<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended Commission File
July 31, 1999 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
CHESTERFIELD, MISSOURI 63017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(314) 854-3800
____________________________________________________
Former name, former address and former fiscal year
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
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
--- ---
The number of shares outstanding of Registrant's Common Stock, par value
$1.00 per share, at September 1, 1999 was 8,676,334 shares.
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ANGELICA CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
FOR JULY 31, 1999 FORM 10-Q QUARTERLY REPORT
<TABLE>
<CAPTION>
Page Number Reference
---------------------
Quarterly Report
to
Form 10-Q Shareholders
--------- ------------
<S> <C> <C>
PART I. FINANCIAL INFORMATION:
Consolidated Statements of Income -
Second Quarter and First Half Ended
July 31, 1999 and August 1, 1998 3
Consolidated Balance Sheets -
July 31, 1999 and January 30, 1999 4
Consolidated Statements of Cash Flows -
First Half Ended July 31, 1999
and August 1, 1998 5
Notes to Consolidated Financial
Statements 2
Management's Discussion and Analysis
of Operations and Financial Condition 3-5
Exhibit A - Quarterly Report to
Shareholders 6
PART II. OTHER INFORMATION 7-13
</TABLE>
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ANGELICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED JULY 31, 1999
(1) The accompanying consolidated condensed financial statements are
unaudited, and it is suggested that these consolidated statements
be read in conjunction with the fiscal 1999 Annual Report,
including Notes to Financial Statements. However, it is the
opinion of the Company that all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of
the results during the interim period have been included.
(2) See Index to Financial Statements and Supporting Schedules on page
1. Those pages of the Angelica Corporation and Subsidiaries
Quarterly Report to Shareholders for the quarter ended July 31,
1999, listed in such index are incorporated herein by reference.
The pages of the Quarterly Report to Shareholders which are not
listed on the index and therefore not incorporated herein by
reference are furnished for the information of the Commission but
are not to be deemed "filed" as a part of this report. The
Quarterly Report to Shareholders referred to herein is located
immediately following page 5 of this report.
(3) For purposes of the Consolidated Statements of Cash Flows, the
Company considers short-term, highly liquid investments which are
readily convertible into cash, as cash equivalents.
2
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ANGELICA CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
AND FINANCIAL CONDITION
QUARTER ENDED JULY 31, 1999
Analysis of Operations
- ----------------------
Combined sales and textile service revenues decreased 6.0 percent in the
second quarter ended July 31, 1999, and were down 5.9 percent in the
first half of the year compared with prior year periods. Textile
Service segment revenues decreased 5.0 percent and 3.5 percent for the second
quarter and first half periods, respectively, primarily due to the loss of
two large customers. Earnings of this segment declined 35.1 percent
in the second quarter and 15.7 percent in the first half as a
result of the customer losses and the adverse effects of four
underperforming plants. Sales of the Manufacturing and Marketing
segment decreased 10.8 percent in the second quarter and 13.3 percent in
the first half compared with the same periods last year as a result of
the sale of underperforming businesses (including the United Kingdom
business sold March 1, 1999), the lack of high volume provided last year
by the rollout of the New York City Transit program and exiting of
unprofitable product and market segments. Second quarter and first half
earnings increased 100.4 percent and 41.7 percent, respectively, aided
by better gross margins, reductions in operating expenses and another
strong quarter for the Canadian Operations. Life Retail Stores had a
5.4 percent increase in second quarter sales, as a result of a 4.2
percent same-store sales increase together with volume from new stores
and acquisitions. Earnings decreased 41.0 percent, primarily due to
discounting in certain geographical areas and the resulting lower
margins.
Selling, general and administrative expenses increased as a percent of
combined sales and textile service revenues from 21.4 percent to 23.0
percent in the second quarter. The decline in revenues in the
Manufacturing and Marketing and Textile Service segments, plus the
growth in the number of Life Retail stores, has contributed to the
increase in selling, general and administrative expenses as a percent of
sales and revenues. Interest expense was $333,000 lower in the second quarter
as a result of the repayment of all short-term debt in fiscal 1999.
Financial Condition
- -------------------
The Company had working capital of $142,112,000 and a current ratio of
4.0 to 1 at July 31, 1999, compared with $142,168,000 and 3.2 to 1 a
year ago and up from $136,071,000 and 3.2 to 1 at the beginning of the
year. The ratio of long-term debt to debt-plus-equity was 34.9 percent
at the close of the quarter, down from 35.3 percent a year ago and 35.4
percent at the beginning of the year.
Operating activities provided a total cash flow of $12,299,000 in the
first half compared with $25,494,000 in the first half last year, with
the decrease due to the fact that reductions in accounts receivable,
inventories and linens in service were lower in the first half of this year
versus last. Cash provided by investing activities was $496,000 compared
with cash used a year ago of $5,815,000. Most of the difference is the
$3,741,000 proceeds from sales of the Company's operations in the United
Kingdom and the Textile Services facility in Brea, California. Cash flows used
in financing activities reflect normal sinking fund payments of long-term
debt and the
3
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<PAGE>
payment of dividends. No material change in the Company's future
aggregate cash requirements is foreseen at the present time.
Based on the Company's cash generation from operations, as well as its
strong working capital position, current ratio and ratio of long-term
debt to debt-plus-equity, Management believes that internal funds
available from operations plus external funds available from the
issuance of additional debt and/or equity as needed in the future, will
be sufficient for all planned operating and capital requirements,
including acquisitions.
Year 2000 Compliance
- --------------------
The Company is working to resolve the effect that the Year 2000 ("Y2K")
issue has on its business and information systems. This process began
in 1996 with a comprehensive impact analysis to determine the scope,
requirements and cost of this effort. All significant systems requiring
modification or replacement have been identified. Currently, the
Company is in various stages of completion on different systems. All
in-house developed software has been modified, tested, and is currently
in production and compliant. Third party software, including packages,
is being made Y2K compliant using a combination of internal resources
and outside contractors and vendors. Compliance letters have been
received from all software vendors stating that they are, or will be,
Y2K compliant. The Company has engaged in a fairly aggressive process
to gain commitments from major suppliers to ensure that their systems
are Y2K compliant. Statements have been received from 100 percent of
major suppliers and from 60 percent of all suppliers. The Company is
also in the midst of addressing its Y2K issues which may not be
information technology based, including contingency options to address
unforeseen problems.
The Company has a comprehensive integrated testing program in process.
A test lab environment has been created for all business segments and
each production system and its related dependency systems and processes
are being tested against critical 1999 and 2000 dates. Compliance
expectations thus far have been achieved. This integrated testing
process is expected to be fully completed by October, 1999.
While the Company currently believes it will complete its Y2K effort by
October, 1999, failure to do so, or the failure of the Company's major
suppliers, vendors, governmental entities and other third parties with
which the Company has business dealings to modify or replace their
systems, could affect the Company's operations in unforeseen ways and,
thus, have a material adverse effect on the Company's future financial
condition and operating results. The most reasonably likely worst-case
scenario of failure, by the Company or its suppliers, to resolve the Y2K
issue, would be a temporary slowdown of operations at one or more of the
Company's facilities. The Company is currently reviewing contingency
options, including manual alternatives to systems operation, which would
minimize the risks of any such unresolved Y2K problem.
The cost of the Y2K effort is estimated at $2.7 million, of which
approximately $2.5 million has been expended as of July 31, 1999. The
Y2K costs are expensed as incurred, and amounts associated with newly
purchased software are capitalized. These costs are being funded
through operating cash flows.
4
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Forward-Looking Disclosure
- --------------------------
The Private Securities Litigation Reform Act of 1995 provides a "safe-
harbor" for forward-looking statements. This report contains forward-
looking statements that reflect the Company's current views with respect
to future events, financial resources and Y2K issues. These forward-
looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical results
or those anticipated. Actual future results and trends may differ
materially from historical results or those anticipated depending on a
variety of factors, including, but not limited to, competitive and
general economic conditions, the ability to retain current customers and
to add new customers in competitive market environments, the achievement
of operating efficiencies and optimizing costs without deterioration in
customer service and the timely resolution of the Y2K issue by the Company,
its customers and suppliers.
5
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Exhibit A
[Angelica letterhead]
August 18, 1999
Dear Shareholder:
We took a step backward in our turnaround efforts at Angelica in the
second quarter. After five consecutive quarters of double-digit per
share earnings increases, second quarter earnings this year were $.15
per share compared with $.20 per share in the same period last year, a
decrease of 25 percent. This was in line with the estimate we gave in
our July 19 press release. While it is not unexpected to experience
surprises in a turnaround environment such as we have, it is nonetheless
disappointing. The primary reason for the poor quarter is our lack of
sales growth in both Textile Services and in Manufacturing and
Marketing, discussed below.
Second quarter combined sales and textile service revenues were
$115,788,000, down 6.0 percent compared with $123,209,000 in last year's
second quarter. Pretax income was $2,090,000 compared with $2,903,000
last year, and net income was $1,295,000 versus $1,800,000 in the
comparable prior period. For the first half of this year, combined
sales and textile service revenues were $236,920,000 compared with
$251,874,000 in last year's first half, a decrease of 5.9 percent.
Pretax income of $6,107,000 compared with $6,820,000 in the prior year's
first half, and net income decreased to $3,786,000 versus $4,288,000 in
the same period last year. Earnings per share in the first half this
year were $.44 compared with $.46 last year, a decrease of 4.3 percent.
The Textile Services segment had a 5.0 percent decline in second quarter
revenues from $63,958,000 last year to $60,790,000 this year, and
operating earnings declined 35.1 percent from $4,575,000 in last year's
second quarter to $2,971,000 this year. With respect to the revenue
reduction, we were unable to re-sign two large, acute-care hospital
customers in the quarter or to replace that volume with other new
customers in the face of more intense price competition in the
marketplace. We cannot succumb to the temptation of agreeing to
unacceptable price levels and onerous contract provisions simply to
bolster short-term results. Our objective is to build a solid
foundation for the future, and some of these actions do, indeed,
negatively affect revenue growth and operating results in the near term.
We continue to be committed to building a more effective sales
organization for this segment. In addition to maintaining our large
share of traditional acute-care hospital business, this sales effort is
primarily focused on the non-traditional healthcare market segments such
as nursing homes and clinics. We are beginning to experience some sales
growth in the clinic segment. This effort is strategically correct and
should begin to show measurable results in the second half of this year.
In addition to lower than expected revenue levels, we also had four
plants that experienced abnormally high costs in the second quarter. We
believe we will be able to get these under control and have instituted
new procedures to ensure that costs are better managed in the future.
To supplement these cost control and revenue generation activities,
further plant consolidations are likely as are efforts to make selective
"tuck-in" acquisitions in this segment.
The Manufacturing and Marketing segment had a second quarter sales
decline (before intersegment sales) from $44,651,000 last year to
$39,809,000 this year. We had expected a sales decline of this
magnitude as a result of exiting value-destroying market segments, but
we also expected increased sales in core market segments which did not
materialize in the second quarter. Operating earnings, on the other
hand, doubled to $1,872,000 compared with $934,000 in the second quarter
last year, reflecting continued progress in better cost control and
better gross margins. Cost of goods will continue to improve in this
segment as more products are alternatively sourced, and this should also
improve our future ability to compete for increased sales. Cost
reduction efforts have been very effective at Manufacturing and
Marketing, and further reductions, while not as significant, are
planned.
<PAGE>
<PAGE>
In the second quarter, Life Retail Stores had a same-store sales
increase of 4.2 percent, which followed an increase of 3.2 percent in
the first quarter this year. Overall, second quarter sales increased
5.4 percent to $21,244,000 compared with $20,153,000 last year, the
difference being the impact of new store openings and acquisitions.
Operating earnings of this segment declined 41.0 percent to $677,000
from $1,148,000 in the second quarter last year. The discounting by
some competitors in certain geographic locations continues, but we are
encouraged by opportunities to reduce cost of goods, increase store
operating efficiency and increase margins in the future. We can now say
that we have our first e-commerce effort under way. You can visit our
internet store by logging on at www.lifeuniform.com. Our plans are to
-------------------
better serve our existing customers and to serve additional ones that
have not been visiting our stores. As mentioned previously, we intend
to offer products for sale through the catalogue distribution channel as
well. By utilizing catalogues and e-commerce, we will reinforce the
dominant position that Life has with its current chain of 309 stores.
We acquired one store in the quarter and also acquired another shortly
after the quarter ended.
Asset use efficiency continues to improve, as accounts receivable,
inventories and linens in service were reduced by another $4,281,000 in
the second quarter. For these three items, reductions in the first half
of the year have generated cash flow amounting to $11,545,000. We ended
the quarter with a cash balance of $10,974,000 and no short-term debt.
In spite of the second quarter results, we should exceed the earnings
level posted last year. Earnings will be far below our plan level,
however, and we are disappointed in that fact. We are convinced that
the first phase of our turnaround has been effective. The second phase,
driven by sales and revenue increases, is proving to be more
challenging. We are changing the culture at Angelica, and that takes
time and intense effort. Management teams throughout our Company are
continuing to be customer focused and value driven and are working to
increase shareholder value.
Respectfully submitted,
/s/ Don W. Hubble
Don W. Hubble
Chairman, President and
Chief Executive Officer
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands, except per share amounts)
<CAPTION>
Second Quarter Ended First Half Ended
-------------------------- -------------------------
July 31, August 1, July 31, August 1,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Textile service revenues $ 60,790 $ 63,958 $ 125,313 $ 129,814
Net sales 54,998 59,251 111,607 122,060
----------- ----------- ----------- -----------
115,788 123,209 236,920 251,874
----------- ----------- ----------- -----------
Cost of textile services 49,018 51,205 99,889 103,460
Cost of goods sold 35,616 39,676 71,892 81,609
----------- ----------- ----------- -----------
84,634 90,881 171,781 185,069
----------- ----------- ----------- -----------
Gross profit 31,154 32,328 65,139 66,805
----------- ----------- ----------- -----------
Selling, general and
administrative expenses 26,604 26,354 53,920 53,451
Interest expense 2,161 2,494 4,332 5,148
Other expense, net 299 577 780 1,386
----------- ----------- ----------- -----------
29,064 29,425 59,032 59,985
----------- ----------- ----------- -----------
Income before income taxes 2,090 2,903 6,107 6,820
Provision for income taxes 795 1,103 2,321 2,592
----------- ----------- ----------- -----------
Net Income $ 1,295 $ 1,800 $ 3,786 $ 4,228
=========== =========== =========== ===========
Basic and diluted earnings per share <F*> $ 0.15 $ 0.20 $ 0.44 $ 0.46
=========== =========== =========== ===========
Dividends per common share $ 0.24 $ 0.24 $ 0.48 $ 0.48
=========== =========== =========== ===========
Comprehensive income consisting of net income and foreign currency
translation adjustments, totaled $1,142 and $1,411 for the quarters
ended July 31, 1999 and August 1, 1998, respectively; and $4,178 and
$4,047 for the first halves ended July 31, 1999 and August 1, 1998,
respectively.
<FN>
<F*> Based upon weighted average number of common and common equivalent
shares outstanding of 8,693,718 and 9,223,437 for fiscal periods of 2000
and 1999, respectively.
</TABLE>
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<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands)
<CAPTION>
July 31, January 30,
1999 1999
----------- -----------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and short-term investments $ 10,974 $ 6,876
Receivables, less reserve of $3,392 and $2,623 55,764 57,240
Inventories:
Raw material 18,221 20,358
Work in progress 4,638 5,995
Finished goods 59,023 62,277
----------- -----------
81,882 88,630
Linens in service 35,709 39,030
Prepaid expenses 4,924 4,310
Income taxes - 1,303
----------- -----------
Total Current Assets 189,253 197,389
----------- -----------
Property and Equipment 210,313 213,508
Less -- reserve for depreciation 115,519 111,877
----------- -----------
94,794 101,631
----------- -----------
Goodwill 6,877 7,096
Other acquired assets 5,698 7,011
Cash surrender value of life insurance 19,130 18,640
Miscellaneous 6,892 7,323
----------- -----------
38,597 40,070
----------- -----------
Total Assets $ 322,644 $ 339,090
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current maturities of long-term debt $ 3,138 $ 5,841
Accounts payable 24,264 24,635
Accrued expenses 19,173 30,842
Income taxes 566 --
----------- -----------
Total Current Liabilities 47,141 61,318
----------- -----------
Long-Term Debt, less current maturities 89,052 90,910
Other Long-Term Obligations 20,542 21,059
Shareholders' Equity:
Preferred Stock:
Class A, Series 1, $1 stated value,
authorized 100,000 shares, outstanding: None -- --
Class B, authorized 2,500,000 shares, outstanding: None -- --
Common stock, $1 par value, authorized 20,000,000
shares, issued: 9,471,538 9,472 9,472
Capital surplus 4,196 4,196
Retained earnings 169,252 170,111
Accumulated other comprehensive income (1,893) (2,285)
Common Stock in treasury, at cost: 795,204 and 800,830 (15,118) (15,691)
----------- -----------
165,909 165,803
----------- -----------
Total Liabilities and Shareholders' Equity $ 322,644 $ 339,090
=========== ===========
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands)
<CAPTION>
First Half Ended
------------------------------
July 31, August 1,
1999 1998
---------- ----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 3,786 $ 4,228
Non-cash items included in net income:
Depreciation 6,727 6,847
Amortization of acquisition costs 1,604 1,747
Change in working capital components,
net of businesses acquired 765 13,921
Other, net (583) (1,249)
---------- ----------
Net cash provided by operating activities 12,299 25,494
---------- ----------
Cash Flows from Investing Activities:
Expenditures for property and equipment, net (2,937) (4,126)
Cost of businesses acquired (308) (1,689)
Proceeds from sale of assets 3,741 --
---------- ----------
Net cash provided by (used in) investing activities 496 (5,815)
---------- ----------
Cash Flows from Financing Activities:
Long-term and short-term debt repayments (4,561) (15,889)
Dividends paid (4,164) (4,411)
Other, net 28 246
---------- ----------
Net cash used in financing activities (8,697) (20,054)
---------- ----------
Net increase (decrease) in cash and
short-term investments 4,098 (375)
Balance at beginning of year 6,876 2,833
---------- ----------
Balance at end of period $ 10,974 $ 2,458
========== ==========
Supplemental cash flow information:
Income taxes paid $ 445 $ 1,766
Interest paid $ 4,453 $ 5,311
</TABLE>
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<TABLE>
BUSINESS SEGMENT INFORMATION
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands)
<CAPTION>
Second Quarter Ended First Half Ended
----------------------------- ----------------------------
July 31, August 1, July 31, August 1,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales and textile service revenues:
Textile Services $ 60,790 $ 63,958 $ 125,313 $ 129,814
Manufacturing and Marketing 39,809 44,651 80,350 92,683
Retail Sales 21,244 20,153 43,381 40,951
Intersegment sales (6,055) (5,553) (12,124) (11,574)
----------- ----------- ----------- -----------
$ 115,788 $ 123,209 $ 236,920 $ 251,874
=========== =========== =========== ===========
Earnings:
Textile Services $ 2,971 $ 4,575 $ 8,078 $ 9,584
Manufacturing and Marketing 1,872 934 3,667 2,588
Retail Sales 677 1,148 1,561 2,658
Interest, corporate expenses and other, net (3,430) (3,754) (7,199) (8,010)
----------- ----------- ----------- -----------
$ 2,090 $ 2,903 $ 6,107 $ 6,820
=========== =========== =========== ===========
</TABLE>
<TABLE>
SUMMARY FINANCIAL POSITION DATA
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands, except ratios, shares and per share amounts)
<CAPTION>
First Half Ended
------------------------------
July 31, August 1,
1999 1998
------------ ------------
<S> <C> <C>
Working capital $ 142,112 $ 142,168
Current ratio 4.0 to 1 3.2 to 1
Long-term debt $ 89,052 $ 94,853
Shareholders' equity $ 165,909 $ 174,171
Percent long-term debt to debt and equity 34.9% 35.3%
Equity per common share $ 19.12 $ 18.94
Common shares outstanding 8,676,334 9,196,734
</TABLE>
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PART II. OTHER INFORMATION
Item 4. Results of Votes of Security Holders
---------------------------------------------
At the Annual Meeting of Shareholders on May 25, 1999, four
matters were submitted to a vote of shareholders.
1. The following directors were elected, each to hold office
until the Annual Meeting to be held in 2002, or until a successor
is elected and has qualified or until his or her earlier death,
resignation or removal. Votes were cast as follows:
Votes Votes
Name "For" "Withheld"
---- ----- ----------
Earle H. Harbison, Jr. 6,384,897 1,027,726
Charles W. Mueller 7,335,994 76,629
Dr. William A. Peck 7,335,266 77,358
The following directors are continuing current terms expiring at
the 2000 Annual Meeting: David A. Abrahamson, Leslie F. Loewe and
William P. Stiritz. The following directors are continuing
current terms expiring at the 2001 Annual Meeting: Susan S.
Elliott, Don W. Hubble and H. Edwin Trusheim.
2. A management proposal for adoption and approval of the
Angelica Corporation 1999 Performance Plan was approved by the
shareholders. The 1999 Plan provides for the grant of Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock and
Performance Awards to employees of the Company. A total of
5,819,741 votes were cast in favor of this proposal, a total of
431,457 votes were cast against it, 38,340 votes were counted as
abstentions, and 1,123,084 votes were counted as broker non-votes.
3. A management proposal for approval of performance goals
under the 1999 Performance Plan was approved by the shareholders.
A total of 5,872,622 votes were cast in favor of this proposal, a
total of 376,206 votes were cast against it, 40,712 votes were
counted as abstentions, and 1,123,084 were counted as broker non-
votes.
4. A management proposal for re-affirmation of performance
goals under the 1994 Performance Plan was approved by the
shareholders. A total of 7,241,886 votes were cast in favor of
this proposal, a total of 130,171 votes were cast against it, and
40,566 votes were counted as abstentions.
Brokers were permitted to vote on the election of directors and
the re-affirmation of performance goals under the 1994 Performance
Plan in the absence of instructions from street-name holders;
therefore, broker non-votes did not occur in those matters.
7
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Item 6. Exhibit and Reports on Form 8-K
- ---------------------------------------
(a) See Exhibit Index included herein on pages 9-13.
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for
the second quarter ended July 31, 1999.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Angelica Corporation
--------------------
(Registrant)
Date: September 13, 1999 /s/ T. M. Armstrong
-------------------------------
T. M. Armstrong
Senior Vice President -
Finance and Administration
Chief Financial Officer
(Principal Financial Officer)
/s/ James W. Shaffer
-------------------------------
James W. Shaffer
Vice President and Treasurer
(Principal Accounting Officer)
8
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EXHIBIT INDEX
- -------------
Exhibit
Number Exhibit
- ------ -------
[FN]
<F*>Asterisk indicates exhibits filed herewith.
<F**>Incorporated by reference from the document listed.
3.1 Restated Articles of Incorporation of the Company, as currently
in effect. Filed as Exhibit 3.1 to the Form 10-K for the fiscal
year ended January 26, 1991.<F**>
3.2 Current By-Laws of the Company, as last amended August 25, 1998.
Filed as Exhibit 3.1 to the Form 10-Q for fiscal quarter ended
August 1, 1998.<F**>
4.1 Shareholder Rights Plan dated August 25, 1998. Filed as Exhibit 1
to Registration Statement on Form 8-A on August 28, 1998.<F**>
4.2 10.3% and 9.76% Senior Notes to insurance company due annually
to 2004, together with Note Facility Agreement. Filed as Exhibit
4.2 to the Form 10-K for the fiscal year ended January 27, 1990.<F**>
4.3 9.15% Senior Notes to insurance companies due December 31, 2001,
together with Note Agreements and First Amendment thereto. Filed
as Exhibit 4.3 to the Form 10-K for the fiscal year ended February 1,
1992.<F**>
4.4 8.225% Senior Notes to Nationwide Life Insurance Company, American
United Life Insurance Company, Aid Association for Lutherans
(reissued to Nimer & Co. as of August 1, 1998), and Modern Woodmen
of America due May 1, 2006, together with Note Agreement. Filed as
Exhibit 4.4 to the Form 10-Q for the fiscal quarter ended July 29,
1995.<F**>
Note: No other long-term debt instrument issued by the
Registrant exceeds 10% of the consolidated total assets
of the Registrant and its subsidiaries. In accordance
with Item 601(b) (4) (iii) (A) of
9
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<PAGE>
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). Filed as Exhibit 10.1 to the Form 10-K for fiscal
year ended January 28, 1995.<F**>
10.2 Retirement Benefit Agreement between the Company and Alan D.
Wilson dated August 25, 1987. Filed as Exhibit 10.2 to the Form
10-K for fiscal year ended January 28, 1995.<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. Filed as Exhibit 10.3 to
the Form 10-K for fiscal year ended January 30, 1999.<F**>
10.4 Angelica Corporation Stock Option Plan (As amended November 29,
1994). Filed as Exhibit 10.7 to the Form 10-K for fiscal year
ended January 28, 1995.<F**>
10.5 Angelica Corporation Stock Award Plan. Filed as Exhibit 10 to
the Form 10-K for fiscal year ended February 1, 1992.<F**>
10.6 Angelica Corporation Retirement Savings Plan, as amended and
restated. Filed as Exhibit 19.3 to the Form 10-K for fiscal
year ended January 27, 1990, incorporating all amendments
thereto through the date of this filing.<F**>
10.7 Supplemental Plan. Filed as Exhibit 19.10 to the Form 10-K
for fiscal year ended January 27, 1990, 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 January 25, 1997.<F**>
10.8 Incentive Compensation Plan (restated). Filed as Exhibit 19.11
to the Form 10-K for fiscal year ended January 27, 1990.<F**>
10
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<PAGE>
10.9 Deferred Compensation Option Plan for Selected Management
Employees. Filed as Exhibit 19.9 to the Form 10-K for fiscal
year ended January 26, 1991, incorporating all amendments
thereto through the date of this filing. The last amendment
thereto was filed as Exhibit 10.34 to Form 10-K for fiscal year
ended January 25, 1997.<F**>
10.10 Deferred Compensation Option Plan for Directors. Filed as
Exhibit 19.8 to the Form 10-K for fiscal year ended January 26,
1991, incorporating all amendments thereto through the date of
this filing.<F**>
10.11 Supplemental and Deferred Compensation Trust. Filed as Exhibit
19.5 to the Form 10-K for fiscal year ended February 1,
1992.<F**>
10.12 Management Retention Trust. Filed as Exhibit 19.4 to the Form
10-K for fiscal year ended February 1, 1992.<F**>
10.13 Performance Shares Plan for Selected Senior Management (restated).
Filed as Exhibit 19.3 to the Form 10-K for fiscal year ended
January 26, 1991.<F**>
10.14 Management Retention and Incentive Plan (restated). Filed as
Exhibit 19.1 to the Form 10-K for fiscal year ended January 26,
1991.<F**>
10.15 Non-Employee Directors Stock Plan. Filed as Exhibit 10.3 to the
Form 10-K for fiscal year ended January 27, 1990, incorporating
all amendments thereto through the date of this filing.<F**>
10.16 Restated Deferred Compensation Plan for Non-Employee Directors.
Filed as Exhibit 10 (v) to the Form 10-K for fiscal year ended
January 28, 1984, 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
January 28, 1995.<F**>
11
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<PAGE>
10.17 Restated Angelica Corporation Stock Bonus and Incentive Plan
(Incorporating Amendments Adopted Through October 25, 1994).
Filed as Exhibit 10.20 to the Form 10-K for fiscal year ended
January 28, 1995, incorporating all amendments thereto through
the date of this filing.<F**>
10.18 Angelica Corporation Pension Plan as Amended and Restated.
Filed as Exhibit 19.7 to the Form 10-K for fiscal year ended
January 26, 1991, incorporating all amendments thereto through
the date of this filing. The last amendment thereto was filed
as Exhibit 10.23 to Form 10-Q for fiscal quarter ended July 27,
1996.<F**>
10.19 Angelica Corporation 1994 Non-Employee Directors Stock Plan.
Filed as Appendix A of the Company's Proxy Statement for the
Annual Meeting of Shareholders held on May 23, 1995 and
incorporating all amendments thereto through the date of this
filing. The last amendment thereto was filed as Exhibit 10.35
to Form 10-K for fiscal year ended January 31, 1998.<F**>
10.20 Specimen form of Stock Option Agreement under the Angelica
Corporation Stock Option Plan. Filed as Exhibit 10.20 to the
Form 10-K for fiscal year ended January 27, 1996.<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 January 27, 1996) 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.
Filed as Exhibit 10.21 to the Form 10-K for fiscal year ended
January 25, 1997.<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. Filed as Exhibit 10.22 to the Form
10-K for fiscal year ended January 30, 1999.<F**>
10.23 Employment Agreement between the Company and Theodore M.
Armstrong, dated November 27, 1996. Filed as Exhibit 10.24 to
the Form 10-K for fiscal year ended January 25, 1997.<F**>
12
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<PAGE>
10.24 Employment Agreement between the Company and Alan D. Wilson,
dated July 14, 1999.<F*>
10.25 Employment Agreement between the Company and Don W. Hubble,
dated December 12, 1997. Filed as Exhibit 10.30 to the Form 10-K
for fiscal year ended January 31, 1998.<F**>
10.26 Retirement Benefit Agreement between the Company and Don W.
Hubble dated January 1, 1998. Filed as Exhibit 10.31 to the
Form 10-K for fiscal year ended January 31, 1998.<F**>
10.27 Non-Qualified Stock Option Agreement between the Company and
Don W. Hubble dated January 2, 1998. Filed as Exhibit 10.32 to
the Form 10-K for fiscal year ended January 31, 1998.<F**>
10.28 Description of restricted stock granted to Don W. Hubble
effective January 2, 1998. Filed as Exhibit 10.33 to the Form
10-K for fiscal year ended January 31, 1998.<F**>
10.29 Employment Agreement between the Company and Charles D. Molloy,
Jr., dated February 28, 1997. Filed as Exhibit 10.32 to the
Form 10-K for fiscal year ended January 30, 1999.<F**>
10.30 Employment Agreement between the Company and Steven L. Frey,
dated March 1, 1999. Filed as Exhibit 10.34 to the Form 10-K
for fiscal year ended January 30, 1999.<F**>
10.31 Angelica Corporation 1999 Performance Plan. Filed as Appendix
A of the Company's Proxy Statement for the Annual Meeting of
Shareholders held May 25, 1999.<F**>
10.32 Eighteenth Amendment to Angelica Corporation Retirement Savings
Plan, dated May 25, 1999.<F*>
27 Financial Data Schedule<F*>
13
<PAGE>
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into as of
this 14th day of July, 1999, by and between Angelica Corporation, a
Missouri corporation ("Angelica"), and Alan D. Wilson, an individual
("Employee").
WHEREAS, Angelica currently employs Employee as Vice President of
Angelica and President of Angelica's Textile Services Business Segment
and Angelica and Employee wishes to more specifically define the terms
and conditions of Employee's employment with Angelica in this Agreement.
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
SECTION 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.
(a) "ANNUAL BASE SALARY" means the base salary set
forth in Section 3.3 of this Agreement, as it shall be
increased from time to time in the discretion of the
Board or the Compensation and Organization Committee
of the Board.
(b) "BOARD" means the Board of Directors of Angelica.
(c) "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
Securities Exchange Act of 1934, as
amended (the "Exchange Act") of ownership
of 20% or more of either (a) the then
outstanding shares of common stock of
Angelica (the "Outstanding Angelica Common
Stock") or (b) the combined voting power
of the then outstanding voting securities
of Angelica entitled to vote generally in
the election of directors (the
"Outstanding Angelica 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 Angelica'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 l4a-11 of
Regulation l4A promulgated under the
Exchange Act) or other actual or
threatened solicitation of proxies or
consents by or on behalf of a Person other
than the Board; or
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<PAGE>
(iii) Approval by the stockholders of Angelica
of a reorganization, merger or
consolidation, in each case, unless,
following such reorganization, merger or
consolidation, (a) more 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 Angelica
Common Stock and Outstanding Angelica
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 Angelica Common Stock and
Outstanding Angelica Voting Securities, as
the case may be, (b) no Person
beneficially owns, directly or indirectly,
20% 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 Angelica
of (a) a complete liquidation or
dissolution of Angelica or (b) the sale or
other disposition of all or substantially
all of the assets of Angelica, other than
to a corporation, 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 Angelica
Common Stock and Outstanding Angelica
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
Angelica Common Stock and Outstanding
Angelica Voting Securities, as the case
may be, (2) no Person beneficially owns,
directly or indirectly, 20% 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 or other disposition of assets of
Angelica.
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<PAGE>
(d) "DATE OF TERMINATION" means a date that a Notice
of Termination is received by the party to whom such
notice is being given, unless the party giving the
Notice of Termination specifies another date in the
Notice of Termination (which date shall not be more
than 30 days after giving of such Notice of
Termination) or, alternatively, the last day of any
Term in the event that a Notice of Non-Renewal is
delivered by either party in accordance with Section
2.1 of this Agreement.
(e) "DISPOSITION OF THE OPERATING LINE OF BUSINESS"
means:
(i) when used with reference to the stock or
other equity interests of the Operating
Line of Business that is or becomes a
separate corporation, limited liability
company, partnership or other business
entity, the sale, exchange, transfer,
distribution or other disposition of the
ownership, either beneficially or of
record or both, by Angelica 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 the Operating Line of
Business;
(ii) when used with reference to the merger or
consolidation of the Operating Line of
Business that is or becomes a separate
corporation, limited liability company,
partnership or other business entity, any
such transaction that results in Angelica
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 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
the Operating Line of Business; or
(iii) when used with reference to the assets of
the Operating Line of Business, the sale,
exchange, transfer, liquidation,
distribution or other disposition of
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.
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<PAGE>
(f) "EFFECTIVE DATE" means the date of this
Agreement.
(g) "EMPLOYMENT PERIOD" means the period beginning on
the Effective Date and ending on the Date of
Termination.
(h) "GOOD CAUSE" means, when used in connection with
the termination of Employee's employment with Angelica
by Angelica, a termination based upon (i) Employee's
willful and continued failure to substantially perform
his duties with Angelica (other than as a result of
incapacity due to physical or mental condition), after
a written demand for substantial performance is
delivered to Employee by Angelica, which specifically
identifies the manner in which Employee has not
substantially performed his duties; (ii) Employee's
commission of an act constituting a criminal offense
involving moral turpitude, dishonesty or breach of
trust; or (iii) Employee's material breach of any
provision of this Agreement.
(i) "GOOD REASON" means, when used in connection with
the termination of Employee's employment with Angelica
by Employee, a termination based upon the following
reasons:
(i) the assignment to Employee of any duties
inconsistent in any respect with
Employee's position (including status,
offices, titles and reporting
requirements), authority, duties and
responsibilities as contemplated by this
Agreement or any other action by Angelica
which results in a material diminution in
such position, authority, duties or
responsibilities, excluding for this
purpose any action not taken in bad faith
which is remedied by Angelica promptly
after receipt of notice by Angelica
thereof given by Employee;
(ii) (A) the failure by Angelica to continue in
effect any benefit or compensation plan,
stock ownership plan, life insurance plan,
health and accident plan or disability
plan to which Employee is entitled,
provided that Angelica may amend, modify
or replace such plans as long as the
Employee is entitled to benefits under the
amended, modified or replaced plan or
plans that are substantially similar to
those of the plan or plans so amended,
modified or replaced; (B) the taking of
any action by Angelica which would
adversely affect Employee's participation
in, or materially reduce Employee's
benefits under, any plans in which
Employee is then currently participating;
or (C) the failure of Angelica to provide
Employee with paid vacation to which
Employee is entitled;
(iii) a material breach by Angelica of any
provision of this Agreement;
(iv) a purported termination by Angelica of
Employee's employment otherwise than
specifically permitted by this Agreement;
or
(v) in connection with a Triggering
Transaction (as set forth in Section 4.2
of this Agreement), the failure of a
successor of Angelica expressly to assume
and agree to perform this Agreement
pursuant to the provisions of Section 6.4
of
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<PAGE>
this Agreement prior to a Triggering
Transaction; provided, however, that a
-----------------
termination of employment by Employee: (A)
subsequent to an express assumption and
agreement to perform this Agreement by
such successor on or after a Triggering
Transaction Date or (B) subsequent to a
date that is two years after a Triggering
Transaction Date, shall not be deemed to
be for "Good Reason" under this
subsection.
(j) "NOTICE OF TERMINATION" means a written notice by
either party of such party's desire to terminate
Employee's employment with Angelica, which notice (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 Employee's employment under the
provision so indicated, and (iii) if the Date of
Termination is other than the date of receipt of such
Notice, specifies the Date of Termination (which date
shall not be more than 30 days after the giving of
such Notice). The failure by Employee or Angelica to
set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good
Cause or Good Reason shall not waive any right of
Employee or Angelica hereunder or preclude Employee or
Angelica from asserting such fact or circumstance in
enforcing Employee's or Angelica's rights hereunder.
(k) "NOTICE OF NON-RENEWAL" means a written notice by
either party to this Agreement of such party's desire
not to allow the Term of the Agreement to
automatically renew at the end of the then-current
Term for another Term, thus having the effect of
terminating the Agreement at the end of the then-
current Term.
(l) "OPERATING LINE OF BUSINESS" means Angelica's
Textile Services Business Segment which operates
laundry plants, either as a division or as a separate
subsidiary or subsidiaries, providing textile rental
and laundry services for health care institutions and
general linen services in selected geographic areas,
principally to hotels, motels and restaurants.
(m) "TERM" means, initially a one-year period
commencing on the Effective Date and ending on the
date of the first anniversary of the Effective Date,
and, if renewed in accordance with Section 2.1 of this
Agreement, shall mean a one-year period commencing on
the particular anniversary date of the Effective Date
and ending on the date one year after such commencing
anniversary date.
(n) "TRIGGERING TRANSACTION" means (i) a Change in
Control of Angelica, or (ii) a Disposition of the
Operating Line of Business.
(o) "TRIGGERING TRANSACTION DATE" shall mean the date
that the Triggering Transaction occurs.
SECTION 2: TERM OF AGREEMENT.
2.1 INITIAL TERM OF AGREEMENT; RENEWAL TERMS. The initial
Term of this Agreement shall be for one year commencing on the Effective
Date, subject to automatic renewal for a Term of an
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<PAGE>
additional one year commencing immediately upon the end of the initial
Term or the then-current renewal Term, as the case may be, unless either
party to this Agreement gives a Notice of Non-Renewal to the other party
not later than 30 days prior to the end of the initial Term or the then-
current renewal Term, as the case may be. In the event that such a
Notice of Non-Renewal is given as set forth in this Section 2.1, the
Date of Termination will be the last day of the initial Term or the
then-current Term, as the case may be.
2.2 TERMINATION OF THE EMPLOYMENT PERIOD PRIOR TO END OF
TERM. Notwithstanding Section 2.1 of this Agreement, either party to
this Agreement may terminate Employee's Employment Period (and
Employee's employment with Angelica) at any time during the Term by
giving the other party a Notice of Termination to the other party,
without any liability except as specified in Section 4 of this
Agreement.
SECTION 3: TERMS AND CONDITIONS OF EMPLOYMENT.
3.1 PERIOD OF EMPLOYMENT. Employee shall remain in the
employ of Angelica throughout the Employment Period in accordance with
the terms and provisions of this Agreement. This Agreement shall remain
in full force and effect notwithstanding subsequent changes in
Employee's compensation, location of employment, duties or authority or
any changes in the identity of the corporation to which Employee's
compensation is charged, provided that said corporation is a subsidiary
or affiliate of Angelica and provided further that certain of such
changes may constitute Good Reason for purposes of this Agreement.
3.2 POSITIONS AND DUTIES. Angelica hereby employs
Employee and Employee hereby accepts such employment as Vice President
of Angelica and President of Angelica's Textile Services Business
Segment, subject to the reasonable directions of the Chief Executive
Officer of Angelica and the Board. Employee shall have such authority
and shall perform such duties as are specified in the Bylaws of Angelica
for the office and position to which he has been appointed hereunder and
shall so serve, subject to the control exercised by the Chief Executive
Officer of Angelica and the Board from time to time. Employee agrees to
devote such of his time, attention and energy to the business of
Angelica as may be required to perform the duties and responsibilities
assigned to him to the best of his ability and with reasonable
diligence.
3.3 COMPENSATION. Employee's initial base salary under
this Agreement will be $196,700 per annum, payable in accordance with
Angelica's current payroll practices. In addition to the Annual Base
Salary, Employee shall be awarded the opportunity to earn an incentive
bonus on an annual basis ("Incentive Bonus") under the Incentive
Compensation Plan or any incentive compensation plan which is generally
available to other similarly situated executives of Angelica. The
Incentive Bonus during the first year of the Employment Period shall
range from 0 to 60% of Employee's Annual Base Salary. The Incentive
Bonus which Employee will have an opportunity to earn shall be reviewed
at least annually and may be adjusted at the discretion of the Chief
Executive Officer of Angelica and the Board, dependent upon Employee's
performance and in accordance with Angelica's policies.
3.4 PARTICIPATION IN PERFORMANCE PLANS. Employee is
eligible to receive stock-based awards or grants under Angelica's 1994
Performance Plan or 1999 Performance Plan, including stock options,
restricted stock and performance awards, from time to time, in the
discretion of the Compensation and Organization Committee or the Board
of Angelica.
-6-
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<PAGE>
3.5 PARTICIPATION IN STOCK BONUS AND INCENTIVE PLAN.
Employee is eligible to participate in Angelica's Stock Bonus and
Incentive Plan, based on current eligibility requirements and subject to
the terms and conditions of such plan.
3.6 PARTICIPATION IN RETIREMENT SAVINGS PLAN. Employee is
eligible to participate in Angelica's Retirement Savings Plan (the
"401(k) Plan"), based upon current eligibility requirements and subject
to the terms and conditions of such plan.
3.7 PARTICIPATION IN PENSION PLAN. Employee is eligible
to participate in Angelica's "defined benefit" Pension Plan, based on
current eligibility requirements and subject to the terms and conditions
of such plan.
3.8 PARTICIPATION IN SUPPLEMENTAL PLAN. Employee is
eligible to participate in Angelica's Supplemental Plan, based upon
current eligibility requirements and subject to the terms and conditions
of such plan.
SECTION 4: BENEFITS UPON TERMINATION.
4.1 NOT IN CONNECTION WITH A TRIGGERING TRANSACTION. If
Employee's employment with Angelica is terminated prior to the end of
the initial Term or prior to the end of any subsequent renewal Term, as
the case may be, (a) by Angelica without Good Cause or (b) by Employee
for Good Reason, then upon the negotiation and execution of a mutually
acceptable settlement and release agreement by Angelica and Employee, in
addition to any accrued salary and other payments owed to Employee under
Angelica's other severance plans and policies, Angelica shall pay
Employee an amount equal to Employee's then-current Annual Base Salary,
in a lump-sum payment, as soon as practicable after the Date of
Termination. In the case of a termination of Employee's employment with
Angelica not in connection with a Triggering Transaction for any reason
other than as stated in this Section 4.1 above, Employee shall be
entitled only to accrued salary and other payments owed to Employee
under Angelica's other benefit plans and policies.
4.2 IN CONNECTION WITH A TRIGGERING TRANSACTION. If (a) a
Triggering Transaction occurs during the Employment Period and within
two years after the Triggering Transaction Date (i) Angelica shall
terminate Employee's employment with Angelica without Good Cause, or
(ii) Employee shall terminate employment with Angelica for Good Reason,
or, alternatively, (b) if one of the above-described terminations of
- --
employment 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, in addition to any accrued salary and other payments
owed to Employee under Angelica's other benefit plans and policies,
Angelica shall pay to Employee an amount equal to 2.99 times Employee's
then-current Annual Base Salary, in a lump-sum payment, after 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 set forth in this Section 4.2 is
hereinafter referred to as the "Entitlement Date"). In addition, at the
Entitlement Date, to the extent not otherwise provided for under the
terms of Angelica's stock option plans or Employee's stock option
agreements, all stock options held by Employee that have not expired in
accordance with their respective terms shall vest and become fully
exercisable. Also, for purposes of that
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<PAGE>
certain Retirement Benefit Agreement dated August 25, 1987 by and
between Employee and the Company (the "Retirement Agreement"), the
vesting schedule set forth in Section 1(e) of the Retirement Agreement
(and the benefits due pursuant thereto) shall be computed based upon the
actual number of years Employee had been employed by the Company as of
the Date of Termination plus five years; provided, however, in no
-----------------
event shall Employee be deemed to be vested with respect to more than
100% of the benefit due pursuant to the Retirement Agreement. In the
case of any termination of Employee's employment with Angelica in
connection with a Triggering Transaction for any reason other than as
stated in this Section 4.2 above, Employee shall be entitled only to
accrued salary and other payments owed to Employee under Angelica's
other benefit plans and policies.
SECTION 5: NON-COMPETITION, CONFIDENTIALITY, NON-DIVERSION.
5.1 NON-COMPETE AGREEMENT. It is agreed that during the
period beginning on the Effective Date and ending one year after the
Date of Termination, regardless of whether such termination is by the
action of Employee or Angelica or by mutual agreement, Employee shall
not, either for himself or on behalf of any person, firm or corporation
(whether for profit or otherwise) engage in any form of competition with
Angelica, directly or indirectly, through any commercial venture, as a
partner, officer, director, stockholder, advisor, employee, consultant,
agent, salesman, venturer or otherwise, in the business conducted by the
Operating Line of Business in the United States, Canada or any other
country in which Angelica does business. This requirement, however,
will not limit Employee's right to invest in the capital stock or other
equity securities of any corporation, the stock or securities of which
are publicly owned or are regularly traded on any public securities
exchange. In addition, notwithstanding this Section 5.1, if Employee is
terminated by Angelica without Good Cause or if Employee terminates his
employment with Angelica for Good Reason, then Employee will not be
subject to the restrictions of this Section 5.1.
5.2 CONFIDENTIAL INFORMATION. Employee acknowledges that
during his employment with Angelica, he may develop or be exposed to
confidential information concerning Angelica's inventions, processes,
methods and confidential affairs, property of a proprietary nature and
trade secrets of Angelica or its licensors or customers. Employee
agrees that the maintenance of the proprietary character of such
information and property to the full extent feasible is important and
that for so long as any such confidential information and trade secrets
may remain confidential, secret or otherwise wholly or partially
protectable, either during or after Employee's Employment Period, shall
not use or divulge such confidential information or property except as
permitted or required by the duties of Employee's employment with
Angelica. Employee shall not remove any property of a proprietary
nature from Angelica's premises except as required by the duties of
Employee's employment. Employee shall return to Angelica upon
termination of his employment with Angelica, all models, drawings,
photographs, writings, records, papers or other properties produced by
Employee or coming into his possession by or through his employment with
Angelica.
5.3 NON-DIVERSION. During the Employment Period and for
one year after the Date of Termination, Employee shall not directly or
indirectly or by aid to others, do anything which could be expected to
divert from Angelica any trade or business with any customer of Angelica
with whom Employee had any contact or association during the one year
immediately preceding the Date of Termination.
-8-
<PAGE>
<PAGE>
5.4 REASONABLENESS OF RESTRICTIONS. Employee agrees that
the period and areas of restriction following the Date of Termination,
as set forth in this Section 5, are reasonably required for the
protection of Angelica and its business, as well as the continued
protection of Angelica's employees. If any one or more of the covenants,
agreements or provisions contained herein shall be held to be contrary
to the policy of a specific law, though not expressly prohibited, or
against public policy, or shall for any other reason whatsoever be held
invalid, then such particular covenant, agreement or provision shall be
null and void and shall be deemed separable from the remaining
covenants, agreements and provisions, and shall in no way affect the
validity of any of the other covenants, agreements and provisions
hereof. The parties hereto agree that in the event that either the
length of time or the geographic area set forth herein is deemed too
restrictive in any court proceeding, the court may reduce such
restrictions to those which it deems reasonable under the circumstances.
5.5 EQUITABLE RELIEF. Any action by Employee contrary to
the restrictive covenants contained in this Section 5 may as a matter of
course be restrained by equitable or injunctive process issued out of
any court of competent jurisdiction, in addition to any other remedies
provided in law. In the event of the breach of Employee's covenants as
set forth in this Section 5 and Angelica's obtaining of injunctive
relief, the period of restrictions set forth herein shall commence from
the date of the issuance of the order which enjoins such activity.
SECTION 6: MISCELLANEOUS.
6.1 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 Angelica shall be directed to the
attention of the Chief Executive Officer of Angelica, 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 Employee
------------------
Alan D. Wilson
206 Chalon Drive
Cary, North Carolina 27511
Notice to Angelica
------------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attn: Chief Executive Officer
6.2 WAIVER. Employee's or Angelica's failure to insist
upon strict compliance with any provision of this Agreement or the
failure to assert any right Employee or Angelica may have hereunder
shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement and shall not operate or be
construed as a waiver of any subsequent breach of the same provision.
-9-
<PAGE>
<PAGE>
6.3 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.
6.4 SUCCESSORS. This Agreement shall be binding upon and
inure to the benefit of any successor of Angelica and any such successor
shall be deemed to be substituted for Angelica under the terms of this
Agreement. Angelica shall 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 Angelica to assume
expressly and agree to perform the provisions of this Agreement as if no
such succession had taken place. As used in this Agreement, "Angelica"
shall mean Angelica as hereinbefore defined or any successor to
Angelica's business and/or assets which assumes and agrees to perform
this Agreement.
6.5 ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes any prior written or oral agreements, understandings,
discussions or negotiations with respect thereto.
IN WITNESS WHEREOF, Employee and Angelica, 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/ Alan D. Wilson
-----------------------------------
Alan D. Wilson
ANGELICA CORPORATION
By /s/ Don W. Hubble
---------------------------------
Name: Don W. Hubble
------------------------------
Title: Chairman, President & CEO
-----------------------------
-10-
<PAGE>
EIGHTEENTH AMENDMENT
TO
ANGELICA CORPORATION
RETIREMENT SAVINGS PLAN
WHEREAS, Angelica Corporation, a corporation duly organized and
existing under the laws of the State of Missouri ("Company"),
established and continues to maintain the Angelica Corporation
Retirement Savings Plan ("Plan"); and
WHEREAS, effective June 1, 1999, the Company desires to amend the
Plan.
NOW, THEREFORE, the Plan is hereby amended, effective June 1,
1999, in the following respects:
I.
Section 1.13 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"1.13. "Enrollment Date" shall mean the first day
of a calendar month."
II.
Section 3.1 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"3.1 Each Employee on June 1, 1999, who was a
Participant in the Plan on May 31, 1999, shall continue
to participate in the Plan on June 1, 1999."
III.
Section 3.2 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"3.2 Each Employee on or after June 1, 1999 who
is not a Participant in the Plan on May 31, 1999, shall
be eligible to participate in the Plan on the Enrollment
Date coincident with or next following the earlier of the
date such Employee meets the following requirements:
<PAGE>
<PAGE>
(1) the Employee completes six (6) months of
service (such six (6) months of service
shall begin on the date the Employee is
first credited with an Hour of Service)
and attains the age of twenty-one (21)
years; or
(2) completes three (3) Years of Eligibility
Service.
Provided, however, that an Employee who had
previously been employed by a Participating Employer and
who had been a Participant in the Plan in accordance with
this Section 3.2 shall again be eligible to participate
in the Plan as of the Enrollment Date coincident with or
next following the date he is reemployed by the
Participating Employer."
IN WITNESS WHEREOF, the Company has executed this Eighteenth
Amendment and affixed its corporate seal hereto by it duly authorized
officer on this 25th day of May, 1999.
ANGELICA CORPORATION
By /s/ Don W. Hubble
-------------------------------------
Chairman of the Board,
President and Chief Executive Officer
[SEAL]
WITNESSED BY:
/s/ Steven L. Frey
- ----------------------------------
Secretary
-2-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements for period ended July 31, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> JUL-31-1999
<CASH> 10,974
<SECURITIES> 0
<RECEIVABLES> 59,156
<ALLOWANCES> (3,392)
<INVENTORY> 117,591
<CURRENT-ASSETS> 189,253
<PP&E> 210,313
<DEPRECIATION> 115,519
<TOTAL-ASSETS> 322,644
<CURRENT-LIABILITIES> 47,141
<BONDS> 89,052
<COMMON> 9,472
0
0
<OTHER-SE> 156,437
<TOTAL-LIABILITY-AND-EQUITY> 322,644
<SALES> 111,607
<TOTAL-REVENUES> 236,920
<CGS> 71,892
<TOTAL-COSTS> 171,781
<OTHER-EXPENSES> 54,050
<LOSS-PROVISION> 650
<INTEREST-EXPENSE> 4,332
<INCOME-PRETAX> 6,107
<INCOME-TAX> 2,321
<INCOME-CONTINUING> 3,786
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,786
<EPS-BASIC> .44
<EPS-DILUTED> .44
</TABLE>
