<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
October 30, 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 December 1, 1999 was 8,675,682 shares.
==============================================================================
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<TABLE>
ANGELICA CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
FOR OCTOBER 30, 1999 FORM 10-Q QUARTERLY REPORT
<CAPTION>
Page Number Reference
---------------------
Quarterly Report
to
Form 10-Q Shareholders
--------- ------------
<S> <C> <C>
PART I. FINANCIAL INFORMATION:
Consolidated Statements of Income -
Third Quarter and Three Quarters Ended
October 30, 1999 and October 31, 1998 3
Consolidated Balance Sheets -
October 30, 1999 and January 30, 1999 4
Consolidated Statements of Cash Flows -
Three Quarters Ended October 30, 1999
and October 31, 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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<PAGE>
ANGELICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED OCTOBER 30, 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 October 30,
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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<PAGE>
ANGELICA CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
AND FINANCIAL CONDITION
QUARTER ENDED OCTOBER 30, 1999
Analysis of Operations
- ----------------------
Combined sales and textile service revenues decreased 4.1 percent and
5.3 percent in the third quarter and three quarters ended October 30,
1999, respectively, compared with prior year periods. Textile Service
segment revenues decreased 5.8 percent and 4.2 percent for the third
quarter and three quarters, respectively, primarily due to the loss of
several large customers. The addition of new business in this segment
this year has not offset the amount of lost business. Earnings of this
segment declined 69.7 percent in the third quarter and 35.4 percent in
the three quarters as a result of the customer losses and the adverse
effects of certain underperforming plants, including the escalating cost
of entry-level labor across the country. Sales of the Manufacturing and
Marketing segment decreased 5.2 percent in the third quarter and 10.8
percent in the three quarters compared with the same periods last year
as a result of the previous 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.
Earnings of this segment increased 318.6 percent in the third quarter
and 76.4 percent in the three quarters, aided by better gross margins
and reductions in operating expenses. Life Retail Stores had a 5.3
percent increase in third quarter sales, as a result of a 4.7 percent
same-store sales increase together with volume from new stores and
acquisitions. Earnings decreased 37.6 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 20.3 percent to 23.4
percent in the third quarter. The decline in revenues in the
Manufacturing and Marketing and Textile Service segments has contributed
to this increase. Interest expense was $173,000 lower in the third
quarter as a result of the repayment of all short-term debt in fiscal
1999.
Financial Condition
- -------------------
The Company had working capital of $142,504,000 and a current ratio of
3.9 to 1 at October 30, 1999, compared with $137,894,000 and 3.4 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 35.1 percent
at the close of the quarter, down from 36.1 percent a year ago and 35.4
percent at the beginning of the year.
Operating activities provided a total cash flow of $20,201,000 in the
first three quarters compared with $46,943,000 in the same period last
year, with the decrease due to the fact that reductions in accounts
receivable, inventories and linens in service were lower in the three
quarters of this year versus last. Cash used in investing activities
was $2,118,000 compared with cash used a year ago of $7,414,000. Most
of the difference is the $3,741,000 proceeds
3
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<PAGE>
from sales of the Company's operations in the United Kingdom and the
Textile Service facility in Brea, California. Cash flows used in
financing activities in this year's three quarters reflect normal
sinking fund payments of long-term debt and the payment of dividends.
For the prior year period, cash flows used in financing activities
included $26,200,000 reduction of short-term debt and the purchase of
447,550 shares of treasury stock for $7,423,000. 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 has been 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 nearing completion in the process of addressing its Y2K
issues which may not be information technology based, including
contingency options to address unforeseen problems.
The Company is close to completion of a comprehensive integrated testing
program. 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. As of October 30,
1999, all testing, with the exception of two systems tests, have been
completed. The final two tests will be completed by December 3, 1999.
While the Company currently believes it will complete its Y2K effort by
December, 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 $2.8 million, of which
approximately $2.7 million has
4
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been expended as of October 30, 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.
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
TEXTILE SERVICES IMAGE APPAREL INNOVATION VALUE
Angelica Corporation
424 South Woods Mill Road
[Angelica logo] Chesterfield, Missouri 63017-3406
Tel: 314.854.3800
November 19, 1999
Dear Shareholder:
As indicated in our November 5, 1999 press release, third quarter
results were a disappointment and were below last year's comparable
quarter by a significant amount. Earnings per share for the quarter were
$.07 compared with $.31 a year ago, as we experienced a continuation of
the problems which had affected second quarter results.
In the third quarter, combined sales and textile service revenues were
$116,578,000 compared with $121,586,000 in last year's third quarter, a
decrease of 4.1 percent. Pretax income was $1,051,000 compared with
$4,550,000 last year, and third quarter net income was $652,000 versus
$2,822,000 in the comparable prior period. For the first three quarters
of this fiscal year, combined sales and textile service revenues were
5.3 percent lower at $353,497,000 compared with $373,460,000 in the same
period last year. Pretax income was $7,158,000 this year versus
$11,370,000 last year, and net income decreased to $4,438,000 compared
with $7,050,000 in the first three quarters last year. Earnings per
share for the three quarters were $.51, compared with $.77 last year, a
reduction of 33.8 percent.
The most significant profit shortfall was in our Textile Services
business segment. Revenues in this segment declined 5.8 percent to
$60,139,000 compared with $63,840,000 in the third quarter last year,
and third quarter operating earnings declined 69.7 percent to $1,662,000
versus $5,483,000 last year. While we added more new business so far
this year than in any comparable period in our history -- much of it in
non-traditional healthcare markets such as clinics -- we have also lost
more acute care hospital business this year than we have historically.
In addition, there have been downward pressures on price levels in the
textile rental business as large acute care hospitals are suffering
financially. The Balanced Budget Act of 1997 reduced the level of
reimbursement to the healthcare industry, and delays in payments by
insurance companies have become commonplace. Both of these factors
negatively affect our ability to increase prices, especially in the face
of aggressive competitive actions. Prices must be increased to offset
costs, which continue to escalate. The cost of labor is increasing
across the country, especially at the entry level, which is the profile
of the majority of our workforce. Not only have base labor costs
increased, but also the relative non-availability of labor aggravates
turnover and the resulting lower productivity increases our costs as
well. Labor is our largest single cost factor, at about 38 percent of
revenue, therefore these problems have severely hampered our ability to
increase -- or even maintain -- operating earnings for the Textile
Services business segment. We will continue to emphasize the programs
started a year ago to improve our sales effort in this segment. At the
same time, we will attempt to find ways to offset the impact of higher
labor costs, such as closing and consolidating poorly-performing plants
into more efficient plants, and introducing additional labor-saving
equipment in appropriate locations.
In the third quarter, the Manufacturing and Marketing segment's sales
(before intersegment sales) declined 5.2 percent to $38,274,000 compared
with $40,368,000 last year, but all of the decrease was intentional as
we have exited value-destroying market segments. Operating earnings
continue to improve over last year's depressed levels, reaching
$1,553,000 in the third quarter compared with $371,000 last year. While
this is a significant 318.6 percent increase, earnings are growing more
slowly than anticipated. This is a consequence of our inability so far
this year to gain a sufficient volume increase in the retained core
market segments of this business. The weakest market segment is
healthcare, as some of the same issues affecting our Textile Services
segment are challenging this market as well. Our cost of goods has
improved, and we have reduced operating expenses on an
<PAGE>
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absolute basis. Customer service has improved dramatically, with
backlogs being essentially eliminated. As we continue to be more cost
competitive, and as customer satisfaction improves, we are convinced
that increased sales volume will occur across all market segments.
In the third quarter, Life Retail Stores had a same-store sales increase
of 4.7 percent, which followed a 4.2 percent increase in the second
quarter. Overall, third quarter sales increased 5.3 percent to
$24,372,000 compared with $23,149,000 last year. Operating earnings of
this segment declined 37.6 percent to $1,411,000 from $2,262,000 in the
third quarter last year. We are beginning to benefit from a lower cost
of goods sold as we are now sourcing some products more effectively. We
are also in the process of sizing our stores more appropriately for the
marketplace and, as time progresses, these slightly larger stores will
be more efficient, thereby reducing our operating expenses on a
percentage basis. We are still intending to pursue aggressively the
additional channels of e-commerce and catalogue distribution, which
should add to future sales and provide operating earnings improvements.
In line with our November 5th announcement that we would explore
strategic and financial alternatives to maximize shareholder value, with
the assistance of our investment banker, Banc of America Securities LLC,
we are preparing an Offering Memorandum for the possible sale or merger
of the Company or its business segments. This should be ready for
distribution to interested parties by the middle of December. On this
basis, we could expect to have legitimate expressions of interest early
in calendar 2000, although the whole process could take as long as six
months. Concurrent with exploring strategic alternatives, we will
continue our value-building steps for our Company. These include
continuing to improve our balance sheet and to take appropriate steps to
increase the future earnings potential of each of our business segments.
Our turnaround, while it is not progressing as rapidly as we would like,
is indeed occurring.
Certainly, your management team is disappointed with the results of the
third quarter, especially since it is a continuation of the weaker
results seen in the second quarter. We are no less committed to be
value driven and customer focused in our efforts to increase the value
of your investment. We believe that by evaluating strategic
alternatives, and at the same time pursuing the turnaround, that we will
optimize your return in the long term.
Respectfully submitted,
/s/ Don W. Hubble
Don W. Hubble
Chairman, President and
Chief Executive Officer
<PAGE>
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<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands, except per share amounts)
<CAPTION>
Third Quarter Ended Three Quarters Ended
----------------------------- ----------------------------
October 30, October 31, October 30, October 31,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Textile service revenues $ 60,139 $ 63,840 $185,453 $193,654
Net sales 56,439 57,746 168,044 179,806
----------- ----------- ----------- -----------
116,578 121,586 353,497 373,460
----------- ----------- ----------- -----------
Cost of textile services 49,745 52,031 149,634 155,491
Cost of goods sold 35,719 37,460 107,611 119,069
----------- ----------- ----------- -----------
85,464 89,491 257,245 274,560
----------- ----------- ----------- -----------
Gross profit 31,114 32,095 96,252 98,900
----------- ----------- ----------- -----------
Selling, general and
administrative expenses 27,298 24,730 81,218 78,181
Interest expense 2,147 2,320 6,479 7,468
Other expense, net 618 495 1,397 1,881
----------- ----------- ----------- -----------
30,063 27,545 89,094 87,530
----------- ----------- ----------- -----------
Income before income taxes 1,051 4,550 7,158 11,370
Provision for income taxes 399 1,728 2,720 4,320
----------- ----------- ----------- -----------
Net income $ 652 $ 2,822 $ 4,438 $ 7,050
=========== =========== =========== ===========
Basic and diluted earnings per share <F*> $ 0.07 $ 0.31 $ 0.51 $ 0.77
=========== =========== =========== ===========
Dividends per common share $ 0.24 $ 0.24 $ 0.72 $ 0.72
=========== =========== =========== ===========
<FN>
Comprehensive income consisting of net income and foreign currency
translation adjustments, totaled $870 and $2,796 for the quarters ended
October 30, 1999 and October 31, 1998, respectively; and $5,048 and
$6,843 for the three quarters ended October 30, 1999 and October 31,
1998, respectively.
<F*> Based upon weighted average number of common and common equivalent
shares outstanding of 8,699,906 and 9,122,454 for fiscal periods of 2000
and 1999, respectively.
</TABLE>
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<TABLE>
CONSOLIDATED BALANCE SHEETS
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands)
<CAPTION>
October 30, January 30,
1999 1999
----------- -----------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and short-term investments $ 14,260 $ 6,876
Receivables, less reserve of $3,724 and $2,623 56,829 57,240
Inventories:
Raw material 16,549 20,358
Work in progress 4,733 5,995
Finished goods 59,795 62,277
----------- -----------
81,077 88,630
Linens in service 33,497 39,030
Prepaid expenses 5,026 4,310
Income taxes 180 1,303
----------- -----------
Total Current Assets 190,869 197,389
----------- -----------
Property and Equipment 211,370 213,508
Less -- reserve for depreciation 117,519 111,877
----------- -----------
93,851 101,631
----------- -----------
Goodwill 6,773 7,096
Other acquired assets 5,089 7,011
Cash surrender value of life insurance 19,322 18,640
Miscellaneous 6,678 7,323
----------- -----------
37,862 40,070
----------- -----------
Total Assets $322,582 $339,090
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current maturities of long-term debt $ 3,138 $ 5,841
Accounts payable 24,017 24,635
Accrued expenses 21,210 30,842
----------- -----------
Total Current Liabilities 48,365 61,318
----------- -----------
Long-Term Debt, less current maturities 88,927 90,910
Other Long-Term Obligations 20,606 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 167,820 170,111
Accumulated other comprehensive income (1,675) (2,285)
Common Stock in treasury, at cost: 795,757 and 800,830 (15,129) (15,691)
----------- -----------
164,684 165,803
----------- -----------
Total Liabilities and Shareholders' Equity $322,582 $339,090
=========== ===========
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands)
<CAPTION>
Three Quarters Ended
----------------------------------
October 30, October 31,
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 4,438 $ 7,050
Non-cash items included in net income:
Depreciation 10,222 10,411
Amortization of acquisition costs 2,331 2,586
Change in working capital components,
net of businesses acquired 3,707 28,275
Other, net (497) (1,379)
----------- -----------
Net cash provided by operating activities 20,201 46,943
----------- -----------
Cash Flows from Investing Activities:
Expenditures for property and equipment, net (5,354) (5,379)
Cost of businesses acquired (505) (2,035)
Proceeds from sale of assets 3,741 --
----------- -----------
Net cash used in investing activities (2,118) (7,414)
----------- -----------
Cash Flows from Financing Activities:
Long-term and short-term debt repayments (4,686) (28,252)
Dividends paid (6,246) (6,618)
Treasury stock purchased (360) (7,423)
Other, net 593 218
----------- -----------
Net cash used in financing activities (10,699) (42,075)
----------- -----------
Net increase (decrease) in cash and
short-term investments 7,384 (2,546)
Balance at beginning of year 6,876 2,833
----------- -----------
Balance at end of period $ 14,260 $ 287
=========== ===========
Supplemental cash flow information:
Income taxes paid $ 1,389 $ 1,872
Interest paid $ 6,764 $ 6,669
</TABLE>
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<TABLE>
BUSINESS SEGMENT INFORMATION
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands)
<CAPTION>
Third Quarter Ended Three Quarters Ended
----------------------------- ----------------------------
October 30, October 31, October 30, October 31,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales and textile service revenues:
Textile Services $ 60,139 $ 63,840 $185,453 $193,654
Manufacturing and Marketing 38,274 40,368 118,624 133,051
Retail Sales 24,372 23,149 67,753 64,100
Intersegment sales (6,207) (5,771) (18,333) (17,345)
----------- ----------- ----------- -----------
$116,578 $121,586 $353,497 $373,460
=========== =========== =========== ===========
Earnings:
Textile Services $ 1,662 $ 5,483 $ 9,740 $ 15,067
Manufacturing and Marketing 1,553 371 5,220 2,959
Retail Sales 1,411 2,262 2,972 4,920
Interest, corporate expenses and other, net (3,575) (3,566) (10,774) (11,576)
----------- ----------- ----------- -----------
$ 1,051 $ 4,550 $ 7,158 $ 11,370
=========== =========== =========== ===========
</TABLE>
<TABLE>
SUMMARY FINANCIAL POSITION DATA
Angelica Corporation and Subsidiaries
Unaudited (Dollars in thousands, except ratios, shares and per share amounts)
<CAPTION>
Three Quarters Ended
-----------------------------
October 30, October 31,
1999 1998
----------- -----------
<S> <C> <C>
Working capital $ 142,504 $ 137,894
Current ratio 3.9 to 1 3.4 to 1
Long-term debt $ 88,927 $ 94,658
Shareholders' equity $ 164,684 $ 167,335
Percent long-term debt to debt and equity 35.1% 36.1%
Equity per common share $ 18.98 $ 19.13
Common shares outstanding 8,675,781 8,749,290
</TABLE>
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibit and Reports on Form 8-K
---------------------------------------
(a) See Exhibit Index included herein on pages 8-13.
(b) Reports on Form 8-K - There were no reports on Form 8-K
filed for the third quarter ended October 30, 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: December 7, 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)
7
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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 Regulation S-K, the Registrant will
furnish to the Commission upon request copies of long-term debt
instruments and related agreements.
8
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<PAGE>
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**>
9
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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**>
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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**>
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10.24 Employment Agreement between the Company and Alan D. Wilson, dated
July 14, 1999. Filed as Exhibit 10.24 to Form 10-Q for fiscal
quarter ended July 31, 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 October 1, 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 Employment Agreement between the Company and Denis R. Raab, dated
August 23, 1999.<F*>
10.33 Employment Agreement between the Company and Daniel J. Westrich,
dated October 1, 1999.<F*>
10.34 Employment Agreement between the Company and James W. Shaffer,
dated October 1, 1999.<F*>
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10.35 Amendment No. 3 to the Restated Angelica Corporation Stock Bonus
and Incentive Plan, dated October 21, 1999.<F*>
27. Financial Data Schedule<F*>
13
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Exhibit 10.29
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into as of the 1st
day of October 1999, by and between Angelica Corporation, a Missouri
corporation ("Angelica"), and Charles D. Molloy, Jr., an individual
("Employee").
WHEREAS, Angelica currently employs Employee as Vice President of
Angelica and President of Angelica's Image Apparel Business Segment and
Angelica and Employee wish 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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(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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(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 AN 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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(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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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
Image Apparel Business Segment which manufactures,
markets and sells image and business career apparel
either as a division or as a separate subsidiary or
subsidiaries.
(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 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
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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 Image Apparel 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 $ 189,000 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
compensation on an annual basis ("Incentive Compensation") under the
Incentive Compensation Plan or any incentive compensation plan which is
generally available to other similarly situated executives of Angelica.
The Incentive Compensation during the first year of the Employment
Period shall range from 0 to 60% of Employee's Annual Base Salary. The
Incentive Compensation 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.
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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 at an assigned
formula rate of 33% and otherwise 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 benefit plans and policies, Angelica shall pay Employee
an amount equal to Employee's then-current Annual Base Salary. Said
amount shall be paid in equal, semi-monthly payments, less applicable
taxes, withholdings and standard deductions. 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
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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. In the case of any termination of Employee's employment
with Angelica in connection with a Triggering Transaction for any
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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.
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.
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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
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Charles D. Molloy, Jr.
986 Barnard College Ln.
University City, Missouri 63130
Notice to Angelica
------------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attention: 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.
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
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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/ Charles D. Molloy, Jr.
-----------------------------
Charles D. Molloy, Jr.
ANGELICA CORPORATION
By /s/ Don W. Hubble
------------------------------
Name: Don W. Hubble
---------------------------
Title: Chairman, President & CEO
--------------------------
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Exhibit 10.32
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into as of the
23rd day of August 1999, by and between Angelica Corporation, a Missouri
corporation ("Angelica"), and Denis R. Raab, an individual ("Employee").
WHEREAS, Angelica currently employs Employee as Vice
President of Angelica and President of Angelica's Life Uniform and Shoe
Shops Business Segment and Angelica and Employee wish 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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(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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(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 AN 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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(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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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
Life Uniform and Shoe Shops Business Segment which
operates specialty retail stores, either as a division
or as a separate subsidiary or subsidiaries, primarily
for a clientele of nurses and other health care
professionals.
(m) "TERM" means, initially a two-year period
commencing on the Effective Date and ending on the
date of the second 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 two years commencing on the
Effective Date, subject to automatic renewal for a Term of an additional
one year commencing immediately upon the end of the initial Term or the
then-current renewal
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<PAGE>
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 Life Uniform and Shoe Shops
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 $175,000 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
compensation on an annual basis ("Incentive Compensation") under the
Incentive Compensation Plan or any incentive compensation plan which is
generally available to other similarly situated executives of Angelica.
The Incentive Compensation during the first year of the Employment
Period shall range from 0 to 50% of Employee's Annual Base Salary. The
Incentive Compensation 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. The Incentive Compensation to be paid Employee during the
first twelve (12) months of the Employment Period shall not be less than
$60,000 (with said amount being pro-rated between Angelica's fiscal
years 2000 and 2001 i.e. approximately 5/12 of said amount paid for
fiscal year 2000 and the remainder paid for fiscal year 2001).
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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. Angelica agrees to recommend to the Compensation and
Organization Committee of the Board that a grant be made to Employee of
an option for 12,000 shares of Angelica common stock under Angelica's
1994 Performance Plan, such grant to be effective August 23, 1999 and on
terms and conditions similar to grants made to employees in comparable
positions.
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 at an assigned
formula rate of 30% and otherwise 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 benefit plans and policies, Angelica shall pay Employee
an amount equal to Employee's then-current Annual Base Salary. Said
amount shall be paid in equal, semi-monthly payments, less applicable
taxes, withholdings and standard deductions. 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
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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
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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. 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.
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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
------------------
Denis R. Raab
1511 Lake Shore Drive S.
Barrington, Illinois 60010
Notice to Angelica
------------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attention: 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.
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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/ Denis R. Raab
--------------------------------
Denis R. Raab
ANGELICA CORPORATION
By /s/ Don W. Hubble
-------------------------------
Name: Don W. Hubble
----------------------------
Title: Chairman, President & CEO
---------------------------
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<PAGE>
Exhibit 10.33
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into as of the
1st day of October, 1999, by and between Angelica Corporation, a
Missouri corporation ("Angelica"), and Daniel J. Westrich, an individual
("Employee").
WHEREAS, Angelica currently employs Employee as Vice
President - Information Systems of Angelica and Angelica and Employee
wish 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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(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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(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 AN OPERATING LINE OF
BUSINESS" means:
(i) when used with reference to the stock
or other equity interests of an
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 an 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 an 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>
<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: (i)
Angelica's Life Uniform and Shoe Shops Business
Segment which operates specialty retail stores, either
as a division or as a separate subsidiary or
subsidiaries, primarily for a clientele of nurses and
other health care professionals, (ii) 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, and
(iii) Angelica's Manufacturing and Marketing Business
Segment which provides image and business career
apparel, either as a division or as a separate
subsidiary or subsidiaries, primarily to the health
services, hospitality and selected other service
industries.
(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) one or more
Dispositions of an Operating Line of Business
involving at least two of Angelica's Operating Lines
of Business.
(o) "TRIGGERING TRANSACTION DATE" shall mean the
date that the Triggering Transaction occurs.
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<PAGE>
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 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 -
Information Systems of Angelica, subject to the reasonable directions of
the Chief Financial 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 Financial 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 $140,000 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 incentive
compensation on an annual basis ("Incentive Compensation") under the
Incentive Compensation Plan or any incentive compensation plan which is
generally available to other similarly situated executives of Angelica.
The Incentive Compensation during the first year of the Employment
Period shall range from 0% to 40% of Employee's Annual Base Salary. The
Incentive Compensation 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.
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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.
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.
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 benefit plans and policies, Angelica shall pay Employee
an amount equal to 1/12th of the Employee's then-current Annual Base
Salary multiplied by the number of years of service of Employee with
Angelica; provided, however, that said amount shall not, under any
circumstances, exceed Employee's then-current Annual Base Salary nor be
less than one-half of Employee's then-current Annual Base Salary. Said
amount shall be paid in equal, semi-monthly payments, less applicable
taxes, withholdings and standard deductions. 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 two (2.0) 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
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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. 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
Angelica 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.
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
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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
------------------
Daniel J. Westrich
2519 River Wind Ct.
St. Louis, Missouri 63129
Notice to Angelica
------------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attention: 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.
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.
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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/ Daniel J. Westrich
--------------------------------
Daniel J. Westrich
ANGELICA CORPORATION
By /s/ Don W. Hubble
-------------------------------
Name: Don W. Hubble
----------------------------
Title: Chairman, President & CEO
---------------------------
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Exhibit 10.34
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into as of the
1st day of October 1999, by and between Angelica Corporation, a Missouri
corporation ("Angelica"), and James W. Shaffer, an individual ("Employee").
WHEREAS, Angelica currently employs Employee as Vice
President and Treasurer of Angelica and Angelica and Employee wish 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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(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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(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 AN OPERATING LINE OF
BUSINESS" means:
(i) when used with reference to the stock
or other equity interests of an
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 an 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 an 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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(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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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: (i)
Angelica's Life Uniform and Shoe Shops Business
Segment which operates specialty retail stores, either
as a division or as a separate subsidiary or
subsidiaries, primarily for a clientele of nurses and
other health care professionals, (ii) 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, and
(iii) Angelica's Manufacturing and Marketing Business
Segment which provides image and business career
apparel, either as a division or as a separate
subsidiary or subsidiaries, primarily to the health
services, hospitality and selected other service
industries.
(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) one or more
Dispositions of an Operating Line of Business
involving at least two of Angelica's Operating Lines
of Business.
(o) "TRIGGERING TRANSACTION DATE" shall mean the
date that the Triggering Transaction occurs.
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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 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
and Treasurer of Angelica, subject to the reasonable directions of the
Chief Financial 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 Financial 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 $115,000 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 incentive
compensation on an annual basis ("Incentive Compensation") under the
Incentive Compensation Plan or any incentive compensation plan which is
generally available to other similarly situated executives of Angelica.
The Incentive Compensation during the first year of the Employment
Period shall range from 0% to 40% of Employee's Annual Base Salary. The
Incentive Compensation 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.
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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.
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.
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 benefit plans and policies, Angelica shall pay Employee
an amount equal to 1/12th of the Employee's then-current Annual Base
Salary multiplied by the number of years of service of Employee with
Angelica; provided, however, that said amount shall not, under any
circumstances, exceed Employee's then-current Annual Base Salary nor be
less than one-half of Employee's then-current Annual Base Salary. Said
amount shall be paid in equal, semi-monthly payments, less applicable
taxes, withholdings and standard deductions. 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 two (2.0) 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
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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. 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
Angelica 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.
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
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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
------------------
James W. Shaffer
319 Berry Bush Ct.
Ballwin, Missouri 63011
Notice to Angelica
------------------
Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attention: 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.
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.
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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/ James W. Shaffer
--------------------------------
James W. Shaffer
ANGELICA CORPORATION
By /s/ Don W. Hubble
-------------------------------
Name: Don W. Hubble
----------------------------
Title: Chairman, President & CEO
---------------------------
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Exhibit 10.35
AMENDMENT NO. 3
TO THE RESTATED
ANGELICA CORPORATION
STOCK BONUS AND INCENTIVE PLAN
The Restated Angelica Corporation Stock Bonus and Incentive Plan, as
amended by Amendment No. 1 dated March 28, 1996 and Amendment No. 2
dated March 25, 1998 (as amended, the "Plan"), is hereby further amended
effective August 1, 1999 as follows:
1. Section 2.1(w) of the Plan is deleted in its entirety and the
following is substituted in lieu thereof:
"(w) "Retirement" means termination of employment
with the Group by a Participant who has either attained the
age of 62 or, alternatively, attained the age of 55 and
completed at least ten years of service with the Group.
Years of service for this purpose shall be determined under
those terms of the Angelica Corporation Pension Plan, as
amended, which apply to vesting."
2. Section 9.7 of the Plan is deleted in its entirety and the
following is substituted in lieu thereof:
"9.7 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. If a
Participant's employment with all members of the Group is
terminated by reason of the Participant's Retirement at the
age of 62 or older on the date of such Retirement, the
Matching Shares that remain unvested on the date of such
Retirement will fully vest and the Periods of Restriction
applicable to the Participant's Matching Shares and Elected
Shares shall terminate automatically. If a Participant's
employment with all members of the Group is terminated by
reason of the Participant's Retirement ( as defined in
Section 2.1(w) of this Plan) prior to the age of 62 on the
date of such Retirement, the Matching Shares that remain
unvested shall fully vest but the applicable Periods of
Restriction on both the Matching Shares and the Elected
Shares shall continue until the respective expiration dates
of such Periods of Restriction; provided, however, that if
the Participant dies after such Retirement but before the
end of the applicable Periods of Restriction, the Periods of
Restriction applicable to the deceased Participant's
Matching Shares and Elected Shares shall terminate
automatically. Upon the termination or expiration of the
applicable Periods of Restriction, the Matching Shares and
Elected Shares subject thereto shall thereupon be free of
restrictions and freely transferable by the Participant
except as otherwise provided pursuant to Section 9.3 of the
Plan."
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3. Section 13 of the Plan is deleted in its entirety and the
following is substituted in lieu thereof:
"SECTION 13
TAX WITHHOLDING
The Company shall be entitled to withhold, or require
the Participant to remit to the Company, any amount of any
tax attributable to any amounts payable or shares
deliverable under the Plan after giving the Participant
notice as far in advance as is practicable of the amount of
tax required to be withheld. The Company may defer making
payment or delivery as to any benefit due under the Plan
until any such tax withheld or the Participant remits an
amount equal to the tax required to be withheld. The
Participant may, by notice to the Company at the time the
requirement for such tax withholding is first established,
elect to have such withholding obligation satisfied by the
reduction in the number of shares of capital stock of the
Company that would otherwise be deliverable to the
Participant under the Plan, with the reduction to be
calculated based upon the average of the high and low market
prices of the Company's stock on the New York Stock Exchange
or such other national securities exchange upon which the
Company's stock is then listed."
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed on this 21st day of October, 1999.
----
ANGELICA CORPORATION
By /s/ Don W. Hubble
-----------------------------------
Don W. Hubble
Chairman, President and CEO
ATTEST:
/s/ Steven L. Frey
- -------------------------
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 October 30, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> OCT-30-1999
<CASH> 14,260
<SECURITIES> 0
<RECEIVABLES> 60,553
<ALLOWANCES> (3,724)
<INVENTORY> 114,574
<CURRENT-ASSETS> 190,869
<PP&E> 211,370
<DEPRECIATION> 117,519
<TOTAL-ASSETS> 322,582
<CURRENT-LIABILITIES> 48,365
<BONDS> 88,927
<COMMON> 9,472
0
0
<OTHER-SE> 155,212
<TOTAL-LIABILITY-AND-EQUITY> 322,582
<SALES> 168,044
<TOTAL-REVENUES> 353,497
<CGS> 107,611
<TOTAL-COSTS> 257,245
<OTHER-EXPENSES> 81,638
<LOSS-PROVISION> 977
<INTEREST-EXPENSE> 6,479
<INCOME-PRETAX> 7,158
<INCOME-TAX> 2,720
<INCOME-CONTINUING> 4,438
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,438
<EPS-BASIC> .51
<EPS-DILUTED> .51
</TABLE>
