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Exhibit 10.34
 

AMENDMENT OF
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT

Richard M. Oliva

This Amendment of the Angelica Corporation Employment Agreement with Richard M.
Oliva (the “Agreement”) has been entered into this 17th day of December, 2007,
by and between Angelica Corporation, a Missouri corporation (the “Company”), and
Richard M. Oliva, an individual (the “Employee”).

WHEREAS, the Company and the Employee previously entered into that certain
agreement dated as of December 1, 2005, regarding the employment relationship
between the Company and the Employee (the “Original Agreement”); and

WHEREAS, the Company and the Employee desire to amend the Original Agreement as
of the date hereof to conform to the provisions of the regulations under Section
409A of the Internal Revenue Code;

NOW THEREFORE, in consideration of the mutual promises herein contained, the
Company and the Employee hereby amend the Original Agreement as follows:

1.           Section 1.1(i) is amended to read in its entirety as follows:

1.1(i) “Date of Termination” has the meaning set forth in Section 3.8 of this
Agreement.  In all cases, a “Date of Termination” shall only occur upon
separation from service from the Company and all of its affiliates, as defined
in Treasury regulations under Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) (generally, separation from the 50% controlled group
that includes the Company).

2.           Section 2.4(f) is amended to add the following sentence to the end
of said Section:

Expense reimbursements described in this Section 2.4(f) will be made no later
than the end of the calendar year following the calendar year in which the
expenses are incurred.

3.           Section 3.4 is amended to read in its entirety as follows:

3.4 Good Reason.  The Employee may terminate his employment with the Company
during the Employment Period for “Good Reason,” which shall mean the occurrence
of one or more of the following without the consent of the Employee, provided
such termination occurs after the required notice and cure period provided
below:

 
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3.4(a) a material reduction in the Employee’s Annual Base Salary;

3.4(b) a material reduction in the Employee’s authority, duties or
responsibilities;

3.4(c) a material reduction in the budget over which the Employee retains
authority;

3.4(d) a material change in the geographic location at which the Employee must
perform the services under this Agreement;

3.4(e) any other action or inaction that constitutes a material breach by the
Company of this Agreement.

Any termination of the Employee’s employment based upon a good faith
determination of “Good Reason” made by the Employee shall be subject to delivery
of a notice of the Good Reason by the Employee to the Company in the manner
prescribed in Section 3.7 within ninety (90) days of the first occurrence of an
event that would constitute Good Reason and subject further to the ability of
the Company to remedy the condition within thirty (30) days of receipt of such
notice.

4.           Sections 4.1(a) is amended to read in its entirety as follows:

4.1(a) Accrued Obligations. Within thirty (30) days after the Date of
Termination, the Company shall pay to the Employee the sum of (i) the Employee’s
Annual Base Salary through the Date of Termination, and (ii) any accrued
vacation pay; in each case to the extent not previously paid (the “Accrued
Obligations”).  In addition, Employee shall be entitled to the benefits, if any,
under any benefit plan, program or arrangement in which the Employee is a
participant, in the time and manner provided under the applicable plan, program
or arrangement.

5.           Section 4.1(b) is amended to read in its entirety as follows:

4.1(b) Annual Base Salary Continuation.  For a period of twelve (12) months
beginning in the month immediately subsequent to the month in which the Date of
Termination occurs, the Company shall pay to Employee, on a bi-weekly basis
consistent with its then-existing payroll practices, an amount equal to
one/twenty-sixth (1/26th) of the Employee’s then-current Annual Base Salary;
provided, however, that during months seven (7) through twelve (12) of such
period, the amount of such payments shall be reduced by the amounts, if any,
earned by the Employee during such months as a result of self-employment and/or
employment with another employer.  As a condition of payment during months seven
(7) through twelve (12), the Employee agrees to provide the Company

 
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with verification, reasonably acceptable to Company, substantiating the amounts
of any such earnings or the Employee’s lack of other employment as the case may
be.

6.           Section 4.2 is amended to read in its entirety as follows:

4.2 Benefits Upon Termination without Cause or for Good Reason in Connection
with a Change in Control.  If (a) a Change in Control (as defined in Section
1.1(f)) occurs during the Employment Period and within two (2) years after the
Change in Control Date (as defined in Section 1.1(g)) (i) the Company shall
terminate the Employee’s employment without Cause, or (ii) the Employee shall
terminate employment with the Company 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 change of control that qualified
under Code Section 409A (a “409A Change in Control”) or (ii) the execution of a
definitive agreement or contract that eventually results in a 409A Change in
Control, then the Employee shall become entitled upon the date of the 409A
Change in Control to receive the payment of the benefits as provided below as of
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 date of the
409A Change in Control, 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 as set forth in this Section 4.2 is hereinafter
referred to as the “Entitlement Date”).

For purposes of this Agreement, a “409A Change in Control” shall mean:  (i) the
acquisition by one person, or more than one person acting as a group, of
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company; (ii) the acquisition by one person, or
more than one person acting as a group, of ownership of stock of the Company,
that together with stock of the Company acquired during the twelve-month period
ending on the date of the most recent acquisition by such person or group,
constitutes 30% or more of the total voting power of the stock of the Company;
(iii) a majority of the members of the Company’s board of directors is replaced
during any twelve-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Company’s board of directors before
the date of the appointment or election; (iv) one person, or more than one
person acting as a group, acquires (or has acquired during the twelve-month
period ending on the date of the most recent acquisition by such person or
group) assets from the Company that have a total gross fair market value
(determined without regard to any liabilities associated with such assets) equal
to or more than 40% of the total gross fair market value of all of the assets of
the Company immediately before such acquisition or acquisitions.  Persons will
not be considered to be acting as a group solely because they purchase or own
stock of the same corporation at the same time, or as a result of the same
public offering.

 
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However, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the Company.  This
definition of 409A Change in Control shall be interpreted in accordance with,
and in a manner that will bring the definition into compliance with, the
regulations under Code Section 409A.
 

 
7.           Section 4.7 is amended to read in its entirety as follows:

4.7 Full Settlement. The parties agree that the Company’s obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder are intended to be in full settlement of all claims that the Employee
may have against the Company with respect to the termination of the Employee’s
employment with the Company and the Employee shall be required to execute and
deliver an agreement to this effect prior to receipt of any payments under this
Agreement.  If such agreement is not signed and delivered to the Company within
sixty (60) days of Employee’s Date of Termination, the Company’s obligation to
make the payments provided for in this Agreement shall terminate.  The payments
to be made by the Company or any other obligation that the Company is required
to perform pursuant to this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Employee or others. In no event shall the Employee
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Employee under any of the provisions of
this Agreement and such amounts shall not be reduced whether or not the Employee
obtains other employment.  To the extent the Employee prevails in any contest
with respect to the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Employee regarding the amount of any payment
pursuant to this Agreement), the Company agrees to pay promptly, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any such contest, plus in each case interest on
any delayed payment at the applicable Federal rate provided for in Code Section
7872(f)(2)(A).  Any such payment shall be made not later than the end of the
calendar year following the calendar year in which the Employee incurred such
expense.

8.           Section 4.8 is amended to read in its entirety as follows:

4.8 Resolution of Disputes.  If there shall be any dispute between the Company
and the Employee (i) as to whether any termination of the Employee’s employment
was for Cause, or (ii) as to whether any termination of the Employee’s
employment for Good Reason was made in good faith, then, unless and until there
is a final, non-appealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause or that the determination by the
Employee of the existence of Good Reason was not made in

 
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good faith, the Company shall pay all amounts, and provide all benefits, to the
Employee and/or the Employee’s family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section 4.1
or 4.2 as though such termination was without Cause or for Good Reason, as the
case may be; provided, however, that the Company shall not be required to pay
any disputed amounts pursuant to this Section 4.8 except upon receipt, within
sixty (60) days of the date such dispute arises, of an undertaking by or on
behalf of the Employee to repay all such amounts to which the Employee is
ultimately adjudged by such court not to be entitled.
 

9.           A new Section 4.9 is added to the Agreement as follows:

4.9 Specified Employee Six Month Deferral.  Notwithstanding anything to the
contrary in this Section 4, if the Employee is a “Specified Employee” on the
Date of Termination, the Employee may not receive a payment of “nonqualified
deferred compensation” for which the “payment event” is “separation from
service,” as defined in Code Section 409A and the regulations thereunder, until
at least six (6) months after a Date of Termination.  Any payment of
nonqualified deferred compensation otherwise due in such six (6) month period
shall be suspended and become payable at the end of such six (6) month period.

A “Specified Employee” means a specified employee as defined in Treas. Reg.
§1.409A-1(i) (generally, officers earning more than $140,000 per year, as
indexed for inflation, who are among the fifty (50) highest paid employees).

 
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IN WITNESS WHEREOF, the Employee and, the Company, 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.

“Employee”

/s/ Richard M. Oliva                                                    
RICHARD M. OLIVA

“Company”

ANGELICA CORPORATION

By /s/ Stephen M. O’Hara                                           
Name: Stephen M. O’Hara                                          
Title:   CEO                                                                  

 
 
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