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
(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.
-2-
(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.
-3-
(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
-4-
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
-5-
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.
-6-
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
- --
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
-7-
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.
-8-
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
------------------
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
-9-
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
--------------------------
-10-