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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 29, 2006
ANGELICA CORPORATION
(Exact name of registrant as specified in its charter)
MISSOURI 1-5674 43-0905260
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
424 SOUTH WOODS MILL ROAD
CHESTERFIELD, MISSOURI 63017-3406
(Address of principal executive office)(Zip Code)
(314) 854-3800
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
TRANSITION ARRANGEMENT WITH DAVID A. VAN VLIET
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In connection with the resignation of David A. Van Vliet as President
and Chief Operating Officer of the Company (as further described in Item 5.02
of this Form 8-K), Angelica Corporation (the "Company") and Mr. Van Vliet
agreed upon a transition plan pursuant to which Mr. Van Vliet will be
available for consultation by Company personnel for a period of 30 days after
the September 30, 2006 effective date of his resignation. The Company has
agreed to pay Mr. Van Vliet $27,083.33 for such services, which is an amount
equal to Mr. Vliet's monthly base salary and will be paid in two installments
consistent with the Company's normal payroll cycle.
SETTLEMENT AGREEMENT WITH STEEL PARTNERS, L.L.C. AND STEEL PARTNERS II, L.P.
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On August 30, 2006, the Company and Steel Partners L.L.C. and Steel
Partners II, L.P. (collectively, "Steel") entered into a Settlement Agreement
pursuant to which (i) the Company granted Steel representation on the Board of
Directors of the Company, (ii) Steel agreed to restrict its actions with
respect to transactions involving the Company or the Company's assets or
stock, and (iii) the Company agreed to certain corporate governance changes,
including amendments to certain provisions of the Company's bylaws.
Pursuant to the Settlement Agreement, two persons designated by Steel
were immediately appointed to fill the vacancies on the Company's Board of
Directors resulting from the resignation of one of the Company's Class II
directors and one of the Company's Class III directors, such vacancies being
effective as of August 30, 2006. The details associated with the resignation
and appointment of directors, including agreements and understandings with
respect to the Steel director designees, are further described in Item 5.02 of
this Form 8-K. Steel has agreed to vote all of its shares of Company common
stock for the election of Stephen M. O'Hara and Ronald J. Kruszewski, the
Board's nominees, as Class I directors at the 2006 Annual Meeting of
Shareholders.
Also as part of the Settlement Agreement, Steel agreed to withdraw
its slate of nominees for director and its shareholder proposals that it had
proposed for the 2006 Annual Meeting of Shareholders. In addition, Steel
agreed that it will not and will cause each of its affiliates and associates
(as defined under the Securities Exchange Act of 1934) not to take any of the
following actions:
o Effect, propose, assist, encourage or otherwise participate in:
o An acquisition of beneficial ownership of the Company's
voting securities in excess of 19.99% of the then current
outstanding voting securities of the Company;
o A tender or exchange offer except in response to a hostile
tender or exchange offer commenced by a non-affiliated or
non-associated third party;
o A merger, consolidation, share exchange, business
combination, sale of assets, recapitalization,
restructuring, liquidation, dissolution or other
extraordinary transaction involving the Company, a material
portion of its business or a substantial portion of its
assets, unless the Company determines to conduct a sale
process;
o A solicitation of proxies or any other participation in an
election contest, except with respect to the election of
directors at the 2007 Annual Meeting of Shareholders.
o Except for nominating up to three individuals for election as
director at the 2007 Annual Meeting of Shareholders, propose any
matter for submission to shareholders provided that this provision is
not intended to limit the Steel director designees' ability to act in
their respective capacities as directors;
o Form or join a "group" (as the term is defined under the Securities
Exchange Act of 1934) in connection with its Company voting
securities;
o Except with respect to the director nominees for the 2007 Annual
Meeting of Shareholders, give a proxy with respect to its Company
voting securities;
o Deposit its Company voting securities in a voting trust or similar
arrangement with respect to the voting of its Company voting
securities;
o Except for nominating of and voting for Steel's director nominees
for the 2007 Annual Meeting of Shareholders, take action that seeks
to affect the control of the management or the Board of Directors
provided that this provision is not intended to limit the Steel
director designees' ability to act in their respective capacities as
directors; and
o Call or seek to call a meeting of shareholders of the Company other
than through participation of the Steel director designees as
directors of the Company and with the prior approval of the
disinterested directors of the Company.
In addition, pursuant to the Settlement Agreement, the Company
amended its bylaws to provide for the "phased-in" declassification of the
Board of Directors and to define the authority and responsibilities of the
"lead independent director." Each of these bylaw amendments are further
described in Item 5.03 of this Form 8-K. As part of the declassification plan,
certain of the Company's current directors were assigned to different classes
for the transition period, all as more fully discussed in Item 5.02 of this
Form 8-K.
The Settlement Agreement also requires the Board of Directors to hold
a Board meeting before August 30, 2007 to consider the separation of the roles
of the Chairman and the Chief Executive Officer. The Company also agreed to
disband the Special Committee which had been formed to address shareholder
matters because its purpose was fulfilled upon the execution of the Settlement
Agreement. In addition, the Company agreed to reimburse Steel for up to
$75,000 of its reasonable attorneys fees associated with the Settlement
Agreement and the nominations and proposals of Steel for presentation at the
2006 Annual Meeting of Shareholders.
Each of the Company and Steel agreed not to sue one another with
respect to conduct preceding August 30, 2006. The Company also agreed to
abstain from taking certain "anti-takeover" actions prior to the conclusion of
the 2007 Annual Meeting of Shareholders. In addition, if Steel and its
affiliates and associates do not run an election contest for the Board of
Directors at the 2007 Annual Meeting, the Company agreed to not extend the
Company's rights plan beyond its current scheduled expiration date of
September 7, 2008 unless such an extension is either approved by a majority of
the Board of Directors (including one Steel director designee) or approved by
the holders of a majority of the Company's voting securities.
Steel also agreed to make any disposition of its shares of common
stock in open market transactions in a manner designed to effect an orderly
disposition of such shares or under any method approved by a majority of the
Company's disinterested directors.
Except for selected provisions regarding the re-nomination of the
Steel director designees in certain circumstances for the 2007 Annual Meeting
of Shareholders, the constitution of the Board in certain circumstances, the
covenant restricting litigation and confidentiality, the Settlement Agreement
between the Company and Steel will terminate at the conclusion of the 2007
Annual Meeting of Shareholders.
This summary is qualified in its entirety by the Settlement Agreement
between the Company and Steel which is attached as Exhibit 10.1 to this Form
8-K and incorporated by reference herein. A copy of the press release issued
by the Company on August 31, 2006 with respect to the Settlement Agreement
between the Company and Steel is attached as Exhibit 99.1 to this Form 8-K.
SETTLEMENT AGREEMENT WITH PIRATE CAPITAL LLC, JOLLY ROGER FUND LP, JOLLY ROGER
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OFFSHORE FUND LTD
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On August 30, 2006, the Company and Pirate Capital LLC, Jolly Roger
Fund LP and Jolly Roger Offshore Fund LTD (collectively, "Pirate") entered
into a Settlement Agreement pursuant to which Pirate agreed to restrict its
actions with respect to transactions involving the Company or the Company's
assets or voting securities. Pirate has also agreed to vote all of its
shares of common stock of the Company for the election of Stephen M. O'Hara
and Ronald J. Kruszewski, the Board's nominees, as Class I directors at the
2006 Annual Meeting of Shareholders.
In addition, Pirate agreed that it will not and will cause each of
its affiliates and associates (as such terms are defined under the Securities
Exchange Act of 1934) not to take any of the following actions:
o Effect, propose, assist, encourage or otherwise participate in:
o A tender or exchange offer except in response to a hostile
tender or exchange offer commenced by a non-affiliated or
non-associated third party;
o A merger, consolidation, share exchange, business
combination, sale of assets, recapitalization,
restructuring, liquidation, dissolution or other
extraordinary transaction involving the Company, a material
portion of its business or a substantial portion of its
assets, unless the Company determines to conduct a sale
process;
o A solicitation of proxies or any other participation in an
election contest.
o Propose any matter for submission to shareholders;
o Form or join a "group" (as the term is defined under the Securities
Exchange Act of 1934) in connection with its Company voting
securities;
o Give a proxy with respect to its Company voting securities to any
person not designated by the Company;
o Deposit its Company voting securities in a voting trust or similar
arrangement with respect to the voting of its Company voting
securities;
o Take action that seeks to affect the control of the management or the
Board of Directors; and
o Call or seek to call a meeting of shareholders of the Company.
Each of the Company and Pirate agreed not to sue one another with
respect to conduct preceding August 30, 2006.
Except for selected provisions regarding the covenant restricting
litigation and confidentiality, the Settlement Agreement between the Company
and Pirate will terminate at the conclusion of the 2006 Annual Meeting of
Shareholders or earlier under certain specific situations.
This summary is qualified in its entirety by the Settlement Agreement
between the Company and Pirate which is attached as Exhibit 10.2 to this Form
8-K and incorporated by reference herein. A copy of the press release issued
by the Company on August 31, 2006 with respect to the Settlement Agreement
between the Company and Pirate is attached as Exhibit 99.2 to this Form 8-K.
AMENDMENT TO RIGHTS PLAN
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On August 30, 2006, the Company amended its Rights Agreement, dated
as of August 27, 1998 (the "Rights Agreement") with UMB Bank, N.A. to set
forth in Exhibit A to the Rights Agreement the Amendment to Certificate of
Designation, Preferences and Rights of Class B Series 2 Junior Participating
Preferred Stock ("Preferred Stock") described in Item 5.03 below. The
description of the Amendment to Certificate of Designation, Preferences and
Rights of Class B Series 2 Junior Participating Preferred Stock set forth
below in Item 5.03 is incorporated by reference into this Item 1.01. In
addition, the Company made corresponding changes to Section 11(c) and Section
24 of the Rights Agreement relating to the change in the voting rights of the
Preferred Stock described in Item 5.03 below.
This summary is qualified in its entirety by Amendment No. 1 to the
Rights Agreement, which is attached hereto as Exhibit 4.1 to this Form 8-K and
incorporated by reference herein.
ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.
The description of the Amendment No. 1 to the Rights Agreement set
forth above in Item 1.01 is incorporated by reference into this Item 3.03.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
RESIGNATION OF DAVID A. VAN VLIET AS PRESIDENT AND CHIEF OPERATING OFFICER;
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APPOINTMENT OF STEPHEN M. O'HARA AS PRESIDENT
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On August 29, 2006, David Van Vliet resigned as President and Chief
Operating Officer of the Company, effective September 30, 2006 in order to
pursue an employment opportunity with a business that does not compete with
the Company. Stephen M. O'Hara, the Company's current Chairman and Chief
Executive Officer, will assume the additional title and responsibilities of
President, effective as of September 30, 2006. The press release issued by the
Company on August 31, 2006 is attached hereto as Exhibit 99.3 to this Form
8-K.
RESIGNATION OF SUSAN S. ELLIOTT AND DR. WILLIAM A. PECK AS DIRECTORS
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Susan S. Elliott and Dr. William A. Peck voluntarily resigned as
members of the Board of Directors of the Company, effective immediately prior
to the execution by all parties of the Settlement
Agreement among the Company and Steel on August 30, 2006. At the time of their
respective resignations, Ms. Elliott was a member of the Compensation and
Organization Committee and the Corporate Governance and Nominating Committee,
and Dr. Peck was a member of the Corporate Governance and Nominating
Committee.
REASSIGNMENT OF DR. RONALD N. RINER AND KELVIN R. WESTBROOK TO DIFFERENT
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CLASSES OF DIRECTORS
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As allowed for in the Settlement Agreement among the Company and
Steel and the Settlement Agreement among the Company and Pirate, Dr. Ronald N.
Riner and Kelvin R. Westbrook were reassigned to different classes of
directors immediately prior to the execution of the Settlement Agreements by
all of the parties thereto on August 30, 2006. Dr. Riner, who formerly was in
the class of directors which had a term that continues until the 2008 Annual
Meeting of Shareholders, was reassigned to Class II, the term of which
continues until the 2007 Annual Meeting of Shareholders. Mr. Westbrook, who
formerly was in the class of directors which had a term that continues until
the 2007 Annual Meeting of Shareholders, was reassigned to Class III, the term
of which continues until the 2008 Annual Meeting of Shareholders. There has
been no change to the committee assignments of Dr. Riner and Mr. Westbrook in
connection with the reassignment of their class of directors. Dr. Riner
continues to serve on the Audit Committee and the Corporate Governance and
Nominating Committee and Mr. Westbrook continues to serve on the Audit
Committee and the Compensation and Organization Committee. The independent
Special Committee upon which Mr. Westbrook also served has been disbanded
because its purpose was fulfilled upon the execution of the Settlement
Agreement with Steel.
APPOINTMENT OF JAMES HENDERSON AND JOHN QUICKE TO THE BOARD OF DIRECTORS
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In order to effect the terms of the Settlement Agreement between
the Company and Steel, James Henderson and John Quicke were appointed to the
Board of Directors of the Company as of the execution of the Settlement
Agreement by all parties on August 30, 2006. Mr. Henderson, age 48, has been
appointed as a Class III director to serve a term that will continue until
the 2008 Annual Meeting of Shareholders. Mr. Henderson is a Vice President
of Steel Partners, Ltd and is also a director and the Chief Executive
Officer of WebFinancial Corporation, a director and Chairman of Del Global
Technologies and a director of BNS Holdings, Inc. and SL Industries, Inc.
Mr. Quicke, age 56, has been appointed as a Class II director to serve a
term that will continue until the 2007 Annual Meeting of Shareholders. Mr.
Quicke is Vice President of Steel Partners, Ltd. and Chairman and Chief
Executive Officer of NOVT Corporation and is also a director and Vice
President of WHX Corporation. He formerly served as Vice Chairman and Chief
Executive Officer of Sequa Corporation.
Both Mr. Henderson and Mr. Quicke were appointed to the Board of
Directors pursuant to the terms of the Settlement Agreement between the
Company and Steel. Pursuant to the terms of the Settlement Agreement, if there
is a vacancy in one of the directorships designated by Steel during the term
of the Settlement Agreement, Steel will have the right to designate a person
to serve as the Steel designee to hold office for the unexpired term of the
directorship, subject to meeting the eligibility requirements contained in the
Company's corporate governance documents and applicable regulations. In the
event that Steel determines not to propose for nomination a slate of director
nominees in opposition to the Board of Director's slate for the 2007 Annual
Meeting of Shareholders, the Company has agreed to re-nominate and recommend
the re-election of the Steel director designee assigned to Class II at the
2007 Annual Meeting of Shareholders. Likewise, if Steel determines not to
propose a slate of director nominees in opposition to the Board's slate for
the 2008 Annual Meeting of Shareholders, the Company has agreed to re-nominate
and recommend the re-election of the Steel director designee assigned to Class
III at the 2008 Annual Meeting of Shareholders.
The Company and Steel have also agreed that one Steel director
designee will be appointed to serve as a member of the Compensation and
Organization Committee and, if established in the future, any executive
committee or special committee when organized, but only if the subject matter
within such committee's authority does not involve any matter which Steel or
any Steel director designee would have, or be reasonably expected to have, an
actual conflict of interest. No appointment to the Compensation and
Organization Committee has been made to date under this provision. The Company
and Steel have also agreed that if Steel is able to obtain Board of Director
representation totaling at least four of eight total directors, that the
Company and Steel will agree to maintain a 50% split between Steel director
designees and Company director designees in the event of a vacancy until the
2008 Annual Meeting of Shareholders. The Company and Steel also agreed that the
number of directors serving on the Board of Directors will not exceed eight
prior to the conclusion of the 2008 Annual Meeting of Shareholders.
This summary is qualified in its entirety by the Settlement Agreement
between the Company and Steel which is attached as Exhibit 10.1 to this Form
8-K and incorporated by reference herein.
ITEM 5.03 AMENDMENTS TO THE ARTICLES OF INCORPORATION OR BYLAWS; CHANGE
IN FISCAL YEAR.
AMENDMENTS TO BYLAWS REGARDING DECLASSIFICATION OF THE BOARD AND DEFINITION OF
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AUTHORITY AND RESPONSIBILITY OF LEAD DIRECTOR
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Pursuant to the Settlement Agreement among the Company and Steel, the
Company amended Section 3:3 of its bylaws to declassify its Board of Directors
on the "phased-in" basis described below. The bylaw amendment allows
directors elected prior to the 2007 Annual Meeting of Shareholders to serve
the remaining duration of their three-year terms. Directors elected at or
after the 2007 Annual Meeting of Shareholders will be elected for a one-year
term of office. The effect of the amendment is that as of the 2009 Annual
Meeting of Shareholders and thereafter, the Board of Directors will be
completely declassified and all directors will be elected annually to a
one-year term. This description is qualified in its entirety by reference to
the text of amended Section 3:3 of the bylaws which is attached as Exhibit 2.1
to this Form 8-K
Also pursuant to the Settlement Agreement among the Company and
Steel, the Company amended its bylaws to add a new Section 3:13 to define the
responsibilities of the lead independent director. This amendment was
effective as of the execution by all the parties of the Settlement Agreement
among the Company and Steel on August 30, 2006. Under the new Section 3:13,
the lead independent director will have the responsibility to:
o call a meeting of the Board of Directors;
o call for and conduct executive sessions of the Board of Directors at
which only outside independent directors and invitees are permitted
to be present;
o preside at all meetings of the Board of Directors at which the
Chairman of the Board is not present;
o serve as a liaison between the Chairman and the independent
directors;
o approve or add to materials sent to the Board of Directors that were
initially prepared by or at the direction of the Chairman;
o approve or add to agenda items for Board of Directors meetings that
were initially prepared by the Chairman;
o approve Board of Directors meeting schedules that were initially
prepared by the Chairman to assure sufficient time for discussion of
all agenda items;
o recommend items for structuring Board of Directors meetings;
o recommend matters for consideration by the Board of Directors;
o serve as independent point of contact with shareholders wishing to
communicate with the Board of Directors;
o collaborate with Chairman with respect to recommending tasks to be
assigned to Board of Directors committees;
o with approval of corporate governance and nominating committee,
oversee the annual evaluations of the Board of Directors and its
committees; and
o engage legal, financial and other advisers to represent the outside
independent Board of Directors members.
This description is qualified in its entirety by reference to the
text of new Section 3:13 of the bylaws which is attached as Exhibit 2.2 to
this Form 8-K.
AMENDMENT TO CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF CLASS B
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SERIES 2 JUNIOR PARTICIPATING PREFERRED STOCK
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Pursuant to authority vested in the Board of Directors of the Company
by Article Three of the Articles of Incorporation of the Company, the Board of
Directors of the Company adopted an Amendment to the Certificate of
Designation, Preferences and Rights of Class B Series 2 Junior Participating
Preferred Stock of the Company, which amends and restates the designation,
amount, powers, preferences and relative, participating, optional and other
special rights of the shares of the Class B Series 2 Preferred Stock, and the
qualifications, limitations or restrictions thereof.
The only change effected by the amendment was to Section 3(A) of the
Certificate of Designation, Preferences and Rights of Class B Series 2 Junior
Participating Preferred Stock. Section 3(A) was amended to read as follows,
"Each share of Class B Series 2 Junior Participating Preferred Stock shall
entitle the holder thereof to one vote on all matters submitted to a vote of
the stockholders of the Company." Prior to the amendment, Section 3(A) read as
follows, "Each share of Class B Series 2 Junior Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Company."
The Amendment to the Certificate of Designation, Preferences and
Rights of Class B Series 2 Junior Participating Preferred Stock of the Company
became effective on September 5, 2006.
This description is qualified in its entirety by reference to the
text of the Amendment to the Certificate of Designation, Preferences and
Rights of the Class B Series 2 Junior Participating Preferred Stock which is
attached as Exhibit 3.1 to this Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
2.1 Amendment to Bylaws amending Section 3:3 in its
entirety.
2.2 Amendment to Bylaws adding new Section 3:13.
3.1 Amendment to Certificate of Designation,
Preferences and Rights of Class B Series 2 Junior
Participating Preferred Stock.
4.1 Form of Amendment No. 1 to Rights Agreement, dated
as of August 29, 2006, between Angelica Corporation
and UMB Bank, N.A.
10.1 Settlement Agreement dated August 30, 2006 by and
between Angelica Corporation, Steel Partners L.L.C.
and Steel Partners II, L.P.
10.2 Settlement Agreement dated August 30, 2006 by and
between Angelica Corporation, Pirate Capital LLC,
Jolly Roger Fund LP and Jolly Roger Offshore Fund
LTD.
99.1 Press Release of Angelica Corporation dated August
31, 2006 Announcing Agreement with Largest
Shareholder Steel Partners II, L.P.
99.2 Press Release of Angelica Corporation dated August
31, 2006 Announcing Agreement with Pirate Capital
LLC.
99.3 Press Release of Angelica Corporation dated August
31, 2006 Announcing Stephen O'Hara to Assume
President Duties Following David Van Vliet
Resignation.
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 hereunto duly authorized.
ANGELICA CORPORATION
Dated: September 5, 2006 /s/ Steven L. Frey
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Steven L. Frey
Vice President, General Counsel and
Secretary
EXHIBIT INDEX
Exhibit No. Description of Exhibit
2.1 Amendment to Bylaws amending Section 3:3 in its
entirety.
2.2 Amendment to Bylaws adding new Section 3:13.
3.1 Amendment to Certificate of Designation,
Preferences and Rights of Class B Series 2 Junior
Participating Preferred Stock.
4.1 Form of Amendment No. 1 to Rights Agreement, dated
as of August 29, 2006, between Angelica Corporation
and UMB Bank, N.A.
10.1 Settlement Agreement dated August 30, 2006 by and
between Angelica Corporation, Steel Partners L.L.C.
and Steel Partners II, L.P.
10.2 Settlement Agreement dated August 30, 2006 by and
between Angelica Corporation, Pirate Capital LLC,
Jolly Roger Fund LP and Jolly Roger Offshore Fund
LTD.
99.1 Press Release of Angelica Corporation dated August
31, 2006 Announcing Agreement with Largest
Shareholder Steel Partners II, L.P.
99.2 Press Release of Angelica Corporation dated August
31, 2006 Announcing Agreement with Pirate Capital
LLC.
99.3 Press Release of Angelica Corporation dated August
31, 2006 Announcing Stephen O'Hara to Assume
President Duties Following David Van Vliet
Resignation.