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Exhibit 10.32

 
ANGELICA CORPORATION
EMPLOYMENT AGREEMENT

This agreement (‘‘Agreement’’) has been entered into this 27th day of November,
2006, by and between Angelica Corporation, a Missouri corporation (the
“Company”), and John Olbrych, an individual (the “Executive”).

WHEREAS, the Board of Directors of the Company has determined that it is in the
best interests of the Company and its stockholders to employ executive as Chief
Administrative Officer as of the Employment Start Date (as defined below) and,
additionally, as Senior Vice President as of the Effective Date (as defined
below); and

WHEREAS, this Agreement contains the terms and conditions that have been
negotiated by the Company and the Executive as an inducement to the Executive to
accept employment by the Company;

NOW THEREFORE, in consideration of the mutual promises herein contained, the
parties hereby agree as follows:
 
Section 1: Definitions and Construction.

1.1 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.

1.1(a) “Accrued Obligations” has the meaning set forth in Section 4.1(a) of this
Agreement.

1.1(b) “Annual Base Salary” has the meaning set forth in Section 2.3(a) of this
Agreement.

1.1(c) “Board” means the Board of Directors of the Company.

1.1(d) “Cause” has the meaning set forth in Section 3.3 of this Agreement.

1.1(e) “Company” has the meaning set forth in the first paragraph of this
Agreement and, with regard to successors, in Section 6.2 of this Agreement.

1.1(f) “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.1(g) “Date of Termination” has the meaning set forth in Section 3.6 of this
Agreement.
 
1.1(h) “Disability” has the meaning set forth in Section 3.2 of this Agreement.
 
1.1(i) “Disability Effective Date” has the meaning set forth in Section 3.2 of
this Agreement.

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1.1(j) “Effective Date” means December 8, 2006.

1.1(k) “Employment Period” means the period beginning on the Employment Start
Date and ending on the Date of Termination.

1.1(l) “Employment Start Date” means November 27, 2006.
 
1.1(m) “Grant Date” has the meaning set forth in section 2.3(d) of this
Agreement.

1.1(n) “Long-Term Bonus” has the meaning set forth in Section 2.3(c) of this
Agreement.
 
1.1(o) “Notice of Termination” has the meaning set forth in Section 3.5 of this
Agreement.
 
1.1(p) “Other Benefits” has the meaning set forth in Section 4.1(d) of this
Agreement.
 
1.2 Gender and Number. When appropriate, pronouns in this Agreement used in the
masculine gender include the feminine gender, words in the singular include the
plural, and words in the plural include the singular.

1.3 Headings. All headings in this Agreement are included solely for ease of
reference and do not bear on the interpretation of the text. Accordingly, as
used in this Agreement, the terms “Article” and “Section” mean the text that
accompanies the specified Article or Section of the Agreement.

1.4 Applicable Law; Venue. This Agreement is executed, entered into, and
accepted in the State of Missouri, and shall be governed by and construed in
accordance with the laws of the State of Missouri, without reference to its
conflict of law principles. In any lawsuit to enforce or assert rights for a
breach of this Agreement, venue shall be proper in the St. Louis County Circuit
Court, and the federal district court in St. Louis, Missouri (if federal
jurisdiction exists), and neither party may claim that such forum is
inconvenient or not the most convenient forum, or that it otherwise is not a
proper forum to decide the claims asserted.

Section 2: Terms and Conditions of Employment.

2.1 Period of Employment. The Executive shall remain in the employ of the
Company throughout the Employment Period in accordance with the terms and
provisions of this Agreement. Either party to this Agreement may terminate the
Employment Period (and the Executive’s employment with the Company) at any time
by giving the other party a Notice of Termination, subject only to the
obligation of the Company to pay the benefits to the Executive as and under the
conditions specified in Section 4 of this Agreement. The term of this Agreement
shall begin as of the Effective Date and shall end on the Date of Termination
and shall accordingly be for no definite term or duration.

 
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2.2 Positions and Duties.
 
2.2(a) From and after the Employment Start Date, the Executive shall serve as
Chief Administrative Officer of the Company, and additionally, from and after
the Effective Date, the Executive shall serve as a Senior Vice President of the
Company. Throughout the Employment Period, the Executive shall perform his
duties subject to the reasonable directions of the Chief Executive Officer of
the Company and the Board, and in such capacities shall perform such executive
and administrative duties as may be assigned to Executive from time to time by
the Chief Executive Officer or the Board. The Executive shall have such
authority and shall perform such duties as are specified in or contemplated by
the Bylaws of the Company for the offices to which he has been appointed and
shall so serve subject to the control exercised by the Chief Executive Officer
of the Company and the Board from time to time. The Executive will comply with
all policies of the Company in effect from time to time.
 
2.2(b) Throughout the Employment Period (but excluding any periods of vacation
and sick leave to which the Executive is entitled), the Executive shall devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and shall use his reasonable best efforts to perform
faithfully and efficiently such responsibilities as are assigned to him under or
in accordance with this Agreement; provided that, it shall not be a violation of
this Section 2.2(b) for the Executive to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures or fulfill speaking
engagements, or (iii) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this Agreement
or violate the Company's conflict of interest policy as is in effect at such
times.
 
2.3 Compensation.
 
2.3(a) Annual Base Salary. The Executive will be compensated on a salaried basis
at an annual rate of pay (“Annual Base Salary”) of Two Hundred Fifty Thousand
Dollars ($250,000.00), which shall be paid in equal or substantially equal
monthly, semi-monthly or bi-weekly instalments in accordance with the Company’s
payroll practices in effect from time to time for executives generally. During
the Employment Period, the Annual Base Salary shall be reviewed by the Board
and/or the Compensation and Organization Committee at least annually following
the conclusion of the current fiscal year (with the first such review taking
place not later than at the conclusion of the Company’s fiscal year 2007), and
may be increased at the discretion of the Board or the Compensation and
Organization Committee of the Board. If the Annual Base Salary is increased,
then the increased rate of compensation shall constitute the Annual Base Salary.
The Annual Base Salary may be reduced with the consent of the Executive.
 
2.3(b) Annual Short Term Incentive Bonus. Beginning with the 2007 fiscal year of
the Company, during the Employment Period, the Executive will be eligible to
participate in the Company’s short term incentive compensation program and be
eligible to earn under and upon the terms of that plan an incentive award of up
to 100% of Annual Base Salary based on performance criteria established by the
Board or its Compensation and Organization Committee, with a target bonus equal
to at least 50% of Annual Base Salary.
 
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2.3(c) Long-Term Incentive Plan Awards. Beginning with the 2007 fiscal year of
the Company, during the Employment Period Executive will be eligible to
participate in the Company’s Long Term Incentive Program (“LTIP”) at fifty
percent (50%) of Annual Base Salary in accordance with the terms of the LTIP as
in effect from time to time (the “Long Term Bonus”) and be eligible to earn
under and upon the terms of the LTIP as in effect from time to time a Long Term
Bonus based on performance criteria established by the Board or its Compensation
and Organization Committee.
 
2.3(d)  Initial Stock Option Grant. As of the Employment Start Date (the “Grant
Date”), Executive shall receive an non-qualified stock option grant under and
upon the terms of the Company’s 1999 Performance Plan of a total of 75,000
shares of the Company’s stock. Unless earlier forfeited or exercised, these
options will expire ten (10) years following the Grant Date. These options will
be priced as follows: 25,000 options will be priced at the average market share
price as of the Grant Date; 25,000 options will be priced at 110% of the average
market share price as of the Grant Date; and 25,000 options will be priced at
120% of the average market share price as of the Grant Date. These options will
vest during the Employment Period as follows: (1) 25% of each set of options
(i.e. 6,250 of the options priced at the average market share price on the Grant
Date, 6,250 of the options priced at 110% of the average market share price on
the Grant Date, and 6,250 of the options priced at 120% of the average market
share price on the Grant Date) will vest six (6) months following the Grant Date
if Executive is employed by the Company at that time; (2) 25% of each set of
options will vest eighteen (18) months following the Grant Date if Executive is
employed by the Company at that time; (3) 25% of each set of options will vest
thirty (30) months following the Grant Date if Executive is employed by the
Company at that time; and (4) 25% of each set of options will vest forty-two
(42) months following the Grant Date if Executive is employed by the Company at
that time. Except as otherwise provided in the Company’s 1999 Performance Plan,
as amended and restated, if Executive’s employment terminates for any reason,
all options that have not vested as of the Date of Termination shall immediately
lapse and terminate without pro ration.
 
2.3(e) Savings, Deferred Compensation and Retirement Plans. Throughout the
Employment Period, the Executive shall be entitled to participate in all
savings, deferred compensation and retirement plans generally available to other
peer executives of the Company, with the exception that the Compensation and
Organization Committee of the Board has indicated its intention to reassess the
Company’s Supplemental Plan for Selected Management Employees and the Executive
shall not participate in that plan without an affirmative decision on the part
of such Committee to include him in that Plan.
 
2.3(f) Welfare Benefit Plans. Throughout the Employment Period (and thereafter,
to the extent provided for in Section 4.1(c) hereof), the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company to peer executives generally (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent generally available to other peer
executives of the Company.
 
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2.3(g) Business Expenses. Throughout the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable business expenses
incurred by the Executive, in accordance with and subject to the policies,
practices and procedures generally applicable to other peer executives of the
Company.
 
2.3(h) Temporary Living Expenses. During the three (3) month period immediately
following Executive’s Employment Start Date, the Company will reimburse
Executive for the reasonable and customary expenses Executive actually incurs
for room and board while in the Atlanta, Georgia metropolitan area while
Executive is employed by the Company. While the Executive is employed by the
Company, the Company also will reimburse Executive for the reasonable cost of up
to ten (10) personal round trip coach flights between Vermont and Atlanta,
Georgia, incurred at any time following the Executive’s Employment Start Date.
 
2.3(i) Relocation Expenses. The Company will reimburse the Executive for the
reasonable and customary expenses actually incurred relating to the Executive’s
move of the Executive’s household belongings from the Executive’s then-current
residence in Vermont to the Atlanta, Georgia metropolitan area in accordance
with and upon the terms of the Company’s relocation policy, provided this move
occurs on or before the second anniversary of the Employment Start Date. Upon
the Executive’s purchase or lease of housing in the Atlanta, Georgia
metropolitan area during the Employment Period, and provided that the Executive
was employed by the Company as of the closing date of such purchase or lease and
no Notice of Termination was given prior to such date, the Company will pay the
Executive a lump-sum amount equal to one-twelfth (1/12) of the Executive’s then
Annual Base Salary (the “Relocation Payment”). The Company will also make an
additional payment (the “Gross-Up Payment”) to the Executive in an amount
required to allow the Executive to retain the full amount of the Relocation
Payment after payment by the Executive of all income taxes on the Relocation
Payment and the Gross-Up Payment.
 
2.3(j) Miscellaneous Expenses. Throughout the Employment Period, the Company
will reimburse the Executive for the cost of maintaining a membership in one
airline club of the Executive’s choosing. In addition, during the Employment
Period, the Company will provide the Executive with the use, while in the
Atlanta area, of the 2006 Lexus automobile maintained by the Company in Atlanta,
Georgia beginning on the Executive’s Employment Start Date and continuing until
the current lease for the 2006 Lexus expires or date a Notice of Termination is
given, whichever first occurs. The current lease is scheduled to expire on June
30, 2008. The Company will pay or reimburse the Executive for automobile
insurance for the vehicle and for the lease payments and taxes associated with
the lease, excluding costs incurred outside the parameters of the lease.
 
2.3(k) Office and Support Staff. Throughout the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to personal secretarial and other assistance, as are
generally provided to other peer executives of the Company.
 
2.3(l) Vacation. Throughout the Employment Period, the Executive shall be
entitled to four (4) weeks of paid vacation annually and otherwise in accordance
with the plans, policies, programs and practices as are generally provided to
other peer executives of the Company.
 
 
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Section 3: Termination of Employment.
 
3.1 Death. The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period.
 
3.2 Disability. If the Company determines in good faith that the Disability of
the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), the Company may give to the Executive
written notice in accordance with Section 7.1 of its intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the thirtieth (30th) day after receipt of
such notice by the Executive (the “Disability Effective Date”), provided that,
within the thirty (30) days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, “Disability” shall mean that the Executive is unable with
reasonable accommodation to perform the services required of the Executive
hereunder on a full-time basis for a period of one hundred eighty (180)
consecutive business days or more by reason of a physical and/or mental
condition or injury. “Disability” shall be deemed to exist when certified by a
physician selected by the Company and acceptable to the Executive or the
Executive's legal representative (such agreement as to acceptability not to be
withheld unreasonably). The Executive will submit to such medical or psychiatric
examinations and tests as such physician deems necessary to make any such
Disability determination.
 
3.3 Termination for Cause. The Company may terminate the Executive's employment
during the Employment Period for “Cause,” which shall mean termination based
upon: (i) the Executive's willful and continued failure or refusal to
substantially perform the Executive’s duties with the Company (other than as a
result of incapacity due to physical or mental condition), after a written
demand for substantial performance is delivered to the Executive by the Company,
which specifically identifies the manner in which the Executive has not
substantially performed his duties, (ii) the Executive's commission of an act
constituting a criminal offense that would be classified as a felony under the
applicable criminal code or involving moral turpitude, dishonesty, or breach of
trust, (iii) the Executive is required to cease being an officer of the Company,
or is unable to perform any of the Executive’s duties under this Agreement, by
reason of any regulatory requirement or the order or suggestion of any agency or
body that has any supervisory or regulatory authority over the Company; (iv)
violation of the Company’s Code of Conduct, or any policy prohibiting
harassment, discrimination, disclosure of confidential information, alcohol or
drug use, or retaliation; (v) misappropriation of property of the Company or one
of its affiliated businesses, breach of fiduciary duty, or material violation of
any law or regulation that may result in a material financial loss to the
Company or damage its reputation, or (vi) the Executive's material breach of any
provision of this Agreement. For purposes of this Section, no act or failure to
act on the Executive's part shall be considered “willful” unless done, or
omitted to be done, without good faith and without reasonable belief that the
act or omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until (i) the Executive receives a Notice of Termination from the
Company, (ii) the Executive is given the opportunity, with counsel, to be heard
before the Board, and (iii) the Board finds, in its good faith opinion, that the
Executive was guilty of the conduct set forth in the Notice of Termination.

3.4 Termination for Good Reason. The Executive may terminate his employment with
the Company during the Employment Period for “Good Reason,” which shall mean:
 
3.4(a) the assignment to the Executive of any duties inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements),
 
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authority, duties or responsibilities as contemplated by Section 2.2(a) or any
other action by the Company which results in the diminution in such position,
authority, duties or responsibilities, excluding for this purpose any action (i)
not taken in bad faith by the Company and (ii) which the Company remedies
promptly after receipt of notice thereof given by the Executive;

3.4(b) (i) the failure by the Company to continue in effect any benefit or
compensation plan, stock ownership plan, life insurance plan, health and
accident plan or disability plan to which the Executive is entitled as specified
in Section 2.3, provided that the Company may amend, modify or replace any such
plan or plans as long as the Executive 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, (ii) the taking of
any action by the Company which would adversely affect the Executive’s
participation in, or materially reduce the Executive’s benefits under, any plans
described in Section 2.3, or deprive the Executive of any benefits enjoyed by
the Executive as described in Section 2.3(j) and (k), or (iii) the failure of
the Company to provide the Executive with paid vacation to which the Executive
is entitled as described in Section 2.3(l);

3.4(c) the Company’s requiring the Executive to be based at any office or
location other than the Company’s office in the Atlanta, Georgia metropolitan
area;
 
3.4(d) a material breach by the Company of any provision of this Agreement;
 
3.4(e) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; and
 
3.4(f) the failure of a successor of the Company to expressly assume and agree
to perform this Agreement pursuant to the provisions of Section 6.2 of this
Agreement; provided, however, that a termination of employment by the Executive
(A) subsequent to an express assumption and agreement to perform this Agreement
by such successor, or (B) subsequent to a date that is two years after the
succession event, shall not be deemed to be for “Good Reason” under this
subsection.
 
For purposes of this Section, any good faith determination of “Good Reason” made
by the Executive shall be conclusive unless and until such determination is
overturned by a court of competent jurisdiction.
 
3.5 Voluntary Termination by the Executive. The Executive may voluntarily
terminate the Executive’s employment with the Company for any reason or for no
reason at any time during the Employment Period.

3.6 Termination by the Company without Cause. The Company may terminate the
Executive’s employment with the Company for any reason or for no reason, without
citing Cause, at any time during the Employment Period, subject to the
provisions of Section 4 of this Agreement.

3.7 Notice of Termination. Any termination of the Executive’s employment with
the Company for Cause or Disability, or voluntary termination by the Executive,
shall be communicated by Notice of Termination from the terminating party to the
other party, given in accordance with Section
 
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7.1. For purposes of this Agreement, a “Notice of Termination” means a written
notice which (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 the
Executive's employment under the provision so indicated, and (iii) if the Date
of Termination (as defined in Section 3.7 hereof) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than fifteen (15) days after the giving of such notice). The failure by the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause shall not waive any right of the Company
hereunder or preclude the Company from asserting such fact or circumstance in
enforcing the Company's rights hereunder.

3.8 Date of Termination.“Date of Termination” means (i) if the Executive's
employment is terminated by the Company for Cause, the Date of Termination shall
be the date of receipt by the Executive of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be, or (iii) if the Executive’s employment is
voluntarily terminated by the Executive, the Date of Termination shall be a date
specified in the Notice of Termination, with such specified date being not less
than ten (10) days after the date of receipt by the Company of the Notice of
Termination, (iv) if the Executive's employment is terminated other than for
Cause, death, or Disability, the Date of Termination shall be the date of
receipt by the Executive of the Notice of Termination.

Section 4: Certain Benefits Upon Termination.

4.1 Termination by the Company Other Than For Cause; Termination by the
Executive for Good Reason. If, during the Employment Period, the Company
terminates the Executive's employment other than for Cause or Disability or if
the Executive terminates his employment for Good Reason, the Executive shall be
entitled to the payment of the benefits provided below:

4.1(a) Accrued Obligations. Within thirty (30) days after the Date of
Termination, the Company shall pay to the Executive the sum of (1) the
Executive's accrued salary through the Date of Termination for periods of time
prior to the Date of Termination, (2) the accrued benefits payable to the
Executive under any deferred compensation plan, program or arrangement in which
the Executive is a participant subject to the computation of benefits provisions
of such plan, program or arrangement, and (3) any accrued vacation pay; in each
case to the extent not previously paid (the “Accrued Obligations”).
 
4.1(b) Annual Base Salary. The Executive shall be entitled to receive an amount
equal to the Annual Base Salary, payable as and when described below. This
amount (the “Separation Payment”) will be paid over a one (1) year time period
in the same equal monthly, semi monthly or bi-weekly installments at which the
Executive had been paid at the time employment terminated; provided that, to the
extent required to avoid the tax consequences of Section 409A of the Code, and
with the consent of the Executive: (i) the first payment shall cover all
payments scheduled to be made to the Executive during the first six (6) months
after the Date of Termination; and (ii) the first such payment shall be delayed
until the day after the six (6) month anniversary of the Date of Termination.
The Company at any time after the six (6) month anniversary of the Date of
Termination may elect to pay the balance of any remaining payments in a lump
sum.

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4.1(c) Medical and Health Benefit Continuation. With respect to the twelve (12)
month period immediately following the Date of Termination, the Company shall
reimburse the Executive, on a monthly basis, for that portion of the cost
incurred by the Executive to continue the Executive’s then existing coverage
under the Company’s group health insurance plan after the Date of Termination
equal to the portion paid for by the Company for such coverage immediately prior
to the Date of Termination, provided the Executive timely elects COBRA
continuation coverage; provided, however, that if the Executive becomes employed
with another employer and is eligible to receive medical or health benefits
under another employer-provided plan, program, practice or policy then this
benefit shall cease; and provided further that to the extent necessary to avoid
the tax consequences of Section 409A of the Code, and with the consent of the
Executive, the Company will not make any reimbursement payment to the Executive
that otherwise would be due prior to the day after the six (6) month anniversary
of the Date of Termination, in which case the Company will make a catch up
payment for all amounts previously paid by the Executive that were eligible or
reimbursement.
 
4.1(d) Other Benefits. To the extent not previously paid or provided, the
Company shall timely pay or provide to the Executive and/or the Executive's
family any other amounts or benefits required to be paid or provided for which
the Executive and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or contract or
agreement of the Company as those provided generally to other peer executives
and their families (“Other Benefits”), provided, however, that to the extent
necessary to avoid the tax consequences of Section 409A of the Code, any such
payments may be delayed until the first business day following the six (6) month
anniversary of the Date of Termination.
 
4.2 Termination Due to Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for (i) payment of Accrued
Obligations (as defined in Section 4.1(a)) (which shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
thirty (30) days of the Date of Termination) and (ii) the timely payment or
provision of Other Benefits (as defined in Section 4.1(d)), including death
benefits pursuant to the terms of any plan, policy, or arrangement of the
Company.

4.3 Termination Due to Disability. If the Executive's employment is terminated
by reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for (i) payment of Accrued Obligations (as defined in Section 4.1(a))
(which shall be paid to the Executive in a lump sum in cash within thirty (30)
days of the Date of Termination) and (ii) the timely payment or provision of
Other Benefits (as defined in Section 4.1(d)) including Disability benefits
pursuant to the terms of any plan, policy or arrangement of the Company.

4.4 Termination by the Company for Cause or Voluntary Termination by the
Executive. If the Executive's employment shall be terminated by the Company for
Cause during the Employment Period or by the Executive for any reason, this
Agreement shall terminate without further obligations to the Executive, other
than for (i) payment of the Executive’s Accrued Obligations (as defined in
Section 4.1(a)) (which shall be paid to the Executive in a lump sum in cash
within thirty (30) days of the Date of Termination), and (ii) the timely payment
or provision of Other Benefits (as defined in Section 4.1(d)), as applicable for
such termination.
 
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4.5  Entire Agreement; Prior Agreements and Benefits under Other Plans
Superseded. This Agreement is the entire agreement of the parties on the subject
matter contained herein and shall supersede all prior agreements, arrangements
and understandings that the Executive and the Company may have had with respect
to the Executive’s employment with the Company and the payment of benefits by
the Company to the Executive in the event of a termination of the Executive’s
employment. The benefits payable pursuant to this Agreement are in lieu of and
in substitution for any termination benefits payable by the Company in
conjunction with any other plan, program, policy, practice, contract or
agreement that the Company may have had either in the past, currently or in the
future.

4.6 Full Settlement. The Company's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, except as provided in Section
4.1(c), such amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of 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 Executive regarding the
amount of any payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable Federal rate provided for in Code Section
7872(f)(2)(A).

4.7 Resolution of Disputes. If there shall be any dispute between the Company
and the Executive (i) as to whether any termination of the Executive’s
employment was for Cause or (ii) as to whether any termination of the
Executive’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 Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive’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
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 4.7 except upon receipt of an
undertaking by or on behalf of the Executive to repay all such amounts to which
the Executive is ultimately adjudged by such court not to be entitled. 
 
Section 5: Non-Competition.

5.1 Non-Compete Agreement.

5.1(a) During the Employment Period and the one (1) year period immediately
following the Date of Termination, the Executive shall not, without prior
written approval of the Board, become a partner, officer, director, stockholder,
investor, advisor, employee, consultant, agent, or otherwise of any business
enterprise in substantial direct competition (as defined in Section 5.1(b)) with
the Company or any of its subsidiaries in the United States or in any other
country in which the Company conducts business on the Date of Termination, or
otherwise engage in substantial direct competition with the Company
 
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within such area. This restriction will not limit the Executive’s right to
invest in five percent (5%) or less of the outstanding capital stock or other
equity securities of any corporation, whose stock or securities are publicly
traded on a national stock exchange.
 
5.1(b) For purposes of Section 5.1, a business enterprise with which the
Executive becomes associated shall be considered in substantial direct
competition, if such entity competes with the Company or its subsidiaries in any
business in which the Company or any of its subsidiaries is now engaged and is
within the Company's or the subsidiary’s market area as of this date.
 
5.1(c)  During the one (1) year period immediately following the Date of
Termination, the Executive shall not directly or indirectly, solicit or recruit
for employment, any person or persons who are employed by the Company or one of
its subsidiaries or affiliates, or who were so employed at any time within a
period of six (6) months immediately prior to the date the Executive’s
employment terminated, or otherwise interfere with the relationship between any
such person and the Company; nor will the Executive assist anyone else in
recruiting any such employee to work for another company or business or discuss
with any such person his or her leaving the employ of the Company or engaging in
a business activity in competition with the Company. This provision shall not
apply to secretarial, clerical, custodial or maintenance employees.

5.2 Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company, and under a relationship of trust and
confidence, all secret or confidential information, knowledge or data relating
to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). This includes but is not limited to
internal financial information that is not publicly available, business plans
and strategies, acquisition and divestiture plans and strategies, costs,
pricing, business proposals, trade secrets, and information concerning the
needs, purchasing history, concerns, key contacts, requirements and credit of
customers After termination of the Executive's employment with the Company, the
Executive shall not, without the prior written consent of the Company, or as may
otherwise be required by law or legal process, use, or communicate or divulge
any such information, knowledge or data to anyone other than the Company and
those designated by it. In no event shall an asserted violation of the
provisions of this Section constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.

Section 6:  Successors.
 
6.1 Successors of the Executive.  This Agreement is personal to the Executive
and, without the prior written consent of the Company, the rights (but not the
obligations) shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive's legal representatives.

6.2 Successors of Company. The Company will 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 the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any
 
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successor to its business and/or its assets which assumes and agrees to perform
this Agreement by operation of law, or otherwise.

Section 7: Miscellaneous.

7.1 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 personally 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 the Company shall be
directed 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 the Executive:

John Olbrych
84 Old Barn Lane
Brownsville, VT 05037

Notice to Company:

Angelica Corporation
424 South Woods Mill Road
Chesterfield, Missouri 63017-3406
Attention: Secretary

7.2 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

7.3 Withholding. The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

7.4 Entire Agreement; Waiver. This Agreement contains the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior oral and written communications and agreements between the parties
concerning such subject matter. Neither this Agreement nor any of its terms may
be amended, waived, or added to except in a writing signed by the Company
(through a designated and authorized officer other than the Executive) and the
Executive. The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company 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.
 
7.5 Section 409A Compliance. The parties intend that all provisions of this
Agreement comply with the requirements of Code Section 409A to the extent
applicable. No provision of this Agreement shall be operative to the extent that
it will result in the imposition of the additional tax described in Code Section
409A(a)(1)(B)(i)(II) and the parties agree to revise the Agreement as necessary
to comply with Section 409A and fulfill the purpose of the voided provision.
Nothing in this Agreement shall be interpreted to permit accelerated payment of
nonqualified deferred compensation, as defined in Section 409A, or any other
payment in violation of the requirements of such Code Section 409A.

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IN WITNESS WHEREOF, the Executive 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.

“Executive”

/s/ J. S. Olbrych                                   

 
John Olbrych

“Company”
 
ANGELICA CORPORATION

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

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