chairman of the Board, shall preside at all meetings of the
shareholders and of the Board of Directors at which he may be present. The
Vice-Chairman of the Board shall have such other powers and duties as, from
time to
13
<PAGE> 17
time, shall reside in or be assigned said office pursuant to the provisions
of subsection (h) of this Section 5:2 and Section 5:3.
(c) President. When the Chairman of the Board, and the Vice-Chairman of
---------
the Board, if any, are absent the President shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as, from
time to time shall reside in or be assigned to said office pursuant to the
provisions of subsection (h) of this Section 5:2 and of Section 5:3.
(d) Executive Vice-President and Vice President. Each Executive
-------------------------------------------
Vice-President and each Vice President, of such designation as the Board has
deemed appropriate, shall have such powers and duties as, from time to time,
shall reside in or be assigned to said office pursuant to the provisions of
subsection (h) of this Section 5:2 and of Section 5:3.
(e) Treasurer. Subject to the authority of the Chief Financial Officer
---------
of the Company, if there be one, the Treasurer shall have custody of, and be
responsible for, all the funds and securities of the Company, and shall
deposit and withdraw such funds and securities in and from such banks, trust
companies, or other depositories as shall be selected by and in accordance
with the resolutions adopted from time to time by the Board of Directors. He
shall also have such other powers and duties as, from time to time shall
reside in or be as assigned to said office pursuant to the provisions of
subsection (h) of this Section 5:2 and of Section 5:3.
(f) Secretary. The Secretary shall keep the minutes of the meetings of
---------
the shareholders, the Board of Directors (unless otherwise delegated by the
Board to one of its members), and the Executive Committee, if any, shall see
that all notices are duly given in accordance with the provisions of these
By-Laws or as required by law, be custodian of the Company's records and
seal, keep a register of the post office address of all shareholders, have
general charge of the books and records of the Company, and sign such
instruments with the President or other officers as may be required. The
Secretary shall have such other powers and duties as, from time to time,
shall reside in or be as assigned to said office pursuant to the provisions
of subsection (h) of this Section 5:2 and of Section 5:3.
(g) Controller. Subject to the authority of the Chief Financial Officer
----------
of the Company, if there be one, the Controller shall have custody of and be
responsible for the maintenance of the books of account of the Company. He
shall also have such other powers and duties as, from time to time shall
reside in or be as
14
<PAGE> 18
assigned to said office pursuant to the provisions of subsection (h) of this
Section 5:2 and of Section 5:3.
(h) Other Duties and Responsibilities. Subject to the ultimate
---------------------------------
authority of the Board of Directors and its Executive Committee, if there be
one, each of the officers elected or appointed by the Board of Directors,
shall have such other duties and responsibilities as may be provided by law,
and to the extent not in conflict with law, and as shall from time to time be
assigned, modified or terminated by the Chief Executive Officer or his
designee (which may be the person who is such officer's immediate superior as
shown on any Company organization chart or similar document outlining job
duties, responsibilities or accountabilities of the Company's officers as
may be in effect from time to time).
Functional Responsibilities.
- ---------------------------
Section 5:3. Chief Executive Officer. The Chief Executive Officer shall
-----------------------
have active executive management of and ultimate responsibility for the
conduct of the business operations of the Company. Such executive management
shall include the assignment of responsibilities of other elected or
appointed officers, provided however, that he may, in his sole discretion,
delegate his authority to assign the responsibilities of the other elected
officers to an officer designated by him for that purpose. Unless such power
is otherwise delegated to some other officer, agent or proxy, the Chief
Executive Officer shall have full power and authority in behalf of the
Company: (i) to act and to vote, as fully as the Company might do if present
at any meeting, or any adjournment thereof, of the shareholders of a
corporation in which the Company may hold stock; (ii) to waive notice of and
consent to the holding of any such meeting or adjournment; and (iii) to sign
a consent to action in lieu of any such meeting or adjournment.
Absence, Disability or Death - Elected Officers.
- -----------------------------------------------
Section 5:4. In the absence, disability or death of any elected Officer of
the Company the duties and powers of such officer shall be performed first by
the superior of such officer, or by such superior's designee, or second by
the person who is the officer's subordinate as shown in any Company
organization chart or similar document outlining job duties, responsibilities
or accountabilities of such officer in effect from time to time.
15
<PAGE> 19
Term of Office and Compensation.
- -------------------------------
Section 5:5. The compensation of the elected or appointed officers of the
Company shall be fixed by the Board of Directors; provided, however, that the
Board of Directors may delegate to any committee or officer, other than the
holder of the office involved, the power to fix the compensation of officers.
All officers of the Company shall hold office only at the pleasure of the
Board of Directors.
Removal.
- -------
Section 5:6. Any officer elected by the Board of Directors may be removed
by the Board of Directors with or without a hearing and with or without cause
whenever in its judgement the best interests of the Company will be served
thereby, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed.
Vacancies.
- ---------
Section 5:7. Any vacancy in any office because of death, resignation,
removal, or any other cause shall be filled in the manner prescribed in these
By-Laws for the election to such office.
Bonding.
- -------
Section 5:8. If so required by the Board of Directors, or applicable
Company policy an officer shall give bond for the faithful discharge of his
duties in such form and amount and with such sureties as the Board of
Directors may provide, but the premiums for any such bond shall be borne by
the Company.
Execution of Instruments.
- ------------------------
Section 5:9. All bills of exchange, promissory notes, and checks issued,
drawn, or made by the Company shall be signed by such officer or officers, or
such individual or individuals, as the Board of Directors may from time to
time designate therefor; provided, however, that in the absence of any such
designation, they may be signed on behalf of the Company by any two of the
following officers: The Chairman of the Board, the Vice-Chairman of the
Board, if any, the President, any Executive Vice President, any Vice-President,
and the Treasurer. Any other contract or obligation of the Company shall be
executed by such officer or officers, or such other individual or individuals,
as the Board of Directors may direct, or, in the absence of such direction, by
the Chairman of the Board, the Vice-Chairman of the Board, if any, the
16
<PAGE> 20
President, any Executive Vice-President, any Vice President (of whatever
designation he/she may have), the Secretary, the Treasurer, or an Assistant
Secretary, provided, however, that any person designated as an authorized
signer, whether by law, by action of the Board of Directors, by these By-Laws,
or otherwise, shall, without exception, obtain the prior approvals, or the
review of action, required by any resolution adopted by the Board of
Directors expressing a policy governing the execution of documents intended
to bind this Company. The seal of the Company may be affixed to instruments
executed on its behalf by its proper officers and shall be affixed to such
instruments as required by law and as the Board of Directors may direct.
When affixed, the seal may be attested by the Secretary, an Assistant
Secretary or by such other officer as the Board of Directors may direct.
ARTICLE VI: CAPITAL STOCK AND DIVIDENDS
---------- ---------------------------
Certificates of Shares.
- ----------------------
Section 6:1. Certificates for shares of the capital stock of the Company
shall be in such form, not inconsistent with applicable law or the Articles
of Incorporation, as shall be approved by the Board of Directors, and shall
be signed by the Chairman of the Board or by the President or an Executive
Vice-President or a Vice President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer, provided that the
signatures of any such officers thereon may be facsimiles, engraved or
printed, if such certificates are signed by a transfer agent other than the
Company or its employee or by a registrar other than the Company or its
employee. The seal of the Company shall be impressed, by original or by
facsimile, printed or engraved, on all such certificates. In case any such
officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon any such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued,
such certificate may nevertheless be issued by the Company with same effect
as if such officer, transfer agent or registrar had not ceased to be such
officer, transfer agent or registrar at the date of its issue.
Numbers and Data on Certificate.
- -------------------------------
Section 6:2. All Certificates shall be numbered as may be required by
resolution of the Board of Directors, and each shall show thereon the name of
the person owning the shares represented thereby, the number of such shares,
and the date of issue, which information shall be entered on the Company's
books.
17
<PAGE> 21
Cancellation of Certificates.
- ----------------------------
Section 6:3. Every certificate surrendered to the Company for transfer or
otherwise in exchange for a new certificate shall be marked "canceled" with
the date of cancellation, and no new certificate(s) in lieu thereof shall be
issued until the former certificate(s) for an equivalent number of shares
shall have been surrendered and cancelled, except as otherwise provided in
Section 6:6 of these By-Laws.
Registration and Change of Registration.
- ---------------------------------------
Section 6:4. The names and addresses of the persons owning certificates
representing shares of stock in the Company together with the number of
shares of stock owned by them respectively shall be registered on the books
of the Company. The Company shall register transfers of such certificates
together with the date of such transfers if the certificates are (1)
delivered and endorsed either in blank or to a specified person by the person
appearing by the certificate to be the owner of the shares represented
thereby, or (2) delivered together with a separate document containing a
written assignment of the certificate or a power of attorney to sell, assign,
or transfer the same or the share represented thereby, signed by the person
appearing by the certificate to be the owner of the shares represented
thereby (said assignment or power of attorney to be either in blank or to a
specified person), or (3) delivered together with an assignment endorsed
thereon or in a separate instrument signed by the trustee in bankruptcy,
receiver, guardian, executor, administrator, custodian, or other person duly
authorized by law to transfer the certificate on behalf of the person
appearing by the certificate to be the owner of the shares represented
thereby. Notwithstanding the above provisions on transfers of shares, the
person in whose name shares stand on the books of the Company at the date of
the closing of the transfer books or at the record date fixed by law or
pursuant to Section 6:7 of these By-Laws shall be deemed the owner thereof
insofar as rights to receive dividends, to vote, and to have any other rights
or privileges as a shareholder.
Regulations for Transfer.
- ------------------------
Section 6:5. The Board of Directors shall have power and authority to make
such rules and regulations as it deems expedient concerning the issue,
transfer, and registration of certificates for shares of the capital stock of
the Company, and may appoint one or more transfer agents or transfer clerks
as registrars of transfer, and may require all certificates to bear the
signature of a transfer agent or transfer clerk or registrar of transfer.
18
<PAGE> 22
Lost, Stolen, Destroyed or Mutilated Certificates.
- -------------------------------------------------
Section 6:6. Upon proof satisfactory to the Chairman of the Board, or, in
his absence the President and the Secretary that any certificate for shares
of the capital stock of the Company issued and outstanding has been lost,
stolen, destroyed or mutilated, and upon due application in writing by the
person in whose name the same may stand of record on the books of the
Company, or by his legal representative, and the surrender thereof in the
case of a mutilated certificate, or, in the case of a certificate having been
lost, stolen, or destroyed, the giving of an indemnifying bond in such form
and amount and with such sureties as the Board of Directors may require, the
proper officers of the Company are authorized and empowered to issue a new
certificate or certificates to the owner thereof in lieu of the certificate
that has been lost, stolen, destroyed, or mutilated. The Board of Directors
may delegate to any transfer agent of the Corporation the authorization of
the issue of such new certificate or certificates and the approval of the
form and amount of such indemnity bond or bonds and the surety or sureties
thereon.
Closing of Transfer Books and Record Dates.
- ------------------------------------------
Section 6:7. The Board of Directors shall have power to close the transfer
books of the Company for a period not exceeding fifty days (or such greater
period as then provided by law) preceding the date of any meeting of
shareholders or the date for payment of any dividend or the date for the
allotment of rights or the date when any change or conversion or exchange of
shares shall go into effect, or in lieu thereof may fix in advance a date not
exceeding fifty days (or such greater period as then provided by law)
preceding the date of any meeting of shareholders or the date for payment of
any dividend or the date of the allotment of rights or the date when any
change or conversion or exchange of shares shall go into effect, as a record
date for the determination of the shareholders entitled to notice of and to
vote at any such meeting and any adjournment thereof or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
shares, and in such case only shareholders of record on the date of closing
the transfer books or on the record date so fixed shall be entitled to such
notice of and to vote at such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or
to exercise such rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Company after such date of closing of the
transfer books or such record date fixed as aforesaid.
19
<PAGE> 23
Dividends.
- ---------
Section 6:8. Subject to any and all limitations upon the payment of
dividends imposed by law or by the Articles of Incorporation, the Board of
Directors, in its discretion, may from time to time declare and cause to be
paid dividends upon the outstanding shares of the capital stock of the
Company in cash, property, shares of the capital stock of the Company, or any
combination thereof.
ARTICLE VII: MISCELLANEOUS
----------- -------------
Corporate Seal.
- --------------
Section 7:1. The Board of Directors shall provide a suitable seal,
containing the name of the Company, which seal shall be in the custody of the
Secretary, and may provide for one or more duplicates thereof to be kept in
the custody of the Treasurer and Assistant Treasurer and/or Assistant
Secretary.
Resignations.
- ------------
Section 7:2. Any Director or Officer of the Company may resign such office
at any time by giving written notice to the Chairman of the Board of
Directors, the President, or the Secretary. Such resignation shall take
effect at the date of the receipt of such notice, or at any later time
specified therein, and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Waiver.
- ------
Section 7:3. Whenever any notice is required to be given by law, the
Articles of Incorporation, or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice, or a duly authorized
representative of such person, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Presence
at a meeting of shareholders or of Directors shall constitute a waiver of
notice except where the shareholder or Director states that he is present
solely for the purpose of objecting to the transaction of business because
the meeting was not lawfully called or convened.
Amendments.
- ----------
Section 7:4. The Board of Directors, provided the power conferred hereby
shall not be inconsistent with the Articles of
20
<PAGE> 24
Incorporation or applicable law, shall have power to make, amend and repeal
the By-Laws of the Company by a vote of a majority of all of the members of
the Board of Directors at any organization, regular or special meeting of the
Board, provided that notice of intention to make, amend or repeal the
By-Laws, in whole or in part shall have been given at the next preceding
meeting; or, without any such notice, by a vote of 2/3 of all of the members
of the Board of Directors.
Books and Records.
- -----------------
Section 7:5. Except as the Board of Directors may from time to time direct
or as may be required by law, the Company shall keep its books and records at
its principal office.
Severability.
- ------------
Section 7:6. If any word, clause or provision of these By-Laws shall, for
any reason, be determined to be invalid or ineffective, the provisions hereof
shall not otherwise be affected thereby and shall remain in full force and
effect.
ARTICLE VIII: INDEMNIFICATION OF DIRECTORS,
------------
OFFICERS AND OTHERS; INSURANCE
------------------------------
Liabilities Covered
- -------------------
Section 8:1(a). The Company shall indemnify any person who was, or is
threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer
of the Company or (at the request of the Company and in addition to his or
her service as a director or officer of the Company) is or was serving as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceedings, to the full extent and under the circumstances permitted by law.
For the purposes of this ARTICLE VIII, "officer" shall mean each person
elected, or requested to serve, as an officer by the Board of Directors of
the Company and any other person serving as an officer shall not be an
officer for the purposes of this ARTICLE VIII but may be indemnified as an
employee or agent of the Company or other enterprise.
21
<PAGE> 25
Section 8:1(b). In addition, the Company may (but shall not be obligated
to) indemnify any person who was or is threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is
or was an employee or agent of the Company or is or was serving at the
request of the Company as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceedings, to the full extent and under the circumstances permitted by
law.
Section 8:1(c). The Company shall not be obligated to indemnify any person
in connection with his service as a director, officer, employee or agent of a
constituent corporation merged into or consolidated with the Company, or his
service at the request of such a constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise; provided, however, such person may be
indemnified, to the full extent and under the circumstances permitted by law,
if in connection with such merger or consolidation, the Board of Directors of
the Company so directs or the agreement providing for such merger or
consolidation so provides.
Section 8:1(d). If this Section 8:1 is approved by a vote of the
stockholders of the Company, indemnification shall or may (as the case may
be) be provided hereunder unless the conduct of the person to be indemnified
is finally adjudged to have been knowingly fraudulent, deliberately dishonest
or willful misconduct.
Section 8:1(e). Notwithstanding anything set forth herein, no indemnity
shall be paid by the Company (i) in respect of remuneration paid to any
person if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law, or (ii) on
account of any suit in which judgment is rendered against any person (seeking
indemnification hereunder) for an accounting of profits made from the
purchase or sale by such person of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local
statutory law.
Procedures for Indemnification.
- ------------------------------
Section 8:2. Any indemnification under Section 8:1(a) of this ARTICLE VIII
(unless ordered by a court) shall be made by the
22
<PAGE> 26
Company unless a determination is reasonably and promptly made that
indemnification is not proper in the circumstances because the person to be
indemnified has not satisfied the conditions set forth in such Section 8:1.
Any indemnification under Section 8:1(b) of this ARTICLE VIII (unless ordered
by a court) shall be made as authorized in a specified case upon a
determination that indemnification is proper in the circumstances because the
person to be indemnified has satisfied the conditions set forth in such
Section 8:1. Any such determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
Advance Payment of Expenses.
- ---------------------------
Section 8:3(a). With respect to any person entitled to be indemnified
under Section 8:1(a) of this ARTICLE VIII, expenses incurred in defending a
civil or criminal action, suit or proceeding shall be paid by the Company in
advance of the final disposition of the action, suit or proceeding upon
receipt of an undertaking by or on behalf of the person seeking such advance
to repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the Company as authorized in this ARTICLE
VIII.
Section 8:3(b). With respect to any person who may be indemnified under
Section 8:1(b) of this ARTICLE VIII, expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance
of the final disposition of the action, suit or proceeding as authorized by
the Board of Directors in a specific case upon receipt of an undertaking by
or on behalf of the person seeking such indemnification to repay such amount
unless it shall ultimately be determined that he is entitled to be
indemnified by the Company as authorized in this ARTICLE VIII.
Extent of Rights Hereunder.
- --------------------------
Section 8:4. The foregoing rights of indemnification shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any By-Law, agreement, vote of stockholders of disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or other
23
<PAGE> 27
agent and shall inure to the benefit of the heirs, executors and administrators
of such person.
Purchase of Insurance.
- ---------------------
Section 8:5. The directors may authorize, to the extent permitted by The
General and Business Corporation Law of Missouri, as in effect and applicable
from time to time, the purchase and maintenance of insurance on behalf of any
person who is or was a director, officer, employee or agent of the Company or
is or was serving at the request of the Company as a director, officer,
employee or agent of another company, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by
him in such capacity or arising out of his status as such, whether or not the
Company would have the power to indemnify him against such liability under
the provisions of The General and Business Corporation Law of Missouri.
Indemnification Agreements.
- --------------------------
Section 8:6. With respect to any of the persons who shall or may be
indemnified pursuant to Section 8:1 of this ARTICLE VIII, the Company may
enter into written agreements providing for the mandatory indemnification of
such persons in accordance with the provisions of this ARTICLE VIII. In the
event of any conflict between the provisions of this ARTICLE VIII and the
provisions of an indemnification agreement adopted by the stockholders, the
terms of such agreement shall prevail.
24
<PAGE> 1
Exhibit 10.22
ANGELICA CORPORATION
FORM 10-K FOR FISCAL YEAR ENDED
JANUARY 31, 1998
SCHEDULE
The indemnification agreements presently in effect between the Company and
its Directors and executive officers as of various dates are substantially
identical in all material respects. This schedule is included pursuant to
Instruction 2 of Item 601(a) of Regulation S-K for the purpose of identifying
the Directors and executive officers executing such agreements:
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
David A. Abrahamson Director
Susan S. Elliott Director
Earle H. Harbison, Jr. Director
Don W. Hubble Chairman, President and Chief
Executive Officer
L. F. Loewe Director
Charles W. Mueller Director
William A. Peck, M.D. Director
William P. Stiritz Director
H. Edwin Trusheim Director
T. M. Armstrong Sr. Vice President-Finance and
Administration
Michael E. Burnham Vice President
Thomas M. Degnan Treasurer
L. Linden Mann Controller and Assistant
Secretary
Alan D. Wilson Vice President
Jill Witter Vice President, General Counsel
& Secretary
Lawrence J. Young Executive Vice President
</TABLE>
<PAGE> 2
INDEMNIFICATION AGREEMENT
-------------------------
THIS AGREEMENT, is made and entered into as of the ----- day of
- -----------, 199--, by and between ANGELICA CORPORATION, a Missouri
corporation ("Company"), and ------------------------ ("Indemnified Person").
W I T N E S S E T H:
--------------------
WHEREAS, Indemnified Person is a member of the Board of Directors
and/or an officer of Company and in such capacity is performing a valuable
service for Company; and
WHEREAS, Company presently maintains a policy or policies of
Directors and Officers Liability Insurance ("D & O Insurance"), insuring
against certain liabilities which may be incurred by its directors and
officers in the performance of their services for the Company; and
WHEREAS, the cost of such insurance is increasing substantially
and the coverage of such insurance is decreasing, and Company deems it
desirable, with the consent and approval of its stockholders, to enter into
agreements with the Directors and Officers to provide to them broader
indemnities and greater protection against liabilities incurred by them on
account of their services for the Company;
NOW, THEREFORE, in consideration of the continued service of
Indemnified Person as a Director and/or officer after the date hereof, the
parties hereto agree as follows:
1. Indemnity
---------
1.1. Company shall indemnify and hold Indemnified Person
harmless to the full extent authorized or permitted by the provisions of The
General and Business Corporation Law of Missouri, as in effect at the date of
this Agreement, or by any amendment thereof or any other statutory provisions
authorizing or permitting such indemnification which may be adopted after the
date hereof.
1.2. Without limiting the indemnity provided under Section
1.1 hereof, and subject only to the limitations set forth in Section 4
hereof, if Indemnified Person was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative, or whether an
action by a third party or by or in the right of Company) by reason of the
fact that Indemnified Person is or was a director or officer of Company (or,
if his service is or was at the request of Company, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise), then Company shall indemnify Indemnified Person against
expenses (including attorney's
- 2 -
<PAGE> 3
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnified Person in connection with such action,
suit or proceeding.
1.3. The costs and expenses incurred by Indemnified Person
in connection with any proceedings described in this Section 1 shall be paid
by Company in advance of the final disposition of such proceeding with the
understanding and agreement hereby made and entered into by Indemnified
Person that Indemnified Person shall repay to Company such amount, or the
appropriate portion thereof, so paid or advanced if it shall ultimately be
determined that Indemnified Person was not entitled to be indemnified by
Company hereunder.
1.4. If Indemnified Person is deceased and is or was
entitled to indemnification under any provision of this Agreement, such
indemnification shall continue and shall inure to the benefit of the heirs,
executors and administrators of Indemnified Person.
2. Maintenance of Insurance
------------------------
2.1. Company has in force and effect D & O Insurance which
provides insurance protection to its directors and officers against certain
liabilities which may be incurred by them on account of services for
Company. Company may, but shall not be required to, continue all or any part
of said insurance coverage in effect. If such insurance coverage shall be
maintained by Company, such insurance, to the extent of the coverage
provided thereby, shall be primary and Company's agreement of indemnity
hereunder shall be effective only to the extent that the Indemnified Person
is not reimbursed pursuant to such insurance coverage, and if Company shall
have advanced any amount to or for Indemnified Person which is later
recovered by Indemnified Person under such insurance coverage, Indemnified
Person shall repay such recovered amount to Company. If such insurance shall
not be maintained by Company, Indemnified Person shall be indemnified fully
by Company in accordance with the provisions of Section 1 of this Agreement.
3. Determination of Right to Indemnification
-----------------------------------------
3.1. The indemnification under Section 1 hereof shall be
made by the Company unless a determination is reasonably and promptly made
that indemnification is not proper in the circumstances because of the
limitations set forth in Section 4 hereof. Any such determination shall be
made (unless ordered by a court) by the Board of Directors of Company, by a
majority vote of quorum consisting of directors who were not parties to such
action, suit or proceeding.
3.2. In the event that a quorum of directors who were not
parties to such action, suit or proceeding is not available, or even if
available, if a quorum of disinterested directors so
- 3 -
<PAGE> 4
directs, such determination shall be made by independent legal counsel in a
written opinion. The fees and expenses of counsel in connection with making
said determination contemplated hereunder shall be paid by Company.
3.3. If the person (including the Board of Directors,
independent legal counsel or a court) making the determination hereunder
shall determine that Indemnified Person is entitled to indemnification as to
some claims, issues or matters involved in the action, suit or proceeding but
not as to others, such person shall reasonably prorate the expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to which indemnification is sought by Indemnified Person among
such claims, issues and matters.
4. Limitations on Indemnity No indemnity pursuant to
------------------------
Section 1 hereof shall be paid by Company:
(a) In respect of remuneration paid to Indemnified Person
if it shall be determined by a final judgment or other
final adjudication that such remuneration was in
violation of law;
(b) On account of any suit in which judgment is rendered
against Indemnified Person for an accounting of profits
made from the purchase or sale by Indemnified Person of
securities of Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal,
state or local statutory law; or
(c) If Indemnified Person's conduct is finally adjudged to
have been knowingly fraudulent, deliberately dishonest,
or willful misconduct.
5. Continuation of Indemnity All agreements and obligations
-------------------------
of Company contained herein shall continue during the period Indemnified
Person is a director and/or officer of Company (or is or was serving at the
request of Company as a director and/or officer of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Indemnified Person shall be subject to any possible
claim or threatened, pending or completed action, suit or proceeding, whether
civil, criminal or investigative, by reason of the fact that Indemnified
Person is or was a director and/or officer of Company or serving in any other
capacity referred to herein.
6. Notice to Company; Defense and Settlement of Claims
---------------------------------------------------
6.1. Indemnified Person shall promptly notify Company in
writing upon being served with any citation, petition, complaint,
- 4 -
<PAGE> 5
indictment or other document relating to any proceeding which could give rise
to indemnification hereunder. The omission so to notify Company shall not
relieve Company from any liability which it may have to Indemnified Person
otherwise than under this Agreement.
6.2. With respect to any action, suit or proceeding as to
which Indemnified Person notifies Company of the commencement thereof:
(a) Company will be entitled to participate therein
at its own expense.
(b) Except as otherwise provided below, to the extent
that it may wish, Company jointly with any other
indemnifying party similarly notified will be
entitled to assume the defense thereof, with
counsel satisfactory to Indemnified Person. After
notice from Company to Indemnified Person of its
election so to assume the defense thereof, Company
will not be liable to Indemnified Person under
this Agreement for any legal or other expenses
subsequently incurred by Indemnified Person in
connection with the defense thereof other than as
otherwise provided below. Indemnified Person
shall have the right to employ his or her own
counsel in such action, suit or proceeding, but
the fees and expenses of such counsel incurred
after notice from Company of its assumption of the
defense thereof shall be at the expense of
Indemnified Person unless (i) the employment of
counsel by Indemnified Person has been authorized
by Company; or (ii) Company shall not in fact have
employed counsel to assume the defense of such
action, in each of which cases the fees and
expenses of counsel shall be at the expense of
Company.
(c) Company shall not be liable to indemnify
Indemnified Person under this Agreement for any
amounts paid in settlement of any action or claim
effected without its written consent. Company
shall not settle any action or claim in any manner
which would impose any penalty or limitation on
Indemnified Person without Indemnified Person's
written consent. Neither Company nor Indemnified
Person will reasonably withhold its consent to
any proposed settlement.
7. Other Rights and Remedies The indemnification and
-------------------------
advance payment of expenses provided by any provision of this
- 5 -
<PAGE> 6
Agreement shall not be deemed exclusive of any other rights to which
Indemnified Person may be entitled under any provision of the Articles of
Incorporation or By-Laws of Company, any agreement, any vote of stockholders
or disinterested directors, or otherwise.
8. Enforcement
-----------
8.1. Company expressly confirms that it has entered into
this Agreement and assumed the obligations imposed on Company hereby in order
to induce Indemnified Person to continue as a director and/or officer of
Company, and acknowledges that Indemnified Person is relying upon this
Agreement in continuing in such capacity.
8.2. In the event Indemnified Person is required to bring
any action to enforce rights or to collect monies due under this Agreement
and is successful in such action, Company shall reimburse Indemnified Person
for all of Indemnified Person's reasonable fees and expenses in bringing and
pursuing such action.
9. Notices
-------
9.1. All notices, requests, demands or other communications
hereunder shall be by United States mail, certified or registered, return
receipt requested, with postage prepaid, addressed to the intended recipient
as follows:
(a) If to Indemnified Person, to the address indicated
on the signature page hereof; or
(b) If to Company, to:
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attn: President
9.2. Either party may change its, his or her address for
notices hereunder by giving written notice to the other party in the manner
set forth above. Any notice, request, demand or other communication
hereunder shall be deemed given on the third business day after it is
deposited in the United States mail in the manner set forth above.
10. Severability If any provision or provisions of this
------------
Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby, and to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves
- 6 -
<PAGE> 7
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provisions held invalid, illegal or
unenforceable.
11. Miscellaneous
-------------
11.1. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
11.2. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
11.3. The parties hereto agree that this Agreement shall
be construed and enforced in accordance with, and governed by, the laws of the
state of Missouri.
11.4. This Agreement shall be binding upon Company and its
successors and assigns and shall inure to the benefit of Indemnified Person
and his or her spouse, heirs, executors and administrators.
11.5. In the event Company shall make any payment to or on
behalf of Indemnified Person under the terms of this Agreement, whether in
satisfaction of any judgment, payment in settlement, reimbursement of
expenses, or otherwise, Company shall succeed to, and have by way of
subrogation, all of the rights theretofore possessed by Indemnified Person
against any other person, firm or corporation for or on account of the
lawsuit, claim or matter in respect of which the payment was made, including,
without limitation, full subrogation to claim any right Indemnified Person
had or may have had against any insurance company providing D & O Insurance
to Company, its officers and directors.
- 7 -
<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
ANGELICA CORPORATION
By:-----------------------------
Chairman of the Board
ATTEST
- ----------------------------
Secretary
--------------------------------
"Indemnified Person"
- 8 -
<PAGE> 1
Exhibit 10.30
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
This agreement ("Agreement") has been entered into this 12
day of December, 1997, by and between Angelica Corporation,
Missouri corporation ("Company") and Don W. Hubble, an individual
("Executive").
For and in consideration of the mutual promises herein
contained, the parties hereto agree as follow:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have
the meanings specified below, unless the context plainly requires
a different meaning.
1.1(a) "ACCRUED OBLIGATIONS" has the meaning set forth
in Section 4.1(a) of this Agreement.
1.1(b) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(c) "BOARD" means the Board of Directors of the
Company.
1.1(d) "CAUSE" has the meaning set forth in Section 3.3
of this Agreement.
1.1(e) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section 13(d)(3) or 14(d)
(2) of the Exchange Act) of ownership of 30% or more of either (a)
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (b) the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company voting Securities"); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however,
-----------------
that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation or proxies or consents
by or on behalf of a Person other than the Board; or
(iii) Approval by the stockholders of the Company
of reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (a) more
<PAGE> 2
than 50% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (b) no Person beneficially owns, directly or indirectly,
30% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger
or consolidation or the combined voting power of the then
outstanding voting securities of such corporation, entitled to vote
generally in the election of directors and (c) at least a majority
of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization, merger or
consolidation; or
(iv) approval by the stockholders of the Company of
(a) a complete liquidation or dissolution of the Company or (b) the
sale or other disposition of all or substantially all of the assets
of the Company with respect to which following such sale or other
disposition, (1) more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or
other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no
Person beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors and (3) at least a majority of the
members of the board of directors of such corporation were members
of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale of other
disposition of assets of the Company.
1.1(f) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to successors, in
Section 6.2 of this Agreement.
1.1(g) "CODE" shall mean the Internal Revenue code of
1986, as amended.
1.1(h) "CURRENT TARGET BONUS" has the meaning set forth
in Section 4.1(a) of this Agreement.
1.1(i) "DATE OF TERMINATION" has the meaning set forth
in Section 3.6 of this Agreement.
1.1(j) "DISABILITY" has the meaning set forth in Section
3.2 of this Agreement.
1.1(k) "DISABILITY EFFECTIVE DATE" has the meaning set
forth in Section 3.2 of this Agreement.
2
<PAGE> 3
1.1(l) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the stock of an
Operating Line of Business that is or becomes a separate
corporation, limited liability corporation, partnership or other
business entity, the sale, exchange, transfer, distribution or
other disposition of the ownership, either beneficially or of
record or both, by the Company of more than 50% of either (a) the
then outstanding shares of common stock (or the equivalent equity
interests) of such Operating Line of Business, or (b) the combined
voting power of the then outstanding voting securities of such
Operating Line of Business entitled to vote generally in the
election of the Board or the equivalent governing body of such
Operating Line of Business;
(ii) when used with reference to the merger or
consolidation of an Operating Line of Business that is or becomes
a separate corporation, limited liability corporation, partnership
or other business entity, any such transaction that results in the
Company owning, either beneficially or of record or both, less than
50% of either (a) the then outstanding shares of common stock (or
the equivalent equity interest) of such Operating Line of Business,
or (b) the combined voting power of the then outstanding voting
securities of such Operating Line of Business entitled to vote
generally in the election of the Board or the equivalent governing
body of such Operating Line of Business: or
(iii) when used with reference to the assets of
an Operating Line of Business, the sale, exchange, transfer,
liquidation, distribution or other disposition of the assets of
such Operating Line of Business (a) having a fair market value (as
determined by the Incumbent Board) aggregating more than 50% of the
aggregate fair market value of all of the assets of such Operating
Line of Business as of the Triggering Transaction Date, (b)
accounting for more than 50% of the aggregate book value (net of
depreciation and amortization) of all of the assets of such
Operating Line of Business, as would be shown on a balance sheet
for such Operating Line of Business, prepared in accordance with
generally accepted accounting principles then in effect, as of the
Triggering Transaction Date, or (c) accounting for more than 50% of
the net income of such Operating Line of Business, as would be
shown on an income statement, prepared in accordance with generally
accepted accounting principles then in effect, for the 12 months
ending on the last day of the month immediately preceding the month
in which the Triggering Transaction Date occurs.
1.1(m) "EFFECTIVE DATE" means January 1, 1998.
1.1(n) "EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
1.1(o) "EXCISE TAX" has the meaning set forth in Section
4.2(g) of this Agreement.
1.1(p) "GOOD REASON" has the meaning set forth in
Section 3.4 of this Agreement.
1.1(q) "GROSS-UP PAYMENT" has the meaning set forth in
Section 4.2(g) of this Agreement.
1.1(r) "INCENTIVE BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(s) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(e) of this Agreement.
3
<PAGE> 4
1.1(t) "NOTICE OF TERMINATION" has the meaning set forth
in Section 3.5 of this Agreement.
1.1(u) "OPERATING LINES OF BUSINESS" means the following
lines of business of the Company, whether operated as a division or
as a separate subsidiary: (i) textile rental and laundry
services, which provides textiles and laundry services, principally
to health care institutions, and, to a more limited extent, to
hotels, casinos, motels and restaurants in or near major
metropolitan areas of the United States; (ii) uniform and
business apparel manufacturing and marketing, which manufactures
and sells uniforms and business apparel to a wide variety of
institutions and businesses in the United States, Canada and/or the
United Kingdom; and (iii) retail specialty stores, which operates
a nationwide chain of specialty retail stores primarily for a
clientele of nurses and other health care professionals.
1.1(v) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(c) of this Agreement.
1.1(w) "OUTSTANDING COMPANY COMMON STOCK" has the
meaning set forth in Section 1.1(e)(i) of this Agreement.
1.1(x) "OUTSTANDING COMPANY VOTING SECURITIES" has the
meaning set forth in Section 1.1(e)(i) of this Agreement.
1.1(y) "PAYMENT" has the meaning set forth in Section
4.2(g) of this Agreement.
1.1(z) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.1(aa) "TERM" means the period that begins on the
Effective Date and ends on the Date of Termination as defined in
Section 3.6 of this Agreement.
1.1(bb) "TRIGGERING TRANSACTION" means (i) a Change in
Control of the Company or (ii) a Disposition of a Major Part of two
or more of the Company's Operating Lines of Business.
1.1(cc) "TRIGGERING TRANSACTION DATE" shall mean the
date of the Triggering Transaction.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender,
words in the singular include the plural, and words in the plural
include the singular.
1.3 HEADINGS. All headings in this Agreement are included
solely for ease of reference and do not bear on the interpretation
of the text. Accordingly, as used in this Agreement, the terms
"Article" and "Section" mean the text that accompanies the
specified Article or Section of the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
4
<PAGE> 5
2. TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in the
employ of the Company throughout the Term of this Agreement in
accordance with the terms and provisions of this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the
Executive shall serve as Chairman of the Board, Chief Executive
Officer and President of the Company, subject to the reasonable
directions of the Board. The Executive shall have such authority
and shall perform such duties as are specified by the Bylaws of the
Company for the office to which he has been appointed hereunder and
shall so serve, subject to the control exercised by the Board from
time to time.
2.2(b) Throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which the
Executive is entitled), the Executive shall devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and shall use his reasonable best efforts to
perform faithfully and efficiently such responsibilities as are
assigned to him under or in accordance with this Agreement;
provided that, it shall not be a violation of this paragraph for
the Executive to (i) serve on corporate, civic or charitable boards
or committees (as approved by the Board), (ii) deliver lectures or
fulfill speaking engagements, or (iii) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of
the Company in accordance with this Agreement or violate the
Company's conflict of interest policy as in effect immediately
prior to the Effective Date.
2.2(c) It is understood and agreed that nothing
contained in this Agreement shall be deemed to be a guarantee of
continued employment or employment for a specific term.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed in the
greater St. Louis, Missouri area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first year of
employment, the Executive shall receive an annual base salary
("Annual Base Salary") of Three Hundred Seventy Five Thousand
($375,000), which shall be paid in equal or substantially equal
semi-monthly installments. During the Term of this Agreement, the
Annual Base Salary payable to Executive shall be reviewed at least
annually and may be adjusted.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive shall be awarded the opportunity to earn an
incentive bonus on an annual basis ("Incentive Bonus") under any
incentive compensation plan which is generally available to other
similarly situated executives of the Company. The annual target
Incentive Bonus shall be equal to Fifty Percent (50%) of Annual
Base Salary. The annual target Incentive Bonus which the Executive
will have opportunity to earn shall be reviewed at least annually
and may be adjusted at the discretion of the Board dependent upon
the Executive's performance and in accordance with Company policy.
For the fiscal year 1999, the target Incentive Bonus shall be One
Hundred Eighty Seven Thousand, Five Hundred Dollars ($187,500) and
shall be based on target goal formulas mutually agreeable to
Executive and the Board. The Incentive Bonus paid for fiscal 1999
shall not be less than One Hundred Seventy-Five Thousand Dollars
5
<PAGE> 6
($175,000) and can reach, based on over-achievement of goals, a
maximum of Eighty Percent (80%) of Annual Base Salary or Three
Hundred Thousand Dollars ($300,000). For fiscal year 1998,
Executive shall receive an incentive bonus of Fourteen Thousand
Five Hundred Eighty Three Dollars ($14,583.00.)
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
Throughout the Term of this Agreement, the Executive shall be
entitled to participate in all incentive, savings and retirement
plans generally available to other similarly situated executives
of the Company. Executive shall participate in the Supplemental
Plan at the maximum percentage of Fifty Percent ("50%") of final
average compensation.
In addition to the incentive, savings and retirement
plans generally available to other similarly situated executives,
Company shall enter into a retirement benefit agreement (the
"Retirement Agreement") attached hereto as Exhibit "A" with
Executive which provides for an annual lifetime benefit of Fifteen
Thousand Dollars ("$15,000") per year for each full year of service
with the Company ("Retirement Benefit"). Such Retirement Benefit
will be offset by any Angelica Corporation Pension Plan benefits,
Supplemental Plan benefits, or other noncontributory retirement
plan benefits payable to Executive.
2.4(d) WELFARE BENEFIT PLANS. Throughout the Term of
this Agreement (and thereafter), the Executive and/or the
Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent generally available to other similarly situated
executives of the Company.
2.4(e) RESTRICTED STOCK. Executive shall receive a
grant, effective January 2, 1998, of Twenty-Five Thousand (25,000)
restricted shares of Company Common Stock ("Restricted Shares").
Eight Thousand Three Hundred Thirty Three (8,333) shares of the
Restricted Shares shall vest at the end of each of the first two
years of employment and Eight Thousand Three Hundred Thirty Four
(8,334) shares of the Restricted Shares shall vest at the end of
the third year of employment. In the event Executive's employment
with Company terminates for any reason other than death or
Disability prior to the Restricted Shares vesting, the unvested
Restricted Shares will be forfeited. Executive may not sell any
Restricted Shares until such Restricted Shares are vested,
provided, however, that Executive shall be entitled to full
dividend and voting rights relative to such Restricted Shares. In
the event Executive's employment terminates as a result of death or
Disability, all remaining Restricted Shares shall immediately vest.
2.4(f) STOCK OPTIONS. Executive shall receive,
effective January 2, 1998, an option grant to purchase One Hundred
Thousand (100,000) shares of Company Common Stock ("Stock
Options"). One third of the total Stock Options shall become
exercisable after the completion of each year of service over the
first three years of employment. The options shall expire on
January 2, 2005. The exercise price of the Stock Options shall
be the average of the high and low price of the Company Common
Stock on January 2, 1998. The Stock Options shall be granted in
accordance with the terms and conditions similar to those set out
in the Angelica Corporation 1994 Performance Plan. Further grants
of stock options shall be based on the Executive's and the
Company's performance and shall be at the discretion of the
Compensation Committee.
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2.4(g) RELOCATION EXPENSES. Company will reimburse
Executive for the normal expenses associated with relocating
Executive and his family from Atlanta, Georgia, to St. Louis,
Missouri, including transportation of all household furnishings
(including two automobiles) , real estate commissions incurred in
connection with the sale of Executive's residence at 2621 Winslow
Drive N.E,. Atlanta, Georgia, 30305, provided that such commissions
do not exceed the prevailing real estate commission rate in the
Atlanta metropolitan area, standard closing costs for a home
purchased in the St. Louis area, provided such home is purchased
within one year from the date hereof, reasonable house hunting
trips to St. Louis for Executive and his spouse, and 90 days
temporary housing in St. Louis. Company reserves the right to
employ the services of a national relocation firm's services.
2.4(h) EXPENSES. Throughout the Term of this Agreement,
the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the policies, practices and procedures generally applicable to
other similarly situated executives of the Company.
2.4(i) OFFICE AND SUPPORT STAFF. Throughout the Term of
this Agreement, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and
to personal secretarial and other assistance, at least equal to
those generally provided to other similarly situated executives of
the Company.
2.4(j) VACATION. Throughout the Term of this Agreement,
the Executive shall be entitled to paid vacation in accordance with
the plans, policies, programs and practices generally provided with
respect to other similarly situated executives of the Company.
3. TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Term of the
Agreement.
3.2 DISABILITY. If the Company determines in good faith that
the Disability of the Executive has occurred during the Term of the
Agreement (pursuant to the definition of Disability set forth
below), the Company may give to the Executive written notice in
accordance with Section 7.2 of its intention to terminate the
Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean that the Executive has been
unable to perform the services required of the Executive hereunder
on a full-time basis for a period of one hundred eighty (180)
consecutive business days by reason of a physical and/or mental
condition. "Disability" shall be deemed to exist when certified by
a physician selected by the Company and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will
submit to such medical or psychiatric examinations and tests as
such physician deems necessary to make any such Disability
determination.
3.3 TERMINATION FOR CAUSE OR NON-PERFORMANCE.
3.3(a) Termination of the Executive's employment by the
Company for " Cause" shall mean termination based upon: (i) the
Executive's willful and continued failure to substantially perform
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<PAGE> 8
his duties with the Company (other than as a result of incapacity
due to physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties; (ii) the
Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty or breach of trust; or (iii)
the Executive's material breach of any provision of this Agreement.
For purposes of this Section, no act, or failure to act on the
Executive's part, shall be considered "willful" unless done, or
omitted to be done, without good faith and without reasonable
belief that the act or omission was in the best interest of the
Company.
3.3(b) Termination of the Executive's employment by the
Company for "Non-Performance" shall mean termination based upon
Executive's inability to meet agreed upon reasonable performance
plans, as expressly agreed to in writing.
3.3(c) Notwithstanding the provisions of Sections
3.3(a) and 3.3(b), the Executive shall not be deemed to have been
terminated for Cause or Non-Performance unless and until (i) he
receives a Notice of Termination from the Company, (ii) he is given
the opportunity, with counsel, to be heard before the Board, and
(iii) the Board finds, in its good faith opinion, the Executive
failed to perform in accordance with performance standards or was
guilty of the conduct set forth in the Notice of Termination, as
applicable.
3.4 GOOD REASON. Pursuant to Section 4.2, the Executive may
terminate his employment with the Company for "Good Reason," which
shall mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
2.2(a) or any other action by the Company which results in a
material diminution in such position, authority, duties or
responsibilities, excluding for this purpose any action not taken
in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership plan, life
insurance plan, health and accident plan or disability plan to
which the Executive is entitled as specified in Section 2.4, (ii)
the taking of any action by the Company which would adversely
affect the Executive's participation in, or materially reduce the
Executive's benefits under, any plans described in Section 2.4, or
(iii) the failure by the Company to provide the Executive with paid
vacation to which the Executive is entitled as described in Section
2.4(j).
3.4(c) a material breach by the Company of any provision
of this Agreement;
3.4(d) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement;
3.4(e) within a period ending at the close of business
on the date two (2) years after the Triggering Transaction Date of
any Change in Control, if the Company has failed to comply with and
satisfy Section 6.2 on or after such Triggering Transaction Date;
or
3.4(f) the Company's requiring the Executive to be based
at any office or location other than that described in Section 2.3.
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For purposes of this Section, any good faith
determination of "Good Reason" made by the Executive shall be
conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the Company
for Cause, Non-Performance or Disability, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the
other party, given in accordance with Section 7.2. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as
defined in Section 3.6 hereof) is other than the date of receipt of
such notice, specifies the termination date (which date shall be
not more than ninety (90) days after the giving of such notice).
The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason, Non-Performance, or Cause shall not waive
any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance
in enforcing the Executive's or the Company's rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause
or Non-Performance, or by the Executive for Good Reason, the Date
of Termination shall be the date specified in the Notice of
Termination, (ii) if the Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the
date of death of the Executive or the Disability Effective Date, as
the case may be, or (iii) if the Executive's employment is
terminated by the Company other than for Cause, Non-Performance,
death or Disability, or by the Executive for other than Good
Reason, the Date of Termination shall be the date specified in the
Notice of Termination; provided that if within thirty (30) days
after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined, either by
mutual written agreement of the parties, or by a final judgment,
order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been
perfected).
4. CERTAIN BENEFITS UPON TERMINATION.
4.1 BENEFITS UPON TERMINATION NOT IN CONNECTION WITH A
TRIGGERING TRANSACTION. If, prior to a Triggering Transaction
during the Term of the Agreement (except in the event that one of
the following termination of employment events occurs within the
six-month period prior to the earlier of (a)) a Triggering
Transaction or (b) the execution of a definitive agreement or
contract that eventually results in a Triggering Transaction, which
shall result in the payment of severance benefits set forth in
Section 4.2 of this Agreement): (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason (other than
as a result of the Company requiring the Executive to be based at
any office or location other than that described in Section 2.3, as
set out in Section 3.4(f)), the Executive shall be entitled to the
payment of the benefits provided below as of the Date of
Termination:
4.1(a) Accrued Obligations. Within thirty (30) days
--------------------
after the Date of Termination, the Company shall pay to the
Executive the sum of (i) the Executive's Annual Base Salary through
the Date of Termination to the extent not previously paid, and (ii)
any accrued vacation pay; in each case to the extent not previously
paid (the "Accrued Obligations").
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In addition, on the date that Incentive Bonuses are paid
to other similarly situated executives for the year in which the
Executive's employment is terminated, the Executive will be paid an
amount equal to the product of the Current Target bonus multiplied
by a fraction, the numerator of which is the number of days during
the fiscal year for which the Incentive Bonus is paid prior to the
Date of Termination and the denominator of which is 365. For
purposes of this Agreement, the term "Current Target Bonus" means
the Incentive Bonus that would have been paid to the Executive for
the fiscal year in which the termination of employment occurred, if
the Executive's employment had not been so terminated and the
Executive had earned 100% of the Incentive Bonus that he could have
earned for such year.
4.1(b) Severance Payment. The Company shall pay to the
-----------------
Executive as severance pay the following amounts:
4.1(b)(i) If termination occurs within the first
year of employment, the company will pay, from the date of
termination, Monthly Target Compensation (Annual Base Salary plus
Current Target Bonus divided by 12) , for the number of months
which, when added to the number of months worked, equals 24.
4.1(b)(ii) If termination occurs during the
second year of employment, the Company will pay 12 months of
Monthly Target Compensation from the date of termination.
4.1(b)(iii) If termination occurs after the
second year of employment, the Company will pay 24 months of
Monthly Target Compensation from the date of termination.
The Company at any time may elect to pay the
balance of such severance payments then remaining in a lump sum, in
which case the total of such payments shall be discounted to
present value on the basis of the applicable Federal short-term
monthly rate as determined according to Code Section 1274(d) for
the month in which the Executive's Date of Termination occurred.
4.1(c) Other Benefits. To the extent not previously
---------------
paid or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided for which the Executive
and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other similarly situated executives and their families.
4.1(d) Medical and Health Benefit Continuation. For the
----------------------------------------
remainder of the Employment Period (but in no case less than one
(1) year after the Date of Termination), of such longer period as
any plan, program, practice or policy may provide, the company
shall continue medical and health benefits to the Executive and/or
the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs,
practices and policies described in Section 2.4(d) if the
Executive's employment had not been terminated, in accordance with
the plans, practices, programs or policies of the Company as those
provided generally to other similarly situated executives and
their families; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical
or heath benefits under another employer-provided plan, or is
otherwise eligible to receive Medicare or similar medical and
health benefits, the medical and health benefits described herein
shall be secondary to those provided under such other plans during
such applicable period of eligibility.
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4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A TRIGGERING
TRANSACTION. If (a) a Triggering Transaction occurs during the
Term of the Agreement and within three (3) years after the
Triggering Transaction Date (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or,
alternatively, (b) if one of the above-described termination of
employment events occurs within the six-month period prior to the
earlier of (i) a Triggering Transaction or (ii) the execution of a
definitive agreement or contract that eventually results in a
Triggering Transaction, then the Executive shall become entitled to
the payment of the benefits as provided below as of either (y) the
Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z) the
Triggering Transaction Date, in the case where the sequence of the
requisite events occurred as set forth in subsection (b) above (the
relevant date for purposes of entitlement to the benefits as set
forth in this Section 4.2 is hereinafter referred to as the
"Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30) days
--------------------
after the Date of Termination, the Company shall pay to the
Executive the Accrued Obligations.
In addition, on the date that Incentive Bonuses are paid
to other similarly situated executives for the year in which the
Executive's employment is terminated, the Executive will be paid an
amount equal to the product of the Current Target bonus multiplied
by a fraction, the numerator of which is the number of days during
the fiscal year for which the Incentive Bonus is paid prior to the
Date of Termination and the denominator of which is 365.
4.2(b) Severance Payment. Within thirty (30) days after
-----------------
the Entitlement Date, the Company shall pay to the Executive as
severance pay in a lump sum in cash an amount equal to 2.99 times
his then-current Annual Base Salary and Current Target Bonus.
4.2(c) Stock Options. To the extent not otherwise
--------------
provided for under the terms of the Company's stock option plans or
the Executive's stock option agreements, all stock options held by
the Executive that have not expired in accordance with their
respective terms shall vest and become fully exercisable as of the
Entitlement Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the
--------------------------------------
extent not otherwise provided for under the terms of the Company's
Stock Bonus and Incentive Plan, all "Matching Shares" (as defined
in such plan) held by or for the benefit of the Executive that are
unvested and restricted at the Date of Termination shall vest and
become unrestricted as of the Entitlement Date and all "Elected
Shares" (as defined in such plan) held by or for the benefit of the
Executive that are restricted at the Date of Termination shall
become unrestricted as of the Entitlement Date.
4.2(e) Medical and Health Benefit Continuation. For a
----------------------------------------
period of ten years after the Entitlement Date and without cost to
the Executive and/or his family, the Company shall continue medical
and health benefits to the Executive and/or the Executive's family
at least equal to those which were being provided to them prior to
the Date of Termination; provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive
medical or health benefits under another employer-provided plan,
or is otherwise eligible to receive Medicare or similar medical and
health benefits, the medical and health benefits described herein
shall be secondary to those provided under such other plans during
such applicable period of eligibility.
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4.2(f) Other Benefits. To the extent not previously
---------------
paid or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided for which the Executive
and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other similarly situated executives and their families.
Any provision in any plan or program of the Company in
which Executive is a participant that precludes Executive from
competing with the Company, or denies Executive entitlement to a
benefit in the event Executive does compete with the Company, shall
be null and void.
4.2(g) Excess Parachute Payment. Anything in this
-------------------------
Agreement to the contrary notwithstanding, in the event that it
shall be determined that any payment or distribution by the Company
to or for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise but determined without regard to any
additional payments required under this Section (a "Payment") would
be subject to the excise tax imposed by Code Section 4999 (or any
successor provision) or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment ( a "Gross-Up
Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis equal to
the Excise Tax imposed upon the Payment.
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after the Executive is informed in writing
of such claim by the Internal Revenue Service and the notification
shall apprise the Company of the nature of the claim and the date
on which such claim is required to be paid. The Executive shall
not pay such claim prior to the expiration of a 30-day period
following the date on which the Executive has given such
notification to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
required). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such
claim, the Executive shall cooperate with the Company in so
contesting; provided, however, that the Company shall bear and pay
-----------------
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest, on an after-
tax basis to the Executive.
4.2(h) Enhanced Supplemental Retirement Plan Benefits.
-----------------------------------------------
The benefit payable to the Executive under the Angelica Corporation
Supplemental Plan (as originally effective April 1, 1980 and as
amended from time to time, including a restatement as of January
23, 1990) (the "Supplemental Plan") shall be determined taking into
account the following modifications:
(i) The amount payable to the Executive pursuant to
Section 4 of the Supplemental Plan shall be determined on the basis
of the service with the Company the Executive would have completed
if he had continued to be employed by the Company until retirement
at age 65; provided such additional imputed service shall not
exceed ten years.
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(ii) The Executive may begin to receive payments at any
time after termination without any discount because the payments
commence before the Executive is age 65, regardless of the
provisions of Section 6 of the Supplemental Plan.
(iii) In addition to the benefit payable to the
Executive as determined above, if the Executive has not attained
age 65 as of his Entitlement Date, he shall be entitled to receive
a monthly benefit equal to the amount of old-age insurance benefit
to which he would be entitled at age 65 under the Social Security
Act, based upon the assumption that he will continue to receive
until reaching age 65 compensation that would be treated as wages
for purposes of the Social Security Act at the same rate as he
received such compensation at the time of retirement or severance,
which benefit shall commence on the Executive's Entitlement Date
and shall end when the Executive attains the age of 65 years.
The Executive shall be entitled to receive his entire
benefit, including the enhanced benefits provided by this
Agreement, in a single lump sum cash payment within thirty (30)
days after the Entitlement Date, in which case the total of such
payments shall be discounted to present value on the basis of the
average of the interest rates, as reported in the Wall Street
Journal as of the close of trading for the 20 days that immediately
preceded the Entitlement Date on which the new York Stock Exchange
was open for trading, of the shortest term U.S. Treasury bond that
matures at least 20 years after the Entitlement Date. In the event
enhanced Supplemental Plan benefits are payable pursuant to this
Section on account of a Triggering Transaction, and the Executive
is entitled to a benefit under Section 10 of the Supplemental Plan
on account of a Change in Control (as defined in the Supplemental
Plan), the Executive shall be entitled to the larger of the amounts
computed pursuant to this Section and the amounts computed pursuant
to the Supplemental Plan without regard to this Section. Such
benefit shall be in lieu of any other benefit payable pursuant to
the Supplemental Plan.
4.2(i) Enhanced Retirement Agreement Plan Benefits.
--------------------------------------------
For purposes of determining the amount payable to Executive
pursuant to the Retirement Agreement, as defined in Section 2.4(c)
of this Agreement, the years of service with the Company shall be
determined as if the Executive had continued to be employed by the
Company until age 65 (but not more than ten years of imputed
service.). The Executive shall be entitled to receive such
enhanced benefit in a single lump sum cash payment within thirty
(30) days after the Entitlement Date in an amount equal to the
present value of such Annual Benefit (as defined in the Retirement
Agreement) of the Executive. Such present value shall be
determined on the basis of the average of the interest rates, as
reported in the Wall Street Journal as of the close of trading for
the 20 days that immediately preceded the Entitlement Date on which
the New York Stock Exchange was open for trading, of the shortest
term U.S. Treasury bond that matures at least 20 years after the
Entitlement Date. Such benefit shall be in lieu of any other
benefit payable pursuant to the Retirement Agreement.
4.2(j) Restricted Stock. Any and all Restricted Stock
----------------
issued pursuant to Section 2.4(e) of this Agreement and held by the
Executive shall vest and all restrictions be lifted as of the
Entitlement Date.
4.3 DEATH. If the Executive's employment is terminated by
reason of the Executive's death during the Term of the Agreement
(either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other than
for (i) payment of Accrued Obligations (as defined in Section
4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination), and (ii) the timely payment
or provision of Other Benefits
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(as defined in Section 4.1(c)), including death benefits pursuant to
the terms of any plan, policy, or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is terminated
by reason of the Executive's Disability during the Term of the
Agreement (either prior or subsequent to a Triggering Transaction),
this Agreement shall terminate without further obligations to the
Executive, other than for (1) payment of Accrued Obligations (as
defined in Section 4.1(a)) (which shall be paid to the Executive in
a lump sum in cash within thirty (30) days of the Date of
Termination)and (2) the timely payment or provision of Other
Benefits (as defined in Section 4.1(c) including Disability
benefits pursuant to the terms of any plan, policy or arrangement
of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If the
Executive's employment shall be terminated for Cause during the
Term of the Agreement (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive his Accrued Compensation (as defined in this
Section), If the Executive terminates employment with the Company
during the Term of the Agreement, (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations
to the Executive, other than for the payment of Accrued
Compensation (as defined in this Section) and the timely payment or
provision of Other Benefits (as defined in Section 4.1(c)). In
such case, all Accrued Compensation shall be paid to the Executive
in a lump sum in cash within thirty (30) days of the Date of
Termination.
For the purpose of this Section, the term "Accrued
Compensation" means the sum of (i) the Executives' Annual Base
Salary through the Date of Termination to the extent not previously
paid, (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), and (iii)
any accrued vacation pay in each case to the extent not previously
paid.
4.6 NON-EXCLUSIVITY OF RIGHTS: SUPERSESSION OF CERTAIN
BENEFITS. Except as provided in Sections 4.1(d) and 4.2(e) and in
this Section 4.6, nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any
contract or agreement with the Company. Amounts which are vested
benefits of which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or
agreement with, the Company at or subsequent to the Date of
Termination, shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and
except as provided in Sections 4.1(d) and 4.2(e), such amounts
shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the
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Executive regarding the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Code Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute
between the Company and the Executive (i) in the event of any
termination of the Executive's employment by the Company, whether
such termination was for Cause or Non-Performance, or (ii) in the
event of any termination of employment by the Executive, whether
Good Reason existed, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was
not made in good faith, the Company shall pay all amounts, and
provide all benefits, to the Executive and/or the Executive's
family or other beneficiaries, as the case may be, that the Company
would be required to pay or provide pursuant to Section 4.1 or 4.2
as though such termination were by the Company without Cause or by
the Executive with Good Reason; provided, however, that the
-----------------
Company shall not be required to pay any disputed amounts pursuant
to this Section except upon receipt of an undertaking by or on
behalf of the Executive to repay all such amounts to which the
Executive is ultimately adjudged by such court not to be entitled.
5. NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning on
the date this Agreement terminates and ending two(2) years
thereafter, the Executive shall not, without prior written approval
of the Board, become an officer, employee, agent, partner or
director of any business enterprise in substantial direct
competition (as defined in Section 5.1(b)) with the Company;
provided that, if the Executive is terminated by the Company
without Cause or if the Executive terminated his employment for
Good Reason, then he will not be subject to the restrictions of
this Section.
5.1(b) For purposes of Section 5.1, a business
enterprise with which the Executive becomes associated as an
officer, employee, agent, partner or director shall be considered
in substantial direct competition, if such entity competes with the
Company in any business in which the Company is engaged and is
within the Company's market area as of the date the Agreement
expires.
5.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed five
percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company
or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
15
<PAGE> 16
6. SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to
the Executive and, without the prior written consent of the
Company, the rights (but not the obligations) shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to
terminate the Agreement at his option on or after the Triggering
Transaction Date for Good Reason. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
7. MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in
the future, provide other incentive programs and bonus arrangements
to the Executive with respect to the occurrence of a Triggering
Event that will be in addition to the benefits required to be paid
in the designated circumstances in connection with the occurrence
of a Triggering Transaction. Such additional incentive programs
and/or bonus arrangements will affect or abrogate the benefits to
be paid under this Agreement only in the manner and to the extent
explicitly agreed to by the Executive in any such subsequent
program or arrangement.
7.2 NOTICE. For purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses
as set forth below; provided that all notices to the Company shall
be directed to the attention of the Chairman of the Board, or to
such other address as one party may have furnished to the other in
writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Notice to Executive:
--------------------
Don W. Hubble
Last address of knowledge to the Company
Notice to Company:
------------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
16
<PAGE> 17
7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
7.5 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any
other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.4 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive and the Company, pursuant to
the authorization from its Board, have caused this Agreement to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ DON W. HUBBLE
- --------------------------------
Don W. Hubble
ANGELICA CORPORATION
By /s/ L. F. LOEWE
-----------------------------
L. F. Loewe
Chairman, President, and CEO
17
<PAGE> 1
Exhibit 10.31
RETIREMENT BENEFIT AGREEMENT
This Agreement made this 1st day of January, 1998 by and between
Angelica Corporation, a Missouri corporation (hereinafter called "Company")
and Don W. Hubble (hereinafter called "Executive").
WHEREAS, the Executive is employed as Chairman, Chief Executive Officer
and President of Angelica Corporation; and
WHEREAS, the Company is desirous of providing certain retirement
benefits to Executive that are in keeping with his position and duties at the
Company.
NOW THEREFORE, it is agreed as follows:
1. In consideration of Executive's commencement of employment with the
Company, and for his performance and observance of his covenants and
agreements contained herein:
(a) The Company will pay Executive for his lifetime, an annual
retirement benefit (the "Annual Benefit") equal to $15,000
multiplied by the number of full calendar years the Executive is
employed by the Company, less the amount actually payable (on an
actuarially equivalent basis if appropriate) to Executive by the
Company or its affiliates then or hereafter under any other
retirement benefit plan or contract in accordance with the terms
hereof. For purposes of this Agreement, it is understood and
agreed that the Angelica Corporation Pension Plan (the "Pension
Plan") and the Angelica Corporation Supplemental Plan are
retirement benefit plans contemplated by this Section 1(a).
(b) Such Annual Benefit shall be paid in equal monthly
installments commencing the first day of the month coincident with
or immediately following Executive's retirement on or after his
sixty-fifth (65th) birthday.
(c) If the Executive is married on the date of his retirement from the
Company, instead of the Annual Benefit for his lifetime, the
Company shall pay to the Executive a Contingent Annual Benefit
which shall be equal to the Annual Benefit reduced by the same
actuarially determined contingent annuitant factor as is used to
calculate the 100% contingent annuitant benefit in the Pension
Plan. In the event the Pension Plan, or a comparable plan
offering a 100% contingent beneficiary option is not in effect on
the date of retirement, the Contingent Annual Benefit will be
calculated using the actuarial contingent annuitant factor used
for a 100% contingent annuitant benefit in the Pension Plan on
January 1, 1998. The Contingent Annual Benefit shall be payable
in equal monthly installments during the lifetime of the
Executive, starting at age 65. Upon the death of the Executive,
the Company will continue to pay the Contingent Annual Benefit to
Executive's surviving spouse during the surviving spouse's
lifetime, provided the Executive and the surviving spouse were
married for at least 12 months prior to the Executive's date of
retirement. Notwithstanding anything to the contrary herein,
Executive may elect not to receive his benefit under this
Agreement in the form of a Contingent Annual Benefit, in which
case the Company shall pay the Annual Benefit to the Executive for
his lifetime, with no benefit paid to the surviving spouse. In the
event of Executive's death prior to initiation of payment of any
benefits hereunder, the Company will pay to Executive's surviving
spouse, provided the Executive and the surviving spouse were
married for at least 12 months prior to the death of the
Executive, for her lifetime, a Contingent Annual Benefit,
calculated as set out herein, commencing
<PAGE> 2
on the first day of the month coincident with or immediately
following Executive's sixty-fifth (65th) birthday.
(d) The election to receive an Annual Benefit must be in writing on
such form or forms as the Compensation Committee of the Board of
Directors of the Company shall require and must be made within 90
days following the date of retirement. The election to waive the
Contingent Annual Benefit shall be void and of no effect unless (a)
the Executive's spouse consents in writing to the election, the
spouse's consent acknowledges the effect of such election to waive
the Contingent Annual Benefit, and the spouse's consent is
witnessed by an officer of the Company or a notary public, or (b)
it is established to the satisfaction of the Board of Directors
that the spouse's consent cannot be obtained because there is no
spouse, because the spouse cannot be located or because of such
other circumstances as the are established by the Secretary of the
Treasury for similar situations relative to plans governed by the
Employee Retirement Income Security Act of 1974 ("ERISA").
(e) With the consent of the Board of Directors of the Company,
Executive may begin to receive payments at any time after he has
reached age 60 (provided he is no longer employed by the Company),
but in any such case the Annual Benefit (or Contingent Annual
Benefit if appropriate) will be discounted by three percent (3%)
for each full year that the Executive's age is less than 65.
2. In the event Executive becomes totally and presumably permanently
disabled while still employed by the Company, Executive shall be entitled to
receive, upon reaching age 65, the Annual Benefit, or Contingent Annual
Benefit, as appropriate, that he would have received had he continued to be
actively and continuously employed by the Company until attaining age 65. In
the event the Executive dies after becoming disabled, but before he starts to
receive Annual Benefits or Contingent Annual Benefits, the Executive's spouse
shall receive the contingent Annual Benefit as set out in Section 1(d) above,
calculated as if the Executive had been actively employed through the date of
death.
For the purposes hereunder, Executive shall be considered to be totally
and presumably permanently disabled if he is unable to perform the duties of
his position because of a physical or mental impairment which can be expected
to result in death or to be a long continued or indefinite duration, as
conclusively determined by a competent doctor selected by the Executive and
approved by the Company, who shall certify the results of his examination to
the Company. The Company may require Employee, if he has not reached age 65,
to be re-examined from time to time, not more frequently than once each
calendar year, to determine whether the Executive has recovered from
disability. For purposes of this Agreement, it is understood and agreed
that Executive shall be determined to be totally and permanently disabled if
he is determined to be so by the Company's long term disability carrier or by
the Social Security Administration.
If the Executive recovers from disability prior to age 65, and the
Executive is reemployed by the Company, Executive shall be treated, for
purposes of this Agreement, as if he had been continuously and actively
employed by the Company during the period of disability. If the Executive
recovers from disability prior to age 65 and is not reemployed by the
Company, Executive shall be treated for purposes of this Agreement, as if he
had been continuously and actively employed during the period of disability,
such employment terminating upon recovery from disability.
<PAGE> 3
3. It is agreed that for a period of two years following the termination of
Executive's employment with the Company, Executive shall not, without prior
written approval of the Board, become an officer, employee, agent partner or
director of any business enterprise in substantial direct competition with
the Company. For purposes of this Section 3, a business enterprise with
which the Executive becomes associated as an officer, employee, agent partner
or director shall be considered in substantial direct competition if such
entity competes with the Company in any business in which the company is
engaged and is within the Company's market area as of the date the Employment
Period expires. The above constraint shall not prevent the Executive from
making passive investments, not to exceed five percent (5%), in any
enterprise.
If the Board of Directors of the Company determines that Employee has
(or may have) violated the agreements set out in this Section 3, (i) all
payments to Executive, or to Executive's surviving spouse, under this
Agreement shall immediately cease and (ii) the company and Executive
recognizing that Executive's employment with the company has been, by virtue
of Executive's abilities, knowledge and training, unique and extraordinary,
in the event of Executive's breach of the provision of the Agreement, company
shall be entitled to injunctive or equitable relief in addition to all other
remedies available to it, since its remedy at law would be inadequate. Such
board shall not make such a determination without first having offered
Executive an opportunity to be heard concerning the alleged default.
4. If within one year from the effective date of this Agreement, the
Executive dies by suicide (as determined by the Company's Life Insurance
carrier) then no payment at all shall be payable under this Agreement to a
surviving spouse. Further, if within two years from the effective date of
this Agreement the Executive dies and the Company's life insurance carrier
rescinds, modifies or denies claim of any life policy issued by it in
conjunction with the Company's death benefit, based on material
misrepresentation in the application for any such life insurance by
Executive, then the Contingent Annual Benefits hereunder will immediately
cease.
5. In the event the Company shall elect to purchase a life insurance
contract or contracts on the life of the Executive, the Company shall at all
times be the sole and complete owner of such life insurance contract or
contracts and the sole beneficiary thereof, and shall have the full and
unrestricted right to use or exercise all values, privileges and options
available thereunder as it may desire, without the knowledge or consent of
any other person or persons, it being expressly understood and agreed that
notwithstanding any of the terms, provisions or conditions of this Agreement,
neither the Executive nor any other person, persons, executors or
administrators shall have the right, title or interest whatsoever in or to
any such life insurance contract or contracts.
6. Neither the Executive, Executive's surviving spouse or any other person
claiming through or under him shall have any right to commute, encumber, or
dispose of the right to receive payments hereunder, all of which payments and
the right thereto are expressly declared to be non-assignable; and in the
event of any attempted assignment or other disposition, the Company shall
have no further liability hereunder.
7. This agreement shall be binding on and inure to the benefit of any
successor of the Company, including but not limited to, any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise acquires all or substantially all of the assets or
business of the Company.
8. Company agrees to reimburse Employee for any attorneys fees or cost of
collection incurred to enforce payment under the terms of this Agreement.
<PAGE> 4
9. If the Executive's employment is terminated for Cause (as such term is
defined in the Employment Agreement dated Dec. 12, 1997, by and between
Executive and the Company (the "Employment Agreement") this Agreement shall
terminate without further obligations to the Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement at St. Louis,
Missouri, on the date first above written.
ANGELICA CORPORATION
("Company")
by: /s/ Leslie F. Loewe
------------------------------------
DON W. HUBBLE
("Executive")
/s/ Don W. Hubble
---------------------------------------
<PAGE> 1
Exhibit 10.32
ANGELICA CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
----------------------------
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.
Name of Optionee: DON W. HUBBLE
Number of Shares Subject to Option: 100,000
Option Price/Base Price Per Share: $21.9375
Grant Date of Option: JANUARY 2, 1998
Expiration Date of Option: JANUARY 2, 2005
Table Regarding Exercisability:
<TABLE>
<CAPTION>
LOT NUMBER DATE OF FIRST
NO. OF SHARES EXERCISABILITY
--- --------- --------------
<S> <C> <C>
1 33,333 JANUARY 2, 1999
2 33,333 JANUARY 2, 2000
3 33,334 JANUARY 2, 2001
</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 /s/ Earle H. Harbison, Jr. /s/ Don W. Hubble
---------------------------------- -------------------------------
Chairman of the Compensation Don W. Hubble, Optionee
and Organization Committee
<PAGE> 2
ANGELICA CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement (hereinafter "Agreement")
dated as of the 2nd day of January 1998, represents the agreement regarding
the grant of a stock option by and between Angelica Corporation (hereinafter
"Company") and Don W. Hubble (hereinafter "Optionee").
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 an exercise price per share, both as reflected in the
cover page, in the manner and subject to the conditions provided
herein. This option is not intended to be an Incentive Stock Option
("ISO"), as defined in Section 422 of the Internal Revenue Code of
1986, as amended.
2. TIME OF FIRST EXERCISABILITY 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 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 on the date of the Optionee's
termination of employment due to death or Disability or (b) if any of
the events set forth in the first paragraph of Section 4.2 of
Optionee's Employment Agreement Dated December 12, 1997 (the
"Employment Agreement") occurs, then the Option will be exercisable in
full by Optionee as of the Entitlement Date (as defined in the
Employment Agreement). In each of the above-described circumstances,
the Option shall continue to be exercisable until such Option
terminates pursuant to the applicable provision of Section 3.b. of
this Agreement.
3. INCORPORATION OF STOCK PLAN. The following material terms are
applicable to this Option:
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 (i) in cash, or (ii) in the
discretion of the Compensation Committee, by either (1) the delivery
to Company of shares of Common Stock then owned by Optionee having a
fair market value equal to the aggregate exercise price of all
shares of Common Stock subject to such exercise, or (2) the
direction to Company to withold 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 aggregate exercise price of all shares
of Common Stock subject to such exercise, or (3) by any combination
of (i) and (ii)(1) or (ii)(2) hereof.
B. TERMINATION OF OPTION. This Option shall terminate in all
events on the
<PAGE> 3
earliest of
(i) January 2, 2005, or
(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 due to death, or
(iv) the later of twelve months after the date on which
Optionee ceases to be an employee of the Company due to
Disability or, if Optionee dies within the twelve-month
period after his termination of employment due to
Disability, 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 to a Permissible Transferee (as
defined below), 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 defined below), as applicable, may
exercise this Option. For purposes of this Agreement, the term
"Permissible Transferee" shall mean: (i) one or more members of
Optionee's immediate family, (ii) one or more trusts for the
benefit of Optionee and one or more members of Optionee's
immediate family; or (iii) one or more partnerships (general or
limited), corporations, limited liability companies or other
entities in which the aggregate interests of the Optionee and
members of the Optionee's immediate family exceeds 80% of all
interests. For purposes of this definition, "immediate family"
consists of Optionee's spouse, children and grandchildren. For
purposes of this Agreement, the term "Post-Death Representative"
shall mean the administrator, executor or personal
representative of Optionee's estate or the heirs or distributees
of optionee's assets after Optionee's death, either by will or
the laws of decent and distribution.
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 exercise price per share, to the end that Optionee
shall retain Optionee's proportionate interest without change in
the total exercise price under this Option.
4. TAXES. The Company shall be entitled to withhold the amount of any tax
attributable to any amounts payable or share deliverable under this
Agreement after
<PAGE> 4
giving the person entitled to receive such payment or delivery notice as
far in advance as practicable, and the Company may defer making payment
or delivery under this Agreement if any such tax is payable until
arrangements with respect to the withholding of applicable taxes is made
to the Company's satisfaction. The person entitled to any such payment
or delivery may, by notice to the Company at the time the requirement for
such payment or delivery is first established, elect to have such
withholding satisfied by the reduction in the number of shares otherwise
so deliverable pursuant to this Agreement, such reduction to be
calculated based upon the closing market price of the Company's Common
Stock as reported on the NYSE Composite Tape on the date of such notice.
5. TENURE. Optionee's right, if any, to continue to serve the Company
and its subsidiaries as an officer, employee, director or otherwise,
shall not be enlarged or otherwise affected by his designation as an
Optionee under this Agreement.
6. AMENDMENT AND MODIFICATION. The terms and conditions applicable to
this Agreement may be amended or modified only by the mutual agreement
of the Company or such other person as may then have an interest
therein.
7. 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
Exhibit 10.33
ANGELICA CORPORATION
FORM 10-K FOR FISCAL YEAR ENDED
JANUARY 31, 1998
SCHEDULE
This schedule is included pursuant to Instruction 2 of Item 601(a) of
Regulation S-K for the purpose of setting forth the material details of a
grant of restricted stock to Don W. Hubble on January 2, 1998:
Don W. Hubble received, upon accepting the position as Chief Executive Officer
of Angelica Corporation on January 1, 1998, a grant of 25,000 shares of
restricted Common Stock. The shares vest over a period of three years and
are forfeitable if Mr. Hubble leaves for reasons other than death or disability
prior to the expiration of the vesting period.
<PAGE> 1
Exhibit 10.34
CONSULTING AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of February, 1998, by and
between Angelica Corporation (hereinafter referred to as "Client") and Leslie
F. Loewe (hereinafter referred to as "Consultant").
1. Consultant agrees to supply to Client assistance, advice and counsel
relative to such issues and/or projects as are assigned by Client. This
Agreement shall be for a term beginning January 1, 1998 and ending on June
30, 1998.
2. Client shall pay to Consultant for his services the sum of $5,000 per
month. Client shall reimburse Consultant for all reasonable out-of-pocket
expenses, with daily itemization supporting such expenses.
3. Consultant agrees to maintain in confidence and not use for his own
purposes or those of others, any information which is disclosed to Consultant
during the performance of any services under this Agreement, and which
Consultant knows, or has good reason to know, deals with data, information,
and/or activities of Client not generally known to the public. This
obligation of confidentiality and non-use shall remain in effect for such
time as said information remains unknown to the public and shall survive the
termination of this Agreement. Unless otherwise agreed in writing between
the parties prior to disclosure, all information given by Consultant to
Client is given on a strictly non-confidential basis with no obligation of
any kind imposed on Client.
Any and all inventions, ideas and other original work product relating
to Consultant's activities for Client, whether patentable or not, which are
conceived or reduced to practice by Consultant during the performance of any
services under this Agreement, shall be the exclusive property of Client. No
item furnished to Consultant or plans, designs, specifications or other
material which have been specifically designed for or by Client shall be
duplicated or furnished to others without prior written consent of Client.
4. It is hereby agreed by the parties hereto, that all data accumulated,
compiled, prepared or generated by Consultant, or provided by Consultant, or
provided Consultant by Client, including but not limited to work papers,
files, designs, customer lists, diagrams, reports, etc. dealing with the
services rendered by Consultant hereunder, shall be the sole property of
Client and upon termination hereof, for any reason whatsoever, Consultant
will deliver to Client all such papers and documents. Client also reserves
the right during the term of the Agreement, to review and copy any and all
data referred to above.
5. It is understood and agreed that Consultant is not an agent or employee
of Client for any purpose whatsoever, but is an independent contractor.
IN WITNESS WHEREOF, this Agreement is executed by the parties hereto as
of the date first above written.
"CONSULTANT" "CLIENT"
LESLIE F. LOEWE ANGELICA CORPORATION
/s/ Leslie F. Loewe By: /s/ Donald W. Hubble
- -------------------------- ----------------------------
Title: Chief Executive Officer
<PAGE> 1
Exhibit 10.35
FIRST AMENDMENT TO THE
ANGELICA CORPORATION
1994 NON-EMPLOYEE DIRECTORS STOCK PLAN
The Angelica Corporation 1994 Non-Employee Directors Stock Plan is
hereby amended, effective as of January 27, 1998, in the following
particulars:
1. Article 1.4(aa) is hereby amended in its entirety to read as follows:
RETAINER DATE means the date on which a Retainer payment is payable
to a Non-Employee Director, which shall be November 29, 1994 for the Retainer
payment for the initial Plan Year and the date of the Annual Meeting for
subsequent Plan Years, provided, however, that if a Non-Employee Director is
first elected to the Board on a date other than the date of the Annual
Meeting, the Retainer Date for the then current Plan Year shall be the date
he or she commences to serve as a new Non-Employee Director.
IN WITNESS WHEREOF, the Company has caused this amendment to be executed by
its duly authorized officer this 27th day of January, 1998.
ANGELICA CORPORATION
By: /s/ Don W. Hubble
---------------------------------------
Chairman of the Board,
President and Chief Executive Officer
<PAGE> 1
Exhibit 10.36
FIFTEENTH AMENDMENT
TO
ANGELICA CORPORATION
RETIREMENT SAVINGS PLAN
WHEREAS, Angelica Corporation, a corporation duly organized and existing
under the laws of the State of Missouri (hereinafter the "Company"),
established and continues to maintain the Angelica Corporation Retirement
Savings Plan (hereinafter the "Plan"); and
WHEREAS, effective April 1, 1997, the Company desires to make certain
amendments to the Plan.
NOW, THEREFORE, the Plan is hereby amended, effective April 1, 1997, in
the following respects:
I.
Section 1.31 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"1.31. `Valuation Date' shall mean any business day that the New York
Stock Exchange is open for trading. The Administrator, in its
sole discretion, may declare a special valuation date as of any
day within the Plan Year."
II.
Section 7.1 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"7.1. The Funds shall be valued by the Trustee at their respective
fair market values on each Valuation Date. Participants'
Accounts in each Fund shall be adjusted to reflect transactions
for their accounts and, pro rata, the effect of income
collected and accrued, realized and unrealized profits and
losses, and expenses since the previous Valuation Date."
III.
The first two sentences of Section 9.3 are hereby deleted in their
entirety and the following are substituted in lieu thereof:
"Subject to the provisions of Sections 9.5, 9.7, 9.8 and 9.9,
every distribution shall be made as soon as is administratively
feasible after, but as of, the end of the month which ends on
or after the date on which the Administrator learns that an
event
<PAGE> 2
requiring distribution has occurred, and the identity or
identities or location(s) of the party or parties entitled to
such distribution; provided, however if such distribution to a
Participant is greater than $3,500 and the date of distribution
is prior to the Participant's Mandatory Benefit Distribution
Date, the Participant must consent to the distribution. In the
event the Participant does not consent to such distribution
prior to his Mandatory Benefit Distribution Date, distribution
shall be made to such Participant and without his consent on
the earlier of (i) as soon as is administratively feasible
after, but as of, the end of the month which ends on or after
the date such Participant consents in writing to the
Administrator to such distribution, or (ii) his Mandatory
Benefit Distribution Date."
IV.
Section 10.4 of the Plan is hereby deleted in its entirety and the
following shall be substituted in lieu thereof:
"10.4. The Administrator shall prescribe rules and procedures for the
administration of a loan program which shall be administered by
the Administrator on a uniform and nondiscriminatory basis."
V.
Section 11.2 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"11.2. Each Participant's Rollover Account shall be increased or
decreased with its proportionate share of the balance of any
changes in the value of the Trust Fund as of each Valuation
Date. Rollover Amounts transferred to the Plan shall be
credited to a Participant's Rollover Account."
VI.
The following is hereby added to Section 15.7.B. of the Plan which
shall read as follows:
"The provisions of paragraph A of this Section 15.7 shall not
apply to the creation, assignment or recognition of a right to
any benefit payable with respect to a Participant pursuant to a
qualified domestic relations order as defined in Code Section
414(p). Payment of benefits to an alternate payee under a
qualified domestic relations order meeting the requirements of
Code Section 414(p) shall be made on the earliest date allowed
- 2 -
<PAGE> 3
under the domestic relations order, which date may be prior to
the time the Participant would be eligible to receive a
distribution under the terms of the Plan."
IN WITNESS WHEREOF, the Company has executed this Fifteenth Amendment
and affixed its corporate seal hereto by it duly authorized officer on this
26th day of August, 1997.
- ---- ------
ANGELICA CORPORATION
By /s/ Leslie F. Loewe
----------------------------------------
Chairman of the Board,
President and Chief Executive Officer
[SEAL]
WITNESSED BY:
/s/ Jill Witter
- -------------------------------
Secretary
- 3 -
<PAGE> 1
FINANCIAL REVIEW
FINANCIAL CONDITION
Working capital of $142.0 million and a current ratio of 2.6 to 1 at the end
of fiscal 1998 were moderately lower than working capital of $163.0 million
and a current ratio of 3.3 to 1 at the prior year end, due principally to
higher short-term debt levels and the write down of inventory in connection
with the restructuring and other charges taken in the third quarter (see
below). However, the Company's financial condition remained strong. Current
assets decreased $3.0 million during fiscal 1998. This included an increase
of $2.9 million in receivables (with days outstanding unchanged at 61) and a
decrease of $7.4 million in inventories, with all of the inventory decrease
being the result of the restructuring.
Current liabilities rose $18.0 million compared with year end fiscal
1997, with $11.7 million of the increase being due to higher short-term debt.
Long-term debt was down marginally as a result of sinking fund payments
offset by debt assumed in an acquisition, and shareholders' equity was $15.1
million lower than last year end principally due to the restructuring. The
ratio of long-term debt to total long-term debt and equity was 35.7 percent
at fiscal 1998 year end compared with 34.0 percent the prior year, with the
increase being due to lower equity resulting from the restructuring.
Cash flow remained strong in fiscal 1998, as $26.0 million was
generated by operations versus $17.4 million in the prior year. Cash used in
investing activities of $28.7 million was $2.1 million lower than the prior
year. Included in investing activities, capital expenditures remained
relatively high at $21.3 million, as the program to construct three new
textile services plants to replace five existing plants was completed in
fiscal 1998. Acquisition expenditures of $23.6 million in fiscal 1998
included the purchase at mid year of the Las Vegas textile services plant and
land, which had been leased, for the purpose of selling that business; that
sale was completed at the beginning of the fourth quarter of fiscal 1998.
Cash flow of a net $3.4 million provided by financing activities included
additional short-term debt of $11.7 million offset by long-term debt sinking
fund payments and $8.8 million of dividends paid.
At the end of the third quarter of fiscal 1998, the Company recorded
restructuring and other charges of $23.2 million pretax. These charges
consisted of inventory writedowns of $1.0 million included in cost of textile
services and $7.5 million included in cost of goods sold, and of other
charges totaling $14.7 million included in restructuring charge. The
restructuring charge related primarily to the consolidation, closing and sale
of certain Textile Services and Manufacturing and Marketing plants.
Of the total charges, $8.8 million related to the Textile Services segment,
$13.0 million to the Manufacturing and Marketing segment, and $1.4 million
were for certain corporate costs. These charges included writedowns to the
carrying values of plants closed and other assets, and the accrual of
severance costs associated with the related elimination of personnel.
The restructuring charge was composed of $2.4 million in cash expenditures
and $12.3 million in reduction of asset carrying values.
The Company's Year 2000 compliance efforts consist of evaluating
internal technical and applications software and replacing or renovating
systems and applications as necessary to assure such compliance. These
efforts are scheduled for initial completion by the end of 1998, which will
allow for testing and evaluating compliance by external companies' systems
that interact with those of the Company. Company employees, assisted by
external consultants where necessary, staff the Year 2000 compliance effort,
which is being monitored by senior management as well as the Audit Committee.
The costs related to the Year 2000 compliance efforts, approximately half of
which have already been incurred, are expensed as incurred, and amounts
associated with newly purchased software are capitalized. In the aggregate,
such costs have not been and are not expected to be material to the financial
results or operations of the Company.
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 1998 OPERATIONS
COMPARED TO 1997
Combined sales and textile service revenues in fiscal 1998 were $526.5
million, an increase of $37.3 million or 7.6 percent over the prior year.
Part of the increase was due to fiscal 1998 having 53 weeks, whereas fiscal
1997 had 52 weeks. Excluding acquisitions, the increase would have been 4.0
percent. In the Textile Services segment, revenues increased $25.6 million or
9.8 percent as a result of the California co-op acquisition early in fiscal
1998 plus modest price increases received on new and renewal contracts during
the year. Manufacturing and Marketing segment sales, before deduction for
intersegment sales, were $4.1 million or 2.3 percent higher than the prior
year, with most of the increase resulting from the 53rd week in fiscal 1998.
Sales of Life Retail Stores increased 8.7 percent or $6.8 million due largely
to acquisitions, a 2.3 percent increase in same-store sales and the 53rd week
in fiscal 1998.
16 Angelica Corporation and Subsidiaries
<PAGE> 2
Excluding the effect of the restructuring and other charges, the gross
profit percent to combined sales and textile service revenues was unchanged
at 25.6 percent. Gross margins in the Textile Services segment increased due
to the price increases received plus more efficient plant operations during
the year. In the Life Retail Stores segment, gross margins were approximately
the same as the prior year. Gross margins in the Manufacturing and Marketing
segment were down in fiscal 1998 versus the prior year due principally to a
six-month strike suffered at two manufacturing plants.
Selling, general and administrative expenses increased $8.9 million or
8.9 percent in fiscal 1998 compared with fiscal 1997. However, the percent of
those expenses to combined sales and textile service revenue increased only
slightly, with much of that increase related to consulting fees incurred
during the year. Interest expense of $10.7 million in fiscal 1998 increased
from $9.6 million in the prior year due to higher short-term debt levels. The
effective tax rate of 38.0 percent in fiscal 1998 was unchanged from the
prior year.
ANALYSIS OF FISCAL 1997 OPERATIONS
COMPARED TO 1996
Combined sales and textile service revenues were $489.2 million in fiscal
1997, an increase of $2.2 million over the prior year. Excluding
acquisitions, there would have been a decline of 2.9 percent. For the Textile
Services segment, revenues increased by $6.5 million or 2.5 percent, with all
of the increase resulting from acquisitions. Sales of the Manufacturing and
Marketing segment, before deduction for intersegment sales, were $4.2 million
or 2.3 percent lower than the prior year. Without the effect of acquisitions,
sales would have been 4.0 percent lower than the prior year. Sales of Life
Retail Stores rose $6.1 million or 8.4 percent in fiscal 1997 due to
acquisitions and a 4.0 percent same-store sales increase.
The gross profit percent to combined sales and textile service revenues
in fiscal 1997 was 25.6 percent, down from 26.2 percent in the prior year.
Gross margins in the Textile Services segment were down due to continued
margin pressures in the healthcare markets and significantly increased linen
amortization expense, which has been adversely affected by healthcare
customers resisting the industry practice of paying for lost and misused
linens. The inability to collect loss charges increases linen amortization
expense and reduces gross margin. Margins of Life Retail Stores remained
approximately the same as the prior year.
Selling, general and administrative expenses in fiscal 1997 were only
$0.7 million or 0.7 percent higher than the prior year and remained the same
percent to combined sales and textile service revenues. Interest expense of
$9.6 million in fiscal 1997 compared with $9.1 million in the prior year,
reflecting new short-term borrowing. The effective tax rate in fiscal 1997
was 38.0 percent, slightly lower than an effective tax rate of 38.5 percent
in the preceding year.
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 1998 and fiscal 1997 were as follows:
<TABLE>
<CAPTION>
Fiscal 1998 Fiscal 1997
------------------------------------- ------------------------------------
High Low Dividend High Low Dividend
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Quarter $19 7/8 $15 3/4 $.24 $22 3/4 $20 $.24
Second Quarter 19 9/16 15 3/4 .24 25 1/8 20 1/8 .24
Third Quarter 21 17 1/2 .24 22 1/2 18 3/4 .24
Fourth Quarter 23 5/8 19 .24 20 3/4 18 1/8 .24
===============================================================================================================================
</TABLE>
Angelica Corporation and Subsidiaries 17
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
For Years Ended January 31, January 25, January 27,
(Dollars in thousands, except per share amounts) 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Textile service revenues $286,886 $261,349 $254,893
Net sales 239,638 227,870 232,121
- ------------------------------------------------------------------------------------------------------------------
Combined sales and textile service revenues 526,524 489,219 487,014
- ------------------------------------------------------------------------------------------------------------------
Cost of textile services (Note 7) 234,797 215,809 205,486
Cost of goods sold (Note 7) 165,595 148,127 154,054
- ------------------------------------------------------------------------------------------------------------------
400,392 363,936 359,540
- ------------------------------------------------------------------------------------------------------------------
Gross profit 126,132 125,283 127,474
Selling, general and administrative expenses 109,114 100,216 99,481
Restructuring charge (Note 7) 14,684 -- 14,145
- ------------------------------------------------------------------------------------------------------------------
Income from operations 2,334 25,067 13,848
Interest expense (10,702) (9,588) (9,104)
Other expense, net (2,758) (2,541) (2,889)
- ------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (11,126) 12,938 1,855
Provision (benefit) for income taxes (4,228) 4,916 714
- ------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (6,898) $ 8,022 $ 1,141
==================================================================================================================
Basic and diluted earnings (loss) per share $ (.75) $ .88 $ .13
==================================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
18 Angelica Corporation and Subsidiaries
<PAGE> 4
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
January 31, January 25,
(Dollars in thousands) 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 2,833 $ 2,122
Receivables, less reserves of $2,510 and $2,645 69,465 66,632
Inventories 104,091 111,456
Linens in service 42,622 47,544
Prepaid expenses 4,634 4,658
Income taxes 5,766 --
- ------------------------------------------------------------------------------------------------------------------------
Total Current Assets 229,411 232,412
- ------------------------------------------------------------------------------------------------------------------------
Property and Equipment:
Land 6,428 5,149
Buildings and leasehold improvements 74,789 75,466
Machinery and equipment 137,100 134,429
Capitalized leased property 1,514 1,849
- ------------------------------------------------------------------------------------------------------------------------
219,831 216,893
Less -- reserve for depreciation 111,638 114,063
- ------------------------------------------------------------------------------------------------------------------------
108,193 102,830
- ------------------------------------------------------------------------------------------------------------------------
Other:
Goodwill 7,533 7,951
Other acquired assets 9,082 8,814
Cash surrender value of life insurance 16,485 14,455
Miscellaneous 8,005 7,642
- ------------------------------------------------------------------------------------------------------------------------
41,105 38,862
- ------------------------------------------------------------------------------------------------------------------------
Total Assets $378,709 $374,104
========================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt $ 27,100 $ 15,400
Current maturities of long-term debt 3,287 2,689
Accounts payable 21,980 21,551
Accrued wages and other compensation 9,284 8,444
Other accrued liabilities 25,761 19,893
Income taxes -- 1,420
- ------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 87,412 69,397
- ------------------------------------------------------------------------------------------------------------------------
Long-Term Debt, less current maturities 96,742 97,417
- ------------------------------------------------------------------------------------------------------------------------
Other:
Deferred compensation and other payments 15,027 14,137
Deferred income taxes 5,420 3,912
- ------------------------------------------------------------------------------------------------------------------------
20,447 18,049
- ------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity:
Common Stock, $1 par value, authorized 20,000,000 shares, issued: 9,471,538 shares 9,472 9,472
Capital surplus 4,196 4,196
Retained earnings 170,098 186,438
Translation adjustment (2,162) (1,763)
Common Stock in treasury, at cost: 293,482 and 340,699 shares (7,496) (9,102)
- ------------------------------------------------------------------------------------------------------------------------
174,108 189,241
- ------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $378,709 $374,104
========================================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
Angelica Corporation and Subsidiaries 19
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
For Years Ended January 31, January 25, January 27,
(Dollars in thousands) 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK ($1 PAR VALUE)
Balance beginning of year $ 9,472 $ 9,472 $ 9,471
Exercise of stock options -- -- 1
- ------------------------------------------------------------------------------------------------------------------------
Balance end of year $ 9,472 $ 9,472 $ 9,472
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL SURPLUS
Balance beginning of year $ 4,196 $ 4,196 $ 4,179
Exercise of stock options -- -- 30
Redemption of preferred stock -- -- (13)
- ------------------------------------------------------------------------------------------------------------------------
Balance end of year $ 4,196 $ 4,196 $ 4,196
- ------------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance beginning of year $186,438 $187,328 $194,849
Net income (loss) (6,898) 8,022 1,141
Cash dividends (8,785) (8,780) (8,683)
Exercise of stock options/stock awards (657) (132) 21
- ------------------------------------------------------------------------------------------------------------------------
Balance end of year $170,098 $186,438 $187,328
- ------------------------------------------------------------------------------------------------------------------------
TRANSLATION ADJUSTMENT
Balance beginning of year $ (1,763) $ (2,439) $ (2,290)
Change in cumulative adjustment (399) 676 (149)
- ------------------------------------------------------------------------------------------------------------------------
Balance end of year $ (2,162) $ (1,763) $ (2,439)
- ------------------------------------------------------------------------------------------------------------------------
COMMON STOCK IN TREASURY, AT COST
Balance beginning of year $ (9,102) $ (9,027) $ (9,549)
Treasury stock purchased -- (671) --
Exercise of stock options/stock awards 1,682 631 541
Other changes during year (76) (35) (19)
- ------------------------------------------------------------------------------------------------------------------------
Balance end of year $ (7,496) $ (9,102) $ (9,027)
- ------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, END OF YEAR $174,108 $189,241 $189,530
========================================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
20 Angelica Corporation and Subsidiaries
<PAGE> 6
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
For Years Ended January 31, January 25, January 27,
(Dollars in thousands) 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (6,898) $ 8,022 $ 1,141
Non-cash items included in net income( loss):
Depreciation 13,733 13,415 13,797
Amortization of acquisition costs 3,589 3,460 3,997
Restructuring and other charges 23,247 -- 14,145
Change in working capital components,
net of businesses acquired:
Receivables, net (2,772) 629 4,232
Inventories and linens in service 6,905 (11,326) (3,845)
Prepaid expenses (426) (468) 1,294
Accounts payable 267 4,305 (2,927)
Compensation and other accruals (2,888) 3,035 2,488
Income taxes (7,186) 1,103 (4,966)
Cash surrender value of life insurance (2,030) (1,860) (1,678)
Other, net 508 (2,870) (619)
- ------------------------------------------------------------------------------------------------------------------------
Net cash flow provided by operating activities 26,049 17,445 27,059
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property and equipment, net (21,338) (23,603) (8,760)
Cost of businesses acquired (23,624) (7,160) (10,643)
Disposition of property 16,236 -- --
- ------------------------------------------------------------------------------------------------------------------------
Net cash flow used in investing activities (28,726) (30,763) (19,403)
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt -- -- 30,000
Proceeds from issuance of short-term debt 11,700 15,400 --
Debt assumed in acquisition 3,026 -- 3,131
Long-term and short-term debt repayments (3,103) (2,678) (23,698)
Dividends paid (8,785) (8,780) (8,683)
Other, net 550 469 412
- ------------------------------------------------------------------------------------------------------------------------
Net cash flow provided by financing activities 3,388 4,411 1,162
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and short-term investments 711 (8,907) 8,818
Cash and short-term investments at beginning of year 2,122 11,029 2,211
- ------------------------------------------------------------------------------------------------------------------------
Cash and short-term investments at end of year $ 2,833 $ 2,122 $ 11,029
========================================================================================================================
Supplemental cash flow information:
Income taxes paid $ 1,272 $ 2,826 $ 5,615
Interest paid $ 10,515 $ 9,627 $ 8,644
========================================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
Angelica Corporation and Subsidiaries 21
<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
healthcare institutions and to a limited extent to hotels, 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 healthcare
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.
Fiscal year 1998 included 53 weeks; fiscal years 1997 and 1996 included
52 weeks.
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. Actual
results may vary from these estimates.
FOREIGN CURRENCY TRANSLATION
The Company accounts for foreign currency translation in accordance with
Statement of Financial Accounting Standards (SFAS) 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) 1998 1997
- ------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 25,577 $ 30,961
Work in process 6,811 6,366
Finished goods 71,703 74,129
- ------------------------------------------------------------------------
$104,091 $111,456
========================================================================
</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.
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 seven years.
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.
EARNINGS PER SHARE
The Company has adopted SFAS No. 128 for all periods. Basic earnings per
share is computed by dividing net income by the weighted average number of
shares of Common Stock outstanding during the year. Diluted earnings per
share is computed by dividing the net income applicable to Common
shareholders by the weighted average number of Common and Common equivalent
shares outstanding. The following table reconciles weighted average shares
outstanding to amounts used to calculate basic and diluted earnings per share
for fiscal years 1998, 1997 and 1996:
<TABLE>
<CAPTION>
(Dollars and shares in thousands,
except per share amounts) 1998 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Average shares outstanding 9,151 9,143 9,139
Effect of dilutive securities --
option shares 2 14 1
- ------------------------------------------------------------------------------
Average shares outstanding,
adjusted for dilutive effects 9,153 9,157 9,140
==============================================================================
Net income (loss) $(6,898) $8,022 $1,141
Basic earnings (loss)
per share (.75) .88 .13
Diluted earnings (loss)
per share (.75) .88 .13
- ------------------------------------------------------------------------------
</TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For purposes of the Consolidated Statements of Cash Flows, the Company
considers short-term, highly liquid investments
22 Angelica Corporation and Subsidiaries
<PAGE> 8
(securities with an original maturity date of less than three months) as cash
equivalents.
LONG-LIVED ASSETS
In accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of, the Company periodically
assesses the carrying value of its long-lived assets and recognizes
impairment losses if it is determined the carrying values are not recoverable.
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) 1998 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost (benefits earned
during the year) $ 706 $ 697 $ 536
Interest cost on projected
benefit obligation 1,179 1,050 1,034
(Increase) decrease in
value of assets (2,752) (1,681) (3,089)
Net amortization and deferrals 1,640 676 2,106
- ------------------------------------------------------------------------------
Net pension expense $ 773 $ 742 $ 587
==============================================================================
</TABLE>
The funded status of the plan and the net pension liability at
January 1, 1998 and January 1, 1997 were as follows:
<TABLE>
<CAPTION>
January 1, January 1,
(Dollars in thousands) 1998 1997
- -----------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefits $(15,587) $(14,459)
Nonvested benefits (237) (158)
- -----------------------------------------------------------------------------
Accumulated benefit obligation (15,824) (14,617)
Effect of projected future
compensation levels (2,038) (2,115)
- -----------------------------------------------------------------------------
Projected benefit obligation (17,862) (16,732)
Plan assets at fair value, primarily
listed stocks and
Government securities 18,787 16,844
- -----------------------------------------------------------------------------
Plan assets more than projected
benefit obligation 925 112
Unrecognized obligation at transition 1,050 1,184
Unrecognized net gains (4,220) (2,948)
Unrecognized prior service cost 210 230
- -----------------------------------------------------------------------------
Net pension liability $ (2,035) $ (1,422)
=============================================================================
</TABLE>
In determining the projected benefit obligation, the following actuarial
assumptions were used:
<TABLE>
<CAPTION>
1998 1997
- -----------------------------------------------------------------------------
<S> <C> <C>
Discount rate 7.00% 7.25%
Compensation increase rate 6.00% 6.00%
Long-term rate of return 8.50% 8.50%
=============================================================================
</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
1998 and 1997:
<TABLE>
<CAPTION>
(Dollars in thousands) 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
Average amount of short-term debt
during the year $29,792 $5,717
Weighted average interest rate:
During the year 5.80% 5.57%
At year end 5.88% 5.42%
==============================================================================
</TABLE>
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
10.2% notes to insurance company,
due annually to 2004 $ 37,375 $ 39,375
9.15% notes to insurance
companies, due 2001 25,000 25,000
8.225% notes to insurance
companies, due 2006 30,000 30,000
6.84% note to bank, due quarterly to 1999 2,845 2,977
76% of prime rate industrial development
revenue bond, due quarterly to 2000 1,238 1,687
Other long-term debt including
obligations under capital leases 3,571 1,067
- ------------------------------------------------------------------------------
100,029 100,106
Less -- current maturities 3,287 2,689
- ------------------------------------------------------------------------------
$ 96,742 $ 97,417
==============================================================================
</TABLE>
The most restrictive of the Company's loan agreements require that the
Company maintain a minimum of $160,000,000 in consolidated net worth, as
defined. As of January 31, 1998, the balance was $174,108,000.
Aggregate maturities of long-term debt for each of the four years
subsequent to January 30, 1999, are $5,831,000, $3,014,000, $27,677,000 and
$6,662,000, 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 31, 1998 and January 25, 1997 was approximately
$112,350,000 and $110,260,000, respectively.
Angelica Corporation and Subsidiaries 23
<PAGE> 9
4. INCOME TAXES
The provision (benefit) for income taxes consisted of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) 1998 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $(2,940) $2,168 $4,045
State (490) 551 155
Foreign 487 240 (322)
Deferred (1,285) 1,957 (3,164)
- ------------------------------------------------------------------------------
$(4,228) $4,916 $ 714
==============================================================================
</TABLE>
Reconciliation between the statutory income tax rate and effective tax
rate is summarized below:
<TABLE>
<CAPTION>
1998 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.0% 35.0% 35.0%
State tax, net of Federal benefit 3.4 3.2 3.4
Other, net (.4) (.2) .1
- ------------------------------------------------------------------------------
38.0% 38.0% 38.5%
==============================================================================
</TABLE>
The tax effect of significant temporary differences representing deferred
tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
January 31, January 25,
(Dollars in thousands) 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Deferred compensation $ 4,948 $ 4,508
Insurance reserves not yet deductible 3,789 4,580
Customer contracts 3,377 3,340
Other 4,580 2,699
- ------------------------------------------------------------------------------
16,694 15,127
- ------------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation (11,698) (9,257)
Linen amortization (9,682) (12,340)
Other (1,400) (901)
- ------------------------------------------------------------------------------
(22,780) (22,498)
- ------------------------------------------------------------------------------
Net deferred tax liabilities $ (6,086) $ (7,371)
==============================================================================
</TABLE>
Temporary differences related to investments in foreign subsidiaries
essentially permanent in nature and not expected to reverse in the
foreseeable future were approximately $2,467,000. The unrecognized deferred
tax liability related to these temporary differences was $268,000.
5. PREFERRED STOCK
The Company has two classes of authorized Preferred Stock: Class A, Series 1,
$1 stated value per share, authorized in the amount of 100,000 shares; and
Class B, authorized in the amount of 2,500,000 shares. At January 31, 1998 no
shares of Class A or 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. RESTRUCTURING CHARGES
During the third quarter of fiscal 1998, the Company recorded restructuring
and other charges of $23,247,000 ($14,413,000 after-tax or $1.57 per share).
These charges consisted of inventory writedowns of $1,063,000 included in
cost of textile services and $7,500,000 included in cost of goods sold and of
other charges totaling $14,684,000 included in restructuring charge. The
restructuring charge related primarily to the consolidation, closing and sale
of Textile Services and Manufacturing and Marketing plants. These costs
included writedowns to the carrying values of plants closed and other assets,
and the accrual of severance costs associated with the related elimination of
personnel. The restructuring charge was composed of $2,393,000 in cash
expenditures and $12,291,000 in reduction of asset carrying values. As of
January 31, 1998, $12,968,000 had been charged to the restructuring reserve
and the remaining reserve of $1,716,000 is expected to be utilized during
fiscal 1999.
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 related primarily to the consolidation and closing
of 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 included (i) writedowns to the carrying
values of plants 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. As of January 31, 1998
the reserve had been substantially utilized.
24 Angelica Corporation and Subsidiaries
<PAGE> 10
8. STOCK-BASED COMPENSATION PLANS
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 nor
more than 10 years after the date of grant.
The Company applies APB Opinion No. 25, Accounting for Stock Issued to
Employees, in accounting for its plans. Accordingly, no compensation expense
has been recognized for its stock-based compensation plans other than for
restricted stock and performance-based awards.
A summary of the status of the Company's stock option plans for fiscal
years 1998, 1997 and 1996 and changes during the years then ended is
presented in the table below:
<TABLE>
<CAPTION>
1998 1997 1996
-------------------- -------------------- --------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 672,175 $26.91 488,125 $30.45 399,331 $31.72
Granted 123,000 21.35 221,250 19.82 103,250 25.35
Exercised -- -- -- -- (1,000) 22.81
Lapsed/Canceled (97,650) 31.00 (37,200) 31.05 (13,456) 29.82
- ------------------------------------------------------------------------------------------------------------------------
Outstanding at end of year 697,525 $25.36 672,175 $26.91 488,125 $30.45
========================================================================================================================
Options exercisable at year end 346,760 $29.41 324,255 $31.85 243,770 $32.32
========================================================================================================================
Options available for future grant 420,447 452,627 648,088
========================================================================================================================
Weighted average fair value for options
granted during the year $4.40 $5.00 $7.59
========================================================================================================================
</TABLE>
The fair value of each option granted is estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions
used for grants in fiscal 1998, 1997 and 1996, respectively: risk free
interest rates of 6.0%, 6.4% and 7.2%; expected dividend yields of 3.7%, 3.5%
and 3.3%; volatilities of 19.3%, 18.5% and 17.1%; and expected lives of 7 to
9 years in all periods. The range of exercise prices for the 697,525 options
outstanding at year end was $18.00 to $37.50, and the weighted-average
remaining contractual life was 5.5 years.
Had compensation expense for the Company's 1998, 1997 and 1996 grants
for stock-based compensation plans been determined consistent with SFAS No.
123, Accounting for Stock-Based Compensation, the Company's net income and
earnings per share would approximate the pro forma amounts below (in
thousands except per share data):
<TABLE>
<CAPTION>
1998 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income (loss) --
As reported $(6,898) $8,022 $1,141
Pro forma (7,257) 7,746 1,035
Earnings per share --
As reported $ (.75) $ .88 $ .13
Pro forma (.79) .85 .11
==============================================================================
</TABLE>
SFAS No. 123 does not apply to awards prior to 1996, nor are the
effects of its application in this disclosure indicative of the pro forma
effect on net income in future years.
9. COMMITMENTS AND CONTINGENCIES
Future minimum payments by year and in the aggregate under operating leases
with initial or remaining terms of one year or more, consisted of the
following at January 31, 1998:
<TABLE>
<CAPTION>
Operating
(Dollars in thousands) Leases
- ------------------------------------------------------------------------
<S> <C>
1999 $ 7,507
2000 6,083
2001 4,773
2002 3,650
2003 2,930
Later years 6,467
- ------------------------------------------------------------------------
Total minimum lease payments $31,410
========================================================================
</TABLE>
Rental expense for all operating leases consisted of:
<TABLE>
<CAPTION>
(Dollars in thousands) 1998 1997 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum rentals $16,835 $16,528 $16,415
Contingent rentals 373 374 345
- ------------------------------------------------------------------------------
$17,208 $16,902 $16,760
==============================================================================
</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.
Angelica Corporation and Subsidiaries 25
<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) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $286,886 $261,349 $254,893 $244,496 $215,248
Manufacturing and marketing 180,711 176,638 180,845 178,584 174,985
Retail sales 84,733 77,860 71,803 68,876 56,732
Intersegment sales (25,806) (26,628) (20,527) (19,124) (19,837)
- ------------------------------------------------------------------------------------------------------------------------
$526,524 $489,219 $487,014 $472,832 $427,128
========================================================================================================================
Earnings
Textile services (Note 7) $ 18,273 $ 13,306 $ 17,069 $ 20,153 $ 19,011
Manufacturing and marketing (Note 7) (6,525) 6,015 5,728 7,003 6,962
Retail sales 8,305 7,663 6,706 6,270 4,125
Restructuring charge (Note 7) (14,684) -- (14,145) -- --
Interest, corporate expenses and other, net (16,395) (14,044) (13,367) (12,447) (12,183)
Eliminations (100) (2) (136) 275 145
- ------------------------------------------------------------------------------------------------------------------------
$(11,126) $ 12,938 $ 1,855 $ 21,254 $ 18,060
========================================================================================================================
Assets (as of year end)
Textile services $182,430 $182,738 $164,390 $165,499 $149,909
Manufacturing and marketing 150,265 149,501 146,340 153,192 152,780
Retail sales 29,422 28,543 26,182 26,120 20,498
Corporate 16,592 13,322 16,315 8,737 9,674
- ------------------------------------------------------------------------------------------------------------------------
$378,709 $374,104 $353,227 $353,548 $332,861
========================================================================================================================
Depreciation
Textile services $ 8,205 $ 7,836 $ 8,215 $ 8,032 $ 7,833
Manufacturing and marketing 3,705 3,921 4,052 3,775 3,751
Retail sales 1,719 1,561 1,442 1,390 1,210
Corporate 104 97 88 100 78
- ------------------------------------------------------------------------------------------------------------------------
$ 13,733 $ 13,415 $ 13,797 $ 13,297 $ 12,872
========================================================================================================================
Capital additions, net
Textile services $ 15,776 $ 19,014 $ 4,664 $ 6,454 $ 5,055
Manufacturing and marketing 2,913 3,243 2,921 3,587 2,475
Retail sales 2,606 1,291 1,118 1,280 940
Corporate 43 55 57 145 300
- ------------------------------------------------------------------------------------------------------------------------
$ 21,338 $ 23,603 $ 8,760 $ 11,466 $ 8,770
========================================================================================================================
</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.
26 Angelica Corporation and Subsidiaries
<PAGE> 12
11. UNAUDITED QUARTERLY FINANCIAL DATA
Quarterly results for 1998 and 1997 are shown below:
<TABLE>
<CAPTION>
Fiscal 1998 Quarter Ended
(Dollars in thousands, except per share amounts) April 26 July 26 October 25 January 31
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $ 71,534 $ 72,205 $ 71,737 $ 71,410
Manufacturing and marketing 42,412 43,518 45,087 49,694
Retail sales 20,369 19,913 22,156 22,295
Intersegment sales (6,958) (6,416) (6,190) (6,242)
- ------------------------------------------------------------------------------------------------------------------
127,357 129,220 132,790 137,157
- ------------------------------------------------------------------------------------------------------------------
Gross profit
Textile services (Note 7) 13,651 13,090 12,032 13,315
Manufacturing and marketing (Note 7) 8,008 7,747 1,929 10,372
Retail sales 11,015 10,862 12,174 11,937
- ------------------------------------------------------------------------------------------------------------------
32,674 31,699 26,135 35,624
- ------------------------------------------------------------------------------------------------------------------
Restructuring charge (Note 7) -- -- 14,684 --
- ------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 1,976 $ 1,300 $(11,818) $ 1,644
==================================================================================================================
Basic and diluted earnings (loss) per share $ .22 $ .14 $ (1.29) $ .18
==================================================================================================================
<CAPTION>
Fiscal 1997 Quarter Ended
(Dollars in thousands, except per share amounts) April 27 July 27 October 26 January 25
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales and textile service revenues
Textile services $ 65,212 $ 65,306 $ 64,812 $ 66,019
Manufacturing and marketing 44,585 45,367 44,959 41,727
Retail sales 18,548 18,584 20,984 19,744
Intersegment sales (6,704) (6,669) (6,505) (6,750)
- ------------------------------------------------------------------------------------------------------------------
121,641 122,588 124,250 120,740
- ------------------------------------------------------------------------------------------------------------------
Gross profit
Textile services 13,174 11,746 10,229 10,392
Manufacturing and marketing 9,152 9,994 9,887 8,332
Retail sales 10,108 10,133 11,542 10,594
- ------------------------------------------------------------------------------------------------------------------
32,434 31,873 31,658 29,318
- ------------------------------------------------------------------------------------------------------------------
Net income $ 3,057 $ 2,677 $ 1,824 $ 464
==================================================================================================================
Basic and diluted earnings per share $ .33 $ .30 $ .20 $ .05
==================================================================================================================
</TABLE>
Angelica Corporation and Subsidiaries 27
<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 31, 1998
and January 25, 1997, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended January 31, 1998. 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 31, 1998 and January 25, 1997, and
the results of their operations and their cash flows for each of three years
in the period ended January 31, 1998, in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
March 17, 1998
REPORT OF
AUDIT COMMITTEE
The Audit Committee consists of three non-employee members of the Board
of Directors and has regular meetings four times a year. The Committee is
responsible for recommending to the Board the appointment of the Company's
independent public accountants, for review and monitoring of the Company's
financial reports, internal controls, accounting practices and for review of
the scope of the audits performed by the independent public accountants and
internal auditors. The Committee also monitors compliance with Angelica's
Code of Conduct.
At its quarterly meetings, the Audit Committee reviews the financial
results for the preceding fiscal quarter or entire fiscal year and has the
opportunity to review related press releases and reports to shareholders. No
public release of financial results is made until Audit Committee approval
has been obtained. At these meetings the Committee also reviews the progress
being made in accomplishing the annual internal audit plan.
The Committee also discusses at its meetings audit and financial
reporting matters with representatives of Management and the independent
public accountants. Among the matters discussed are the scope, timing and
fees for the annual audit by the independent public accountants, and the
results of the quarterly reviews and annual audit, including any
recommendations for improvements to internal financial controls. The
independent public accountants, as well as the chief internal auditor, have
the opportunity to meet privately with the Committee at any of its meetings.
/s/ H. Edwin Trusheim
H. EDWIN TRUSHEIM
Chairman of the
Audit Committee
REPORT OF
MANAGEMENT
The Management of Angelica Corporation is responsible for the preparation and
integrity of all financial information presented in this Annual Report. The
financial statements have been prepared in conformity with generally accepted
accounting principles, and necessarily include amounts based on informed
judgments and estimates of Management.
The Company seeks to assure the integrity and objectivity of the data
in the financial statements through a system of internal accounting controls.
These controls, augmented by the Company's internal audit function, are
designed to provide reasonable assurance that assets are properly safeguarded
and transactions are executed in accordance with proper authorization.
Necessary records are maintained to provide accurate data for the preparation
of financial statements and for audit purposes.
The Company's independent public accountants, Arthur Andersen LLP, are
engaged to audit the financial statements and to render an opinion thereon,
which appears on this page. Their audit considered the Company's system of
internal accounting controls to the extent they deemed necessary to determine
the nature, timing and extent of their audit tests.
The Company's Code of Conduct requires employees to maintain the
highest standard of ethical conduct in all their business activities, and
compliance is regularly monitored.
/s/ Don W. Hubble
DON W. HUBBLE
Chairman, President and
Chief Executive Officer
/s/ Theodore M. Armstrong
THEODORE M. ARMSTRONG
Senior Vice President and
Chief Financial Officer
28 Angelica Corporation and Subsidiaries
<PAGE> 14
FINANCIAL SUMMARY--6 YEARS
<TABLE>
<CAPTION>
For Years Ended January 31, January 25, January 27, January 28, January 29, January 30,
(Dollars in thousands, except per share amounts) 1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Combined sales and textile service revenues $526,524 $489,219 $487,014 $472,832 $427,128 $430,797
Gross profit 126,132 125,283 127,474 126,823 116,199 117,297
Operating expenses and other, net,
excluding interest expense 111,872 102,757 102,370 97,663 90,695 87,524
Restructuring and other charges 14,684<Fa> -- 14,145<Fb> -- -- --
Interest expense 10,702 9,588 9,104 7,906 7,444 7,520
Income before income taxes
and cumulative effect of accounting change (11,126) 12,938 1,855 21,254 18,060 22,253
Provision (benefit) for income taxes (4,228) 4,916 714 8,183 6,909 8,450
Income (loss) before cumulative
effect of accounting change (6,898) 8,022 1,141 13,071 11,151 13,803
Cumulative effect of accounting change -- -- -- -- -- 1,984<Fc>
Net income (loss) $ (6,898) $ 8,022 $ 1,141 $ 13,071 $ 11,151 $ 15,787
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Diluted earnings (loss) $ (.75)<Fa> $ .88 $ .13<Fb> $ 1.44 $ 1.23 $ 1.71<Fc>
Cash dividends paid .96 .96 .95 .94 .93 .92
Common shareholders' equity $ 18.97 $ 20.73 $ 20.73 $ 21.57 $ 21.13 $ 20.88
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS
Current ratio (current assets to
current liabilities) 2.6 to 1 3.3 to 1 5.0 to 1 3.2 to 1 4.0 to 1 4.7 to 1
Percent long-term debt to
long-term debt and equity 35.7% 34.0% 34.6% 26.2% 27.3% 29.2%
Gross profit margin 24.0% 25.6% 26.2% 26.8% 27.2% 27.2%
Pretax profit margin (2.1)% 2.6% .4% 4.5% 4.2% 5.2%
Effective tax rate 38.0% 38.0% 38.5% 38.5% 38.3% 38.0%
Net income (loss) margin (1.3)% 1.6% .2% 2.8% 2.6% 3.7%
Return on average shareholders' equity (4.1)% 4.2% .4% 6.7% 5.8% 8.2%
Return on average total assets (1.8)% 2.2% .3% 3.8% 3.4% 4.8%
- ------------------------------------------------------------------------------------------------------------------------------
OTHER SELECTED DATA
Working capital $141,999 $163,015 $181,043 $150,734 $157,188 $161,129
Additions to property and equipment, net 21,338 23,603 8,760 11,466 8,770 9,889
Depreciation expense 13,733 13,415 13,797 13,297 12,872 12,578
Long-term debt, less current maturities 96,742 97,417 100,103 69,683 72,255 78,175
Total assets $378,709 $374,104 $353,227 $353,548 $332,861 $326,657
Average number of shares of
Common Stock outstanding 9,153,358 9,156,861 9,139,961 9,107,262 9,089,365 9,217,199
Approximate number of employees 9,400 10,100 9,700 9,800 9,500 9,000
- ------------------------------------------------------------------------------------------------------------------------------
<FN>
<Fa> Portion of $23,247 restructuring and other charges taken in third
quarter of fiscal 1998. Effect on net income per share is a reduction
of $1.57.
<Fb> Restructuring charge taken in fourth quarter of fiscal 1996. Effect on
net income per share is a reduction of $.95.
<Fc> Includes cumulative effect to February 1, 1992 of implementing SFAS 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 29
<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 Textile
Services, Inc. California 100%
Angelica International Ltd. Federal Corporation, Canada 100%
Angelica Textile
Services, 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 298 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. 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 28, 1998
<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 Don W. Hubble, 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
31, 1998, 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 31st day of March, 1998.
/s/ Don W. Hubble /s/ T. M. Armstrong
- ----------------------------------- ----------------------------------
(Don W. Hubble) (T.M. Armstrong)
Chairman, President and Chief Senior Vice President-
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/ David A. Abrahamson /s/ Susan S. Elliott
- ----------------------------------- ----------------------------------
(David A. Abrahamson) (Susan S. Elliott)
Director Director
/s/ Earle H. Harbison, Jr. /s/ Leslie F. Loewe
- ----------------------------------- ----------------------------------
(Earle H. Harbison, Jr.) (Leslie F. Loewe)
Director Director
/s/ William P. Stiritz /s/ Charles W. Mueller
- ----------------------------------- ----------------------------------
(William P. Stiritz) (Charles M. Mueller
Director Director
/s/ H. Edwin Trusheim /s/ William A. Peck
- ----------------------------------- ----------------------------------
(H. Edwin Trusheim) (William A. Peck)
Director Director
/s/ L. J. Young
- -----------------------------------
(L. J. Young)
Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the consolidated financial statements for period ended January 31,
1998 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-31-1998
<PERIOD-START> JAN-26-1997
<PERIOD-END> JAN-31-1998
<CASH> 2,833
<SECURITIES> 0
<RECEIVABLES> 71,975
<ALLOWANCES> (2,510)
<INVENTORY> 146,713
<CURRENT-ASSETS> 229,411
<PP&E> 219,831
<DEPRECIATION> (111,638)
<TOTAL-ASSETS> 378,709
<CURRENT-LIABILITIES> 87,412
<BONDS> 96,742
<COMMON> 9,472
0
0
<OTHER-SE> 164,636
<TOTAL-LIABILITY-AND-EQUITY> 378,709
<SALES> 239,638
<TOTAL-REVENUES> 526,524
<CGS> 165,595
<TOTAL-COSTS> 400,392
<OTHER-EXPENSES> 125,045
<LOSS-PROVISION> 1,511
<INTEREST-EXPENSE> 10,702
<INCOME-PRETAX> (11,126)
<INCOME-TAX> (4,228)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,898)
<EPS-PRIMARY> (.75)
<EPS-DILUTED> (.75)
</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, 1997
-------------------------------------------------
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, 1997 and
December 31, 1996
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1997
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, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits -- December 31, 1997
Statement of Net Assets Available for Plan Benefits -- December 31, 1996
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1997
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, 1997
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the
Year Ended December 31, 1997
<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, 1997 and 1996, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1997.
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, 1997 and 1996, and the changes in net assets available for
plan benefits for the year ended December 31, 1997, 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,
March 27, 1998
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Investment Funds
--------------------------------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
------
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 1,272,068 $1,272,068 $ - $ - $ -
American Balanced Fund 1,761,163 - 1,761,163 - -
MFS Growth Opportunities Fund 416,790 - 416,790 - -
Washington Mutual Investors Fund 12,017,302 - 12,017,302 - -
General American Life Insurance Company 3,297,635 - - 3,297,635 -
Safeco Insurance Company 3,308,240 - - 3,308,240 -
Society National Bank MGD GIC Fund 7,865,362 - - 7,865,362 -
Loans to participants 1,530,430 - - 1,530,430 -
Boatmen's BT Short-Term Investment Fund 5,693,317 10,417 128,174 5,552,816 1,910
----------- ---------- ----------- ----------- ------
37,162,307 1,282,485 14,323,429 21,554,483 1,910
OTHER ASSETS:
Cash on deposit with Trustee 15,050 - - 15,050 -
Contributions receivable (including
employer's contributions of $14,414) 141,976 6,408 57,197 76,482 1,889
Interest and dividends receivable 40,924 13,588 341 26,995 -
Loan payments receivable 29,143 - - 29,143 -
Other receivables 10,782 109 - 10,673 -
----------- ---------- ----------- ----------- ------
Total assets 37,400,182 1,302,590 14,380,967 21,712,826 3,799
----------- ---------- ----------- ----------- ------
LIABILITIES
-----------
LIABILITIES:
Premiums payable 3,799 - - - 3,799
Other payables 73,344 2,456 46,090 24,798 -
----------- ---------- ----------- ----------- ------
Total liabilities 77,143 2,456 46,090 24,798 3,799
----------- ---------- ----------- ----------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $37,323,039 $1,300,134 $14,334,877 $21,688,028 $ -
=========== ========== =========== =========== ======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Investment Funds
--------------------------------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
------
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 980,711 $ 980,711 $ - $ - $ -
American Balanced Fund 947,355 - 947,355 - -
MFS Growth Opportunities Fund 450,942 - 450,942 - -
Washington Mutual Investors Fund 8,364,037 - 8,364,037 - -
Commonwealth Life Insurance Company
Group Annuity Contract 2,175,198 - - 2,175,198 -
Hartford Life Insurance Company
Group Annuity Contract 5,273,460 - - 5,273,460 -
General American Life Insurance Company 3,023,762 - - 3,023,762 -
Society National Bank MGD GIC Fund 9,135,516 - - 9,135,516 -
Loans to participants 1,460,963 - - 1,460,963 -
Boatmen's Employee Benefit Short-Term Fund 234,327 7,005 51,046 174,186 2,090
----------- ---------- ---------- ----------- ------
32,046,271 987,716 9,813,380 21,243,085 2,090
OTHER ASSETS:
Cash on deposit with Trustee 13,810 - 20 13,790 -
Contributions receivable (including
employer's contributions of $15,006) 133,958 6,528 46,926 78,509 1,995
Interest and dividends receivable 67,990 12,246 54,944 800 -
Loan payments receivable 28,252 - - 28,252 -
Other receivables 5,817 - 3,714 2,103 -
----------- ---------- ---------- ----------- ------
Total assets 32,296,098 1,006,490 9,918,984 21,366,539 4,085
----------- ---------- ---------- ----------- ------
LIABILITIES
-----------
LIABILITIES:
Premiums payable 4,085 - - - 4,085
Other payables 98,489 3,131 44,475 50,883 -
----------- ---------- ---------- ----------- ------
Total liabilities 102,574 3,131 44,475 50,883 4,085
----------- ---------- ---------- ----------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $32,193,524 $1,003,359 $9,874,509 $21,315,656 $ -
=========== ========== ========== =========== ======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<CAPTION>
Investment Funds
------------------------------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
----------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
------
ADDITIONS:
Participant contributions $ 3,196,100 $ 152,569 $ 1,274,462 $ 1,717,579 $51,490
Employer contributions 513,165 26,021 182,651 304,493 -
Interest income 1,514,172 443 5,202 1,508,527 -
Dividend income 1,113,570 52,420 1,061,150 - -
Interfund transfers - (35,808) 758,672 (722,864) -
Rollovers 53,804 558 13,697 39,549 -
Net unrealized appreciation of
investments 2,052,875 254,880 1,797,995 - -
Net realized gain (loss) on sale of
investments 303,320 (57,758) 361,078 - -
Other additions 3,104 - 508 2,596 -
----------- ---------- ----------- ----------- -------
Total additions 8,750,110 393,325 5,455,415 2,849,880 51,490
----------- ---------- ----------- ----------- -------
DEDUCTIONS:
Participant withdrawals 3,569,105 96,550 995,047 2,477,508 -
Life insurance premiums 51,490 - - - 51,490
----------- ---------- ----------- ----------- -------
Total deductions 3,620,595 96,550 995,047 2,477,508 51,490
----------- ---------- ----------- ----------- -------
Net increase 5,129,515 296,775 4,460,368 372,372 -
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT BEGINNING OF YEAR 32,193,524 1,003,359 9,874,509 21,315,656 -
----------- ---------- ----------- ----------- -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT END OF YEAR $37,323,039 $1,300,134 $14,334,877 $21,688,028 $ -
=========== ========== =========== =========== =======
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, 1997 AND 1996
--------------------------
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. 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, 1997 and
1996, the Plan had $319,882 and $512,426, 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 was made. All loans are
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 shall direct that his
or her contributions be invested in one or more of the investment options
below in increments of at least 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. Effective
April 1, 1991, participants could no longer make contributions
into the MFS Growth Opportunities Fund but are not required to
transfer their account balances elsewhere.
Interest Income Fund
This fund is invested in group annuity contracts with General
American Life Insurance Company, Safeco Insurance Company 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.
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, which approximates fair 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.
<PAGE> 11
- 3 -
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair values of individual assets that represent 5% or more of the Plan's
net assets as of December 31, 1997 and 1996, are as follows:
<TABLE>
<S> <C>
December 31, 1997:
Washington Mutual Investors Fund $12,017,302
General American Life Insurance Company 3,297,635
Safeco Insurance Company 3,308,240
Society National Bank MGD GIC Fund 7,865,362
Boatmen's BT Short-Term Investment Fund 5,693,317
December 31, 1996:
Washington Mutual Investors Fund $ 8,364,037
Commonwealth Life Insurance Company Group Annuity Contract 2,175,198
Hartford Life Insurance Company Group Annuity Contract 5,273,460
General American Life Insurance Company 3,023,762
Society National Bank MGD GIC Fund 9,135,516
</TABLE>
4. INCOME TAX STATUS:
------------------
The Company has received a determination letter dated May 25, 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.
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
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Number of
Shares or
Principal
Amount Cost Fair Value
------------ ----------- -----------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock<Fa> 56,224 $ 1,326,952 $ 1,272,068
Boatmen's BT Short-Term Investment Fund<Fa> $ 10,417 10,417 10,417
----------- -----------
1,337,369 1,282,485
----------- -----------
MUTUAL FUND:
American Balanced Fund 112,319.075 1,683,845 1,761,163
MFS Growth Opportunities Fund 29,941.833 352,157 416,790
Washington Mutual Investors Fund 395,957.228 8,736,402 12,017,302
Boatmen's BT Short-Term Investment Fund<Fa> $ 128,174 128,174 128,174
----------- -----------
10,900,578 14,323,429
----------- -----------
INTEREST INCOME FUND:
General American Life Insurance Company $ 3,297,635 3,297,635 3,297,635
Safeco Insurance Company $ 3,308,240 3,308,240 3,308,240
Society National Bank MGD GIC Fund $ 7,865,362 7,865,362 7,865,362
Boatmen's BT Short-Term Investment Fund<Fa> $ 5,552,816 5,552,816 5,552,816
Loans to participants, interest ranging from 6.25% to
9.5%<Fa> $ 1,530,430 1,530,430 1,530,430
----------- -----------
21,554,483 21,554,483
----------- -----------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's BT Short-Term Investment Fund<Fa> $ 1,910 1,910 1,910
----------- -----------
Total investments $33,794,340 $37,162,307
=========== ===========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
SCHEDULE II
<TABLE>
THE ANGELICA CORPORATION
------------------------
RETIREMENT SAVINGS PLAN
-----------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS<Fa>
-----------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<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 44 $2,898,879 54 $1,235,879 $ 913,531 $322,348
American Funds Cash
Management Fund 73 1,403,042 73 1,403,042 1,403,042 -
Society National Bank
MGD GIC Fund 11 1,004,494 29 2,791,294 2,791,294 -
Boatmen's Employee
Benefit Short-Term
Fund<Fb> 134 4,832,521 114 5,113,351 5,113,351 -
Boatmen's BT
Short-Term
Investment Fund<Fb> 211 12,576,769 143 6,829,541 6,829,541 -
<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.
<Fb> Also a party-in-interest.
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 28, 1998
<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, 1997
-------------------------------------------------
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 officer:
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, 1997 and
December 31, 1996
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1997
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, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits--December 31, 1997
Statement of Net Assets Available for Plan Benefits--December 31, 1996
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1997
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, 1997
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the
Year Ended December 31, 1997
<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, 1997 and 1996, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1997.
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, 1997 and 1996, and the changes in net assets available for
plan benefits for the year ended December 31, 1997, 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,
March 27, 1998
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Investment Funds
--------------------------------------
Directed
Interest Purchase
Mutual Income of Life
Total Fund Fund Insurance
----- ------ -------- ---------
<S> <C> <C> <C> <C>
ASSETS
------
INVESTMENTS, at fair value:
Washington Mutual Investors Fund $ 3,047 $3,047 $ - $ -
Society National Bank MGD GIC Fund 855,594 - 855,594 -
Boatmen's BT Short-Term Investment Fund 15,496 51 15,383 62
Loans to participants 66,918 - 66,918 -
-------- ------ -------- -----
941,055 3,098 937,895 62
OTHER ASSETS:
Contributions receivable (including employer's
contribution of $1,044) 4,997 74 4,826 97
Interest and dividends receivable 59 - 59 -
Loan payments receivable 2,344 - 2,344 -
-------- ------ -------- -----
Total assets 948,455 3,172 945,124 159
LIABILITIES
-----------
LIABILITIES:
Premiums payable 159 - - 159
Other payables 9,000 - 9,000 -
-------- ------ -------- -----
Total liabilities 9,159 - 9,000 159
-------- ------ -------- -----
NET ASSETS AVAILABLE FOR PLAN BENEFITS $939,296 $3,172 $936,124 $ -
======== ====== ======== =====
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<CAPTION>
Investment Funds
------------------------------------
Directed
Interest Purchase
Mutual Income of Life
Total Fund Fund Insurance
----- ------ -------- ---------
<S> <C> <C> <C> <C>
ASSETS
------
INVESTMENTS, at fair value:
American Balanced Fund $ 313 $ 313 $ - $ -
Washington Mutual Investors Fund 3,721 3,721 - -
Hartford Life Insurance Company Group Annuity
Contract 241,217 - 241,217 -
Society National Bank MGD GIC Fund 574,780 - 574,780 -
Boatmen's Employee Benefit Short-Term Fund 2,896 147 2,686 63
Loans to participants 71,169 - 71,169 -
-------- ------ -------- ----
894,096 4,181 889,852 63
OTHER ASSETS:
Contributions receivable (including employer's
contribution of $1,040) 4,792 47 4,643 102
Interest and dividends receivable 13 - 13 -
Loan payments receivable 2,097 - 2,097 -
Interfund (payable) receivable - (117) 117 -
-------- ------ -------- ----
Total assets 900,998 4,111 896,722 165
LIABILITIES
-----------
PREMIUMS PAYABLE 165 - - 165
-------- ------ -------- ----
NET ASSETS AVAILABLE FOR PLAN BENEFITS $900,833 $4,111 $896,722 $ -
======== ====== ======== ====
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, 1997
------------------------------------
<CAPTION>
Investment Funds
-------------------------------------
Directed
Interest Purchase
Mutual Income of Life
Total Fund Fund Insurance
----- ------ -------- ---------
<S> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 67,667 $ 837 $ 65,034 $1,796
Employer contributions 13,709 63 13,646 -
Interest income 60,818 3 60,815 -
Dividend income 255 255 - -
Interfund transfers - (3,083) 3,083 -
Net unrealized appreciation of investments 121 121 - -
Net realized gain on sale of investments 865 865 - -
-------- ------- -------- ------
143,435 (939) 142,578 1,796
-------- ------- -------- ------
DEDUCTIONS:
Participant withdrawals 103,176 - 103,176 -
Life insurance premiums 1,796 - - 1,796
-------- ------- -------- ------
104,972 - 103,176 1,796
-------- ------- -------- ------
Net increase (decrease) 38,463 (939) 39,402 -
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
BEGINNING OF YEAR 900,833 4,111 896,722 -
-------- ------- -------- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF YEAR $939,296 $ 3,172 $936,124 $ -
======== ======= ======== ======
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, 1997 AND 1996
--------------------------
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 fulltime 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,
1997 and 1996, the Plan had $-0- and $3,453, 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 are 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 at least 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 American Balanced
Fund and/or the Washington Mutual Investors Fund.
Interest Income Fund
This fund is invested in group annuity contracts with 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.
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, which approximates fair 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.
<PAGE> 11
- 3 -
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
3. INVESTMENTS:
-----------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair values of individual assets that represent 5% or more of the Plan's
net assets as of December 31, 1997 and 1996, are as follows:
<TABLE>
<S> <C>
December 31, 1997:
Society National Bank MGD GIC Fund $855,594
Loans to participants 66,918
December 31, 1996:
Hartford Life Insurance Company Group Annuity Contract $241,217
Society National Bank MGD GIC Fund 574,780
Loans to participants 71,169
</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
<TABLE>
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
--------- -------- ---------
<S> <C> <C> <C>
MUTUAL FUND:
Washington Mutual Investors Fund 100.409 $ 2,171 $ 3,047
Boatmen's BT Short-Term Investment Fund <Fa> $ 51 51 51
-------- --------
2,222 3,098
-------- --------
INTEREST INCOME FUND:
Society National Bank MGD GIC Fund $855,594 855,594 855,594
Boatmen's BT Short-Term Investment Fund <Fa> $ 15,383 15,383 15,383
Loans to participants, interest ranging from 6.5% to 9.5% <Fa> $ 66,918 66,918 66,918
-------- --------
937,895 937,895
-------- --------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's BT Short-Term Investment Fund <Fa> $ 62 62 62
-------- --------
Total investments $940,179 $941,055
======== ========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
<TABLE>
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
COLLINWOOD 401(k) PLAN
----------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<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 6 $287,174 11 $ 43,324 $ 43,324 $ -
Boatmen's Employee Benefit
Short-Term Fund <Fb> 44 101,449 32 104,344 104,344 -
Boatmen's BT Short-Term
Investment Fund <Fb> 64 433,043 36 417,548 417,548 -
<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.
<Fb> Also a party-in-interest.
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 28, 1998
-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, 1997
-------------------------------------------------
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 officer:
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, 1997 and
December 31, 1996
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1997
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, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits December 31, 1997
Statement of Net Assets Available for Plan Benefits December 31, 1996
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1997
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, 1997
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1997
<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, 1997 and 1996, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1997.
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, 1997 and 1996, and the changes in net assets available for
plan benefits for the year ended December 31, 1997, 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,
March 27, 1998
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Investment Funds
----------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
-------- ---- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
------
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 928 $928 $ - $ - $ -
MFS Growth Opportunities Fund 2,222 - 2,222 - -
Washington Mutual Investors Fund 6,791 - 6,791 - -
American Balanced Fund 645 - 645 - -
Society National Bank MGD GIC Fund 557,091 - - 557,091 -
Boatmen's BT Short-Term Investment Fund 35,904 26 31 35,833 14
Loans to participants 19,556 - - 19,556 -
-------- ---- ------ -------- ---
623,137 954 9,689 612,480 14
OTHER ASSETS:
Contributions receivable (including
employer's contributions of $776) 4,112 5 33 4,058 16
Interest and dividends receivable 171 10 - 161 -
Loan payments receivable 794 - - 794 -
-------- ---- ------ -------- ---
Total assets 628,214 969 9,722 617,493 30
LIABILITIES
-----------
PREMIUMS PAYABLE 30 - - - 30
-------- ---- ------ -------- ---
NET ASSETS AVAILABLE FOR PLAN BENEFITS $628,184 $969 $9,722 $617,493 $ -
======== ==== ====== ======== ===
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, 1996
-----------------
<CAPTION>
Investment Funds
-----------------------------------------------------
Directed
Company Interest Purchase
Stock Mutual Income of Life
Total Fund Fund Fund Insurance
-------- ---- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
------
INVESTMENTS, at fair value:
Angelica Corporation Common Stock $ 975 $ 975 $ - $ - $ -
MFS Growth Opportunities Fund 1,606 - 1,606 - -
Washington Mutual Investors Fund 2,634 - 2,634 - -
American Balanced Fund 1,008 - 1,008 - -
Hartford Life Insurance Company Group
Annuity Contract 157,746 - - 157,746 -
Society National Bank MGD GIC Fund 350,102 - - 350,102 -
Boatmen's Employee Benefit Short-Term Fund 5,039 33 91 4,900 15
Loans to participants 25,704 - - 25,704 -
-------- ------ ------ -------- ---
544,814 1,008 5,339 538,452 15
OTHER ASSETS:
Contributions receivable (including
employer's contributions of $805) 4,241 5 95 4,126 15
Interest and dividends receivable 221 12 194 15 -
Loan payments receivable 1,252 - - 1,252 -
-------- ------ ------ -------- ---
Total assets 550,528 1,025 5,628 543,845 30
LIABILITIES
-----------
PREMIUMS PAYABLE 30 - - - 30
-------- ------ ------ -------- ---
NET ASSETS AVAILABLE FOR PLAN BENEFITS $550,498 $1,025 $5,628 $543,845 $ -
======== ====== ====== ======== ===
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, 1997
------------------------------------
<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 $ 53,322 $ 52 $ 996 $ 51,923 $ 351
Employer contributions 9,969 25 176 9,768 -
Interest income 37,681 2 4 37,675 -
Dividend income 882 44 838 - -
Interfund transfers - (305) 3,254 (2,949) -
Net unrealized appreciation of investments 1,115 267 848 - -
Net realized (loss) gain on sale of
investments (15) (141) 126 - -
--------- ------- ------- --------- -----
102,954 (56) 6,242 96,417 351
--------- ------- ------- --------- -----
DEDUCTIONS:
Participant withdrawals 24,917 - 2,148 22,769 -
Life insurance premiums 351 - - - 351
--------- ------- ------- --------- -----
25,268 - 2,148 22,769 351
--------- ------- ------- --------- -----
Net increase (decrease) 77,686 (56) 4,094 73,648 -
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF YEAR 550,498 1,025 5,628 543,845 -
--------- ------- ------- --------- -----
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF YEAR $ 628,184 $ 969 $ 9,722 $ 617,493 $ -
========= ======= ======= ========= =====
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, 1997 AND 1996
--------------------------
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. 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, 1997 and
1996, the Plan had $930 and $197, 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 are 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 at least 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. Effective
April 1, 1991, participants could no longer make contributions
into the MFS Growth Opportunities Fund but are not required to
transfer their account balances elsewhere.
Interest Income Fund
This fund is invested in group annuity contracts with 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.
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, which approximates fair 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.
<PAGE> 11
- 3 -
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair values of individual assets that represent 5% or more of the Plan's
net assets as of December 31, 1997 and 1996, are as follows:
<TABLE>
<S> <C>
December 31, 1997:
Society National Bank MGD GIC Fund $557,091
Boatmen's BT Short-Term Investment Fund 35,904
December 31, 1996:
Hartford Life Insurance Company Group Annuity Contract $157,746
Society National Bank MGD GIC Fund 350,102
</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
<TABLE>
SCHEDULE I
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
--------- --------- ---------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock <Fa> 41 $ 1,027 $ 928
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 26 26 26
--------- ---------
1,053 954
--------- ---------
MUTUAL FUND:
MFS Growth Opportunities Fund 159.606 1,957 2,222
Washington Mutual Investors Fund 223.767 5,531 6,791
American Balanced Fund 41.130 633 645
Boatmen's Employee Benefit Short-Term Fund <Fa> $ 31 31 31
--------- ---------
8,152 9,689
--------- ---------
INTEREST INCOME FUND:
Society National Bank MGD GIC Fund $557,091 557,091 557,091
Boatmen's BT Short-Term Investment Fund <Fa> $ 35,833 35,833 35,833
Loans to participants, interest ranging from 6.5% to 10.5% <Fa> $ 19,556 19,556 19,556
--------- ---------
612,480 612,480
--------- ---------
DIRECTED PURCHASE OF LIFE INSURANCE:
Boatmen's BT Short-Term Investment Fund <Fa> $ 14 14 14
--------- ---------
Total investments $ 621,699 $ 623,137
========= =========
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
<TABLE>
SCHEDULE II
THE ANGELICA CORPORATION
------------------------
SAVANNAH 401(k) PLAN
--------------------
ITEM 27d SCHEDULE OF 5% REPORTABLE TRANSACTIONS <Fa>
-----------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<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 6 $192,257 11 $ 8,745 $ 8,745 $ -
Boatmen's Employee Benefit Short-Term Fund <Fb> 45 49,701 31 54,740 54,740 -
Boatmen's BT Short-Term Investment Fund <Fb> 76 259,084 37 223,180 223,180 -
<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.
<Fb> Also a party-in-interest.
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 28, 1998
-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, 1997
-------------------------------------------------
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 officer:
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, 1997 and
December 31, 1996
Statement of Changes in Net Assets 8
Available for Plan Benefits - Fiscal
Year ended December 31, 1997
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, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
TABLE OF CONTENTS
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits December 31, 1997
Statement of Net Assets Available for Plan Benefits December 31, 1996
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1997
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, 1997
Schedule II: Item 27d - Schedule of 5% Reportable Transactions for the Year
Ended December 31, 1997
<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, 1997 and 1996, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1997.
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, 1997 and 1996, and the changes in net assets available for
plan benefits for the year ended December 31, 1997, 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,
March 27, 1998
<PAGE> 6
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1997
-----------------
<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 $ 12,082 $12,082 $ - $ -
American Balanced Fund 1,270 - 1,270 -
Washington Mutual Investors Fund 47,463 - 47,463 -
Society National Bank MGD GIC Fund 118,411 - - 118,411
Boatmen's BT Short-Term Investment Fund 11,782 193 366 11,223
Loans to participants 7,819 - - 7,819
-------- ------- ------- --------
198,827 12,275 49,099 137,453
OTHER ASSETS:
Contributions receivable 1,657 80 357 1,220
Interest and dividends receivable 175 132 6 37
Loan payments receivable 338 - - 338
-------- ------- ------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $200,997 $12,487 $49,462 $139,048
======== ======= ======= ========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<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 $ 10,653 $10,653 $ - $ -
American Balanced Fund 1,277 - 1,277 -
Washington Mutual Investors Fund 31,368 - 31,368 -
Hartford Life Insurance Company Group Annuity Contract 58,878 - - 58,878
Society National Bank MGD GIC Fund 134,825 - - 134,825
Boatmen's Employee Benefit Short-Term Fund 3,380 263 688 2,429
Loans to participants 9,006 - - 9,006
-------- ------- ------- --------
249,387 10,916 33,333 205,138
OTHER ASSETS:
Contributions receivable 2,818 97 608 2,113
Interest and dividends receivable 144 134 2 8
Loan payments receivable 314 - - 314
-------- ------- ------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $252,663 $11,147 $33,943 $207,573
======== ======= ======= ========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<CAPTION>
Investment Funds
---------------------------------------------
Company Interest
Stock Mutual Income
Total Fund Fund Fund
-------- ------- ------- --------
<S> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $ 21,574 $ 1,473 $ 5,358 $ 14,743
Interest income 12,216 20 58 12,138
Dividend income 3,995 557 3,438 -
Interfund transfers - (1,269) 10,038 (8,769)
Net unrealized appreciation of investments 8,098 2,511 5,587 -
Net realized gain (loss) on sale of investments 1,027 (704) 1,731 -
-------- ------- ------- --------
46,910 2,588 26,210 18,112
DEDUCTIONS - Participant withdrawals 98,576 1,248 10,691 86,637
-------- ------- ------- --------
Net (decrease) increase (51,666) 1,340 15,519 (68,525)
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF YEAR 252,663 11,147 33,943 207,573
-------- ------- ------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF YEAR $200,997 $12,487 $49,462 $139,048
======== ======= ======= ========
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, 1997 AND 1996
--------------------------
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,
1997 and 1996, the Plan had $2,774 and $-0-, 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 are 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 at least 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 Society
National Bank.
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, which approximates fair 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.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from
those estimates.
<PAGE> 11
- 3 -
3. INVESTMENTS:
------------
The Trustee of the Plan holds the Plan's investments and executes
transactions therein.
The fair values of individual assets that represent 5% or more of the Plan's
net assets as of December 31, 1997 and 1996, are as follows:
<TABLE>
<S> <C>
December 31, 1997:
Angelica Corporation Common Stock $ 12,082
Washington Mutual Investors Fund 47,463
Society National Bank MGD GIC Fund 118,411
Boatmen's BT Short-Term Investment Fund 11,782
December 31, 1996:
Washington Mutual Investors Fund $ 31,368
Hartford Life Insurance Group Company Annuity Contract 58,878
Society National Bank MGD GIC Fund 134,825
</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
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Number of
Shares or
Principal Fair
Amount Cost Value
---------- -------- --------
<S> <C> <C> <C>
COMPANY STOCK FUND:
Angelica Corporation Common Stock<Fa> 534 $ 12,564 $ 12,082
Boatmen's BT Short-Term Investment Fund<Fa> $ 193 193 193
-------- --------
12,757 12,275
-------- --------
MUTUAL FUND:
American Balanced Fund 80.975 1,251 1,270
Washington Mutual Investors Fund 1,563.839 38,966 47,463
Boatmen's BT Short-Term Investment Fund<Fa> $ 366 366 366
-------- --------
40,583 49,099
-------- --------
INTEREST INCOME FUND:
Society National Bank MGD GIC Fund $ 118,411 118,411 118,411
Boatmen's BT Short-Term Investment Fund<Fa> $ 11,223 11,223 11,223
Loans to participants, interest ranging from 8.25% to 9.25%<Fa> $ 7,819 7,819 7,819
-------- --------
137,453 137,453
-------- --------
Total investments $190,793 $198,827
-------- --------
<FN>
<Fa> Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 13
SCHEDULE II
<TABLE>
THE ANGELICA CORPORATION
------------------------
MISSOURI PLANTS 401(k) PLAN
---------------------------
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS<Fa>
-----------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<CAPTION>
Purchases Sales
------------------------ ----------------------------------------
Number of Purchase Number of Sales Cost of
Description of Asset Transactions Price Transactions Price Assets Gain
-------------------- ------------ -------- ------------ ----- ------- ----
<S> <C> <C> <C> <C> <C>
Washington Mutual Investors
Fund 20 $ 17,927 6 $ 8,914 $ 7,384 $1,530
Society National Bank MGD
GIC Fund 4 71,389 12 94,954 94,954 -
Boatmen's Employee Benefit
Short-Term Fund<Fb> 61 24,981 26 28,525 28,525 -
Boatmen's BT Short-Term
Investment Fund<Fb> 99 136,400 49 124,617 124,617 -
<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.
<Fb> Also a party-in-interest.
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 28, 1998
-14-
