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The following is an excerpt from a DEF 14A SEC Filing, filed by ANGELICA CORP /NEW/ on 4/16/2001.
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ANGELICA CORP /NEW/ - DEF 14A - 20010416 - EXECUTIVE_COMPENSATION

OTHER TYPES OF COMPENSATION RECEIVED BY EXECUTIVES

The Committee believes that executives who own the Company's Common Stock will be more motivated to work towards increasing shareholder value. The Stock Bonus and Incentive Plan encourages employees to invest in the Company's Common Stock by allowing the executive to elect to receive up to one-half of his or her annual incentive award in shares of the Company's Common Stock and by providing a Company match of 50% of the amount elected, also payable in the Company's Common Stock, as incentive to invest in the Common Stock. The Plan requires that the employee's investment in Common Stock be retained for three years after the election and that the Company Match be subject to forfeiture for five years in the event that an executive's employment with the Company terminates, encouraging employees to continue to work for the long-term increase in the price of the Common Stock.

To further encourage employees to work toward the growth of shareholder value, the Committee periodically awards stock options to various employees under the Angelica Corporation 1994 and 1999 Performance Plans. This gives employees the opportunity to buy Common Stock at option prices which, at

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the time of exercise, may be below the then market value. The option price is the fair market value on the date of grant. Options become exercisable ratably over three to five years, provided the executive remains employed by the Company. The grant of stock options is strictly discretionary; however, the employee's performance and grade level, as well as total grants outstanding, are considered in determining the amount of option grants. The amount an employee may realize from the option grants depends on the market price of the Company's Common Stock at the time that the underlying stock is sold by the executive. After an option becomes exercisable, the decision of when to exercise the option and when to sell the underlying stock, thus realizing the value, is determined by each individual executive. For fiscal 2001, the following Named Executive Officers received the following option grants: Mr. Hubble, 30,000 shares; Mr. Armstrong, 15,000 shares; Mr. Molloy, 15,000 shares; Mr. Raab, 15,000 shares; and Mr. Ryan, 15,000 shares.

CEO COMPENSATION

The Committee's general approach in establishing the Chief Executive Officer's annual cash compensation is to seek to be competitive with other companies of comparable size and business scope, while at the same time having a large percentage of his total cash compensation based upon performance criteria. While this may result in a fluctuation in the actual level of compensation from year to year, the Committee believes that its objective appropriately motivates the Chief Executive Officer toward clearly defined goals, while maintaining some certainty in the level of compensation through the non-performance-based salary portion of total compensation. The grant of 30,000 stock options to Mr. Hubble in fiscal 2001, as well as his participation in the Stock Bonus and Incentive Plan, is in accordance with the Committee's philosophy that the Chief Executive Officer be encouraged to maintain a significant stock ownership position in order to align his interest with those of the Company's shareholders.

During fiscal 2001, the Committee increased Mr. Hubble's base salary from $394,000 to $434,000 per annum. Mr. Hubble had not had an increase since April 1, 1999, and the approximate ten percent increase was arrived at by rewarding him with a five percent increase for each of the past two years. The increase is generally in line with the increases awarded to other top managers of the Company. Mr. Hubble's incentive compensation for fiscal 2001 was set at 0 to 80% of his base salary. He received for that year incentive compensation equal to $70,517 or 17.6% of his base salary.

IRS LIMITS ON DEDUCTIBILITY OF COMPENSATION

Although no executive officer currently receives in excess of $1,000,000 of compensation annually, the Committee's policy is to maximize the tax deductibility of executive compensation without compromising the essential framework of the existing total compensation program. The Committee may elect to forego deductibility for federal income tax purposes if such action is, in the opinion of the Committee, necessary or appropriate to further goals of the Company's executive compensation program, or otherwise is in the Company's best interests.

Although the foregoing describes the Committee's current compensation policies applicable to the Company's executive officers, the Committee reserves the right to change these policies at such time in the future and in such manner as the Committee deems necessary or appropriate.

Submitted by the Compensation and Organization Committee of the Company's Board of Directors:

Earle H. Harbison, Jr., Chairman Stephen M. O'Hara Charles W. Mueller H. Edwin Trusheim

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SUMMARY COMPENSATION TABLE

The table below summarizes the amounts paid to the Chief Executive Officer and each of the four next highest paid executive officers at the end of fiscal 2001.

                                                                                              LONG TERM
                                                                                             COMPENSATION
                                                                                       ------------------------
                                                      ANNUAL COMPENSATION                       AWARDS
                                           -----------------------------------------   ------------------------
                                                                   BONUS               RESTRICTED                    ALL OTHER
                                  FISCAL               -----------------------------     STOCK                        COMPEN-
                                   YEAR                           NONCASH    TOTAL      AWARD(S)                      SATION
NAME AND PRINCIPAL POSITION       ENDING   SALARY(1)     CASH     (2)(3)     BONUS     ($)(2)(3)    OPTIONS (#)       ($)(4)
---------------------------       ------   ---------   --------   -------   --------   ----------   -----------      ---------
Don W. Hubble                     1/27/01  $400,667    $ 52,888   $17,629   $ 70,517    $ 8,814       30,000         $  3,150
Chairman, President and           1/29/00   390,833          --        --         --         --       25,000            3,000
Chief Executive Officer           1/30/99   375,000     130,000    70,000    200,000     35,000           --               --

Theodore M. Armstrong             1/27/01   203,333      20,130     6,710     26,840      3,355       15,000            3,040
Senior Vice President--           1/29/00   194,167          --        --         --         --       10,000            3,000
Finance & Administration          1/30/99   174,833      35,000    35,000     70,000     17,500        7,000              600
and Chief Financial Officer

Charles D. Molloy, Jr.            1/27/01   189,000      11,340     2,835     14,175      1,417       15,000            3,071
Vice President. Also              1/29/00   183,750          --        --         --         --       10,000            3,000
President, Manufacturing          1/30/99   164,319      37,500    12,500     50,000      6,250       12,000              600
and Marketing segment

Denis R. Raab(5)                  1/27/01   178,750      35,000        --     35,000         --       15,000            2,998
Vice President. Also              1/29/00    77,628      25,000        --     25,000         --       12,000               --
President, Life Retail            1/30/99        --          --        --         --         --           --               --
Stores segment

Edward P. Ryan (6)                1/27/01   213,031      50,110        --     50,110         --       15,000               --
Vice President. Also,             1/29/00   199,938      40,000        --     40,000         --        4,000               --
Interim President, Textile        1/30/99    41,346      20,000        --     20,000         --       10,000               --
Services segment

------

(1)    Includes participant deferrals under the Retirement Savings Plan for all Named Executive Officers.

(2)    Participants in the Stock Bonus and Incentive Plan (the "Plan") may elect to receive up to 50% of their
       incentive compensation in shares of the Company's Common Stock ("elected shares") in lieu of cash. Elected
       shares cannot be sold for three years. Additionally, participants receive restricted shares in the Company's
       Common Stock ("matching shares") with a fair market value equal to one-half of that portion of the incentive
       compensation which participants elected to take in Common Stock. Restricted shares of Common Stock (both
       "elected shares" and "matching shares") were issued to participants based upon the fair market value (the
       average of the high/low transaction prices) of the Common Stock on the date of issuance. Elected shares are
       reported under the "noncash" column, while matching shares are reported under the "Restricted Stock Awards"
       column. The following Named Executive Officers received elected shares for fiscal 2001, which become
       transferrable in three years as follows: Mr. Hubble, 1,855 shares; Mr. Armstrong, 706 shares; and Mr. Molloy,
       298 shares. Messrs. Raab and Ryan did not participate. Participants receive dividends on all restricted
       shares.

(3)    At the end of the last fiscal year, the following Named Executive Officers held the following number of
       shares of restricted stock issued under the Stock Bonus and Incentive Plan (elected and matching shares): Mr.
       Hubble, 7,285 shares with an aggregate value of $68,297, Mr. Armstrong, 5,090 shares with an aggregate value
       of $47,719, and Mr. Molloy, 1,711 shares with an aggregate value of $16,041. Matching shares become
       transferable in five years and are subject to forfeiture should the participant leave the Company prior to
       the expiration of five years, except in the case of death, disability, retirement after the age of 62 or,
       alternatively, attainment of age 55 and completion of at least ten years


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       of service with the Company, or certain terminations after a Change of Control of the Company. Participants
       receive any dividends paid on matching shares.

(4)    Includes Company contributions to the Retirement Savings Plan on behalf of each of the Named Executive
       Officers to match calendar 2000 participant deferrals (included under Salary) made by each to such plan.

(5)    Mr. Raab assumed the position of Vice President of the Company and President of the Life Retail Stores
       segment on August 31, 1999. Prior thereto, Mr. Raab was not employed by the Company.

(6)    Mr. Ryan assumed the position of Vice President of the Company on May 23, 2000 and Executive Vice President
       of Sales and Marketing and Interim President of the Textile Services segment on April 23, 2000. He served as
       Vice President of Marketing of the Textile Services segment from October, 1998 to April, 2000. Prior thereto,
       Mr. Ryan was not employed by the Company. Mr. Ryan completed his service as Interim President of the Textile
       Services segment on February 1, 2001.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS

EMPLOYMENT CONTRACTS

All of the current Named Executive Officers have employment agreements with the Company (referred to herein individually as an "Employment Agreement" and collectively as the "Employment Agreements") that define the Named Executive Officer's employment relationship with the Company. The Employment Agreements protect the Named Executive Officers from certain terminations of employment with the Company, both prior to and after a "Triggering Transaction." The definition of a "Triggering Transaction" (as defined in each of the Employment Agreements) varies depending on the executive and his responsibilities. In the case of an executive who has responsibilities relating to all of the Company's business lines, it refers to a sale or change in control of at least two of the Company's three operating lines of business. In the case of an executive who has responsibility for one of the Company's operating lines of business, it refers to a sale or change in control of that operating line of business. In all cases it includes the sale or change in control of the entire Company. The Employment Agreements for all but Mr. Ryan and Mr. Hubble provide that if, during the term of the Employment Agreement, a Triggering Transaction occurs and, within two years following the Triggering Transaction, the Company terminates the Named Executive Officer's employment without "cause," or the Named Executive Officer terminates his employment for "good reason," the Company will be required to pay to the Named Executive Officer 2.99 times the Named Executive Officer's then-current annual base salary. Mr. Ryan's Employment Agreement provides that if, during the term of the Employment Agreement, a Triggering Transaction occurs and, within one year following the Triggering Transaction, the Company terminates his employment without "cause", or he terminates his employment for "good reason," the Company will be required to pay him an amount equal to his then-current annual base salary. Mr. Hubble's Employment Agreement provides that if, during the term of the Employment Agreement, a Triggering Transaction occurs and, within three years following the Triggering Transaction, the Company terminates his employment without "cause," or he terminates his employment for "good reason", the Company will be required to pay him 2.99 times his then-current annual base salary and current incentive bonus. In addition, all stock options under the Company's stock option plans (and, for Mr. Hubble only, all unvested and restricted stock under the Stock Bonus and Incentive Plan) will vest and/or become unrestricted, as the case may be. In addition, Messrs. Armstrong and Hubble will be entitled to enhanced supplemental retirement and medical and health benefits without cost to them for a period of ten years after termination of employment. Mr. Armstrong will also be entitled to enhanced supplemental deferred compensation benefits. These provisions also apply if, within six months following a termination by the Company without "cause" or by the Named Executive Officer with "good reason," a Triggering Transaction occurs or a

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definitive agreement is executed that eventually results in a Triggering Transaction. The terms "good reason" and "cause" are defined in the Employment Agreements.

The Employment Agreements also set out the employment arrangement if an executive's employment is terminated by the Company without cause or by the executive for good reason prior to the occurrence of a Triggering Transaction. The Company will be required to continue the then-current base salary for a period of two years in the case of Mr. Hubble, for a period of one year for the executive officers other than Mr. Ryan, and for a period not to exceed one year nor less than six months in the case of Mr. Ryan. In the case of Mr. Hubble, medical and health benefits shall be continued for a period of one year.

If it is determined that any portion of the payments made to Mr. Hubble pursuant to his Employment Agreement would be subject to an excise tax pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended, the Company will pay to Mr. Hubble an additional cash payment sufficient to place him in the same after-tax position as he would have been in had no excise tax been imposed.

Under the terms of a special retirement agreement with Mr. Hubble (the "Hubble Retirement Agreement"), the Company has agreed to pay to Mr. Hubble an annual retirement benefit starting at age 65 equal to $15,000 multiplied by the number of full years Mr. Hubble is employed by the Company. All benefits under the Hubble Retirement Agreement will be reduced by the amount of retirement benefits payable by the Company to Mr. Hubble under certain of the Company's other retirement benefit plans.

MANAGEMENT RETENTION AND INCENTIVE PLAN

Mr. Armstrong and Mr. Molloy each has an agreement with the Company under the Management Retention and Incentive Plan that grants certain severance benefits in the event of certain terminations of employment after a "Change in Control" involving the Company (as defined in the plan). If the executive officer's employment with the Company is terminated by the Company without "cause" or by the executive officer for "good reason," (each term as defined in the plan), within two years after a Change in Control, the Company will make a payment ranging from 2.00 to 2.99 times the average Annual Compensation of the executive officer for the five full calendar years immediately preceding a Change in Control of the Company. "Annual Compensation" is generally defined as all wages, salary, bonuses, incentive compensation and all other amounts paid by the Company to the executive officer in consideration for services rendered, including all deferred compensation. In addition, the plan provides the terminated executive with outplacement counseling and certain medical benefits and health insurance. The executive officer will also be relieved of all non-compete obligations with respect to the Company.

The differing scope of the term "Change in Control" in the Management Retention and Incentive Plan and the term "Triggering Transaction" in the Employment Agreements may result in an entitlement to payment under one arrangement but not the other, depending upon the circumstances. As a result, the severance benefits payable under the Employment Agreements are computed differently than under the Management Retention and Incentive Plan and may result in significantly different entitlements to the eligible executive officer. In the event a severance benefit is payable under an Employment Agreement as a result of a Triggering Transaction and is payable under the Management Retention and Incentive Plan as a result of a Change in Control, the executive officer will be entitled to the larger of the two amounts.

TRUST AGREEMENTS

Two separate trusts have been established with UMB Bank to fund certain benefits payable to key management personnel pursuant to certain employee benefit plans in the event the executive officer's employment is terminated following a "Change in Control" (as defined in the respective employee benefit plans). The trusts relate to the benefits payable under the Deferred Compensation Option Plan for Selected Management Employees, the Supplemental Plan, and the Management Retention and Incentive

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Plan. In the event of a Change in Control or a potential Change in Control of the Company that is not approved by the Board of Directors of the Company, the Company will be required to deposit in each trust an amount equal to the difference between the maximum amount potentially payable under the plan or plans to all participants and the current value of the trust assets. Each trust can be revoked by the Company at any time prior to a Change in Control or potential Change in Control of the Company. The trust will terminate automatically on the third anniversary of the occurrence of the Change in Control. If the trust is revoked or terminated, all remaining trust assets will be returned to the Company. If the Company makes a deposit to a trust in connection with a potential Change in Control and an actual Change in Control does not occur within 90 days thereafter, the Board of Directors may adopt a resolution that the Change of Control is not imminent and the deposit will be returned by the trust to the Company. In the event the Company becomes bankrupt or insolvent, the assets of the trust will be subject to the claims of the general creditors of the Company.

RETIREMENT PLANS

The Company has maintained a defined benefit Pension Plan since April 1, 1980. An employee earns benefits in any year equal to 0.25% of total compensation plus an additional 0.25% of that part of compensation which is in excess of one-half of the Social Security Taxable-Wage Base, plus, for each year of employment in excess of 15 years, an additional 0.05% of total compensation. Reduced benefits are payable at early retirement. Estimated annual benefits under the Pension Plan payable upon normal retirement to the following Named Executive Officers are as follows: Mr. Hubble, $4,146; Mr. Armstrong, $14,875; Mr. Molloy, $18,120; Mr. Raab, $14,368; and Mr. Ryan, $7,362. These figures assume that participants will remain with the Company until their normal retirement dates and will receive increases to their current compensation consistent with historical increases in compensation.

The Company also maintains the Supplemental Plan, a supplemental retirement benefit plan for a limited number of highly compensated officers and management personnel selected by the Compensation and Organization Committee. The "formula amount" of supplemental retirement benefit payable under the Supplemental Plan is determined by the Committee when the participant is invited to join the Plan and is subject to increase at the Committee's discretion. Additionally, the Committee may, at its discretion, reduce the formula amount or "freeze" the then vested benefit of certain participants. A full benefit is the participant's final average compensation multiplied by the formula amount (between 30% and 50%). A participant who has less than 30 years of service at retirement will receive a reduced amount of the otherwise fully vested formula amount, based on actual years of service. For the purposes of the Supplemental Plan, final average compensation means the average compensation paid during the three most highly compensated years of the participant's last five years of employment. Benefits are generally payable over 120 months beginning at age 65, but may extend for a period of up to 15 years. Any benefit payable under the Supplemental Plan will be reduced by benefits paid under the Pension Plan.

Estimated annual benefits under the Supplemental Plan payable upon normal retirement over a ten-year period to the following Named Executive Officers are as follows: Mr. Hubble, $44,981; Mr. Armstrong, $42,848; Mr. Molloy, $86,484; and Mr. Raab, $48,003. Mr. Ryan does not participate in the plan. These figures reflect a reduction for the benefit payable under the Pension Plan (or predecessor plan), and assume that participants will remain with the Company until their normal retirement dates and will receive increases to their current compensation consistent with historical increases in compensation.

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STOCK OPTIONS

The 1994 and 1999 Performance Plans allow grants of stock options and other rights relating to Common Stock. In general, whether exercising stock options is profitable depends on the relationship between the Common Stock's market price and the option's exercise price, as well as on the option holder's investment decisions.

The following table sets forth information concerning stock option grants made in fiscal year 2001 to the Named Executive Officers.

                                    OPTION GRANTS IN LAST FISCAL YEAR

                                                    INDIVIDUAL GRANTS
                                      ---------------------------------------------
                                                     % OF
                                      NUMBER OF     TOTAL
                                      SECURITIES   OPTIONS
                                      UNDERLYING  GRANTED TO  EXERCISE
                                       OPTIONS    EMPLOYEES   OR BASE
                                       GRANTED    IN FISCAL    PRICE     EXPIRATION       GRANT DATE
NAME                                    (#)(1)     YEAR(2)     ($/SH)       DATE     PRESENT VALUE ($)(3)
----                                  ----------  ----------  --------   ----------  --------------------
Don W. Hubble.......................    30,000      9.38       $7.25     5/23/2010         $62,934
Theodore M. Armstrong...............    15,000      4.69        7.25     5/23/2010          31,467
Charles D. Molloy, Jr...............    15,000      4.69        7.25     5/23/2010          31,467
Denis R. Raab.......................    15,000      4.69        7.25     5/23/2010          31,467
Edward P. Ryan......................    15,000      4.69        7.25     5/23/2010          31,467

------

(1)    All options become exercisable ratably over four years and are subject to continued employment. Options were
       granted under the Company's 1994 Performance Plan and the 1999 Performance Plan. The 1999 Performance Plan
       provides that in the event of a "change of control" all options become immediately exercisable and shall
       remain exercisable until the option would otherwise expire by reason of lapse of time. The Named Executive
       Officers received only one grant of options during the last fiscal year.

(2)    Based on 320,000 options granted to employees during the fiscal year.

(3)    The fair market value of each option granted is estimated on the date of grant using the Black-Scholes option
       pricing model. The actual value, if any, an executive officer may realize will depend on the excess of the
       stock price over the exercise price on the date the underlying stock is sold, so that there is no assurance
       the value realized by an executive officer will be at or near the value estimated by the Black-Scholes model.
       The Black-Scholes evaluation employed the following factors: risk-free rate of return of 6.75% based upon the
       ten-year Treasury Bill rate as of grant date, dividend yield of 4.4% based upon average annual dividend yield
       for the prior ten years, exercise term of ten years, stock price volatility of 31.43% based upon average
       stock price volatility for the prior seven years, and no adjustments for transferability of risk or
       forfeiture of the options.

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The following table sets forth information concerning the exercise of stock options during fiscal 2001 and the fiscal year-end value of unexercised stock options for the Named Executive Officers.

                           AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                                 AND FISCAL YEAR-END OPTION VALUES

                                                                      NUMBER OF         VALUE OF
                                                                      SECURITIES      UNEXERCISED
                                                                      UNDERLYING      IN-THE-MONEY
                                              SHARES                  OPTIONS AT       OPTIONS AT
                                            ACQUIRED ON               FY-END (#)       FY-END ($)
                                             EXERCISE     VALUE      EXERCISABLE/     EXERCISABLE/
NAME                                            (#)      REALIZED   UNEXERCISABLE   UNEXERCISABLE(1)
----                                        -----------  --------   --------------  ----------------
Don W. Hubble.............................      --         $--      106,250/48,750     $0/63,750
Theodore M. Armstrong.....................      --          --       55,800/27,200      0/31,875
Charles D. Molloy, Jr.....................      --          --       14,500/32,500      0/31,875
Denis R. Raab.............................      --          --        4,000/23,000      0/31,875
Edward P. Ryan............................      --          --        6,000/23,000      0/31,875
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(1)    Based upon the average of the high/low transaction prices as reported on New York Stock Exchange Composite
       Tape on January 26, 2001.

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