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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1994
Commission file number: 1-5256
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V. F. CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1047 NORTH PARK ROAD
WYOMISSING, PA 19610
(Address of principal executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
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<S> <C>
Common Stock, without par value, New York Stock Exchange
stated capital $1 per share and
Preferred Stock Purchase Rights Pacific Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /X/
As of March 1, 1995, 64,098,102 shares of Common Stock of the registrant were
outstanding, and the aggregate market value of the common shares (based on the
closing price of these shares on the New York Stock Exchange) of the registrant
held by nonaffiliates was approximately $2.7 billion. In addition, 2,014,427
shares of Series B ESOP Convertible Preferred Stock of the registrant were
outstanding and convertible into 1,611,542 shares of Common Stock of the
registrant, subject to adjustment. The trustee of the registrant's Employee
Stock Ownership Plan is the sole holder of such shares, and no trading market
exists for the Series B ESOP Convertible Preferred Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report for the fiscal year ended December 31, 1994
(Items 1 and 3 in Part I and Items 5, 6, 7 and 8 in Part II).
Portions of the Proxy Statement dated March 17, 1995 for the Annual Meeting of
Shareholders to be held on April 18, 1995 (Item 4A in Part I and Items 10, 11,
12 and 13 in Part III).
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PART I
ITEM 1. BUSINESS
VF Corporation, through its operating subsidiaries, designs, manufactures and
markets branded apparel products primarily in four product categories:
jeanswear, knitwear, intimate apparel and children's playwear. VF Corporation,
organized in 1899, oversees the operations of its subsidiaries, providing them
with financial and administrative resources. Management of each operating
company is responsible for the growth and development of its business, within
guidelines established by Corporate management. Unless the context indicates
otherwise, the term "Company" used herein means VF Corporation and its
subsidiaries.
1994 ACQUISITIONS
In January 1994, the Company acquired in separate transactions H.H. Cutler
Company ("Cutler") and Nutmeg Industries, Inc. ("Nutmeg") for an aggregate
consideration of $506.9 million. Both companies design, manufacture and market
imprinted sports apparel under licenses granted by the four major American
professional sports leagues - - Major League Baseball, the National Basketball
Association, the National Football League and the National Hockey League. In
addition, Cutler manufactures and markets children's playwear and sleepwear and
is one of the largest youthwear apparel licensees of Walt Disney products.
Nutmeg's products are sold primarily in department and specialty stores, and
Cutler's products are sold primarily through mass merchants.
BUSINESS GROUPS
In early 1994, the Company reorganized into five new strategic business groups
- - Jeanswear, Decorated Knitwear, Intimate Apparel, Playwear and Specialty
Apparel - - where the Company has the size, brands and opportunities to grow
on a global basis. While the integrity of each of the operating
divisions is maintained, their management, as a member of one of the five
business groups, is charged with the additional responsibility of maximizing
the skills and resources available within their business group to identify
opportunities for global growth and profit improvement, develop synergies and
participate in common projects. Information regarding the operations, sales
and profitability of these business groups is included in pages 16, 17 and 19
of the Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1994 ("1994 Annual Report"), which information is incorporated
herein by reference.
JEANSWEAR
The Jeanswear business group is comprised of the Lee and the Wrangler
divisions in the United States and Europe and the Girbaud division. Lee
manufactures jeanswear and other casualwear sold principally under its LEE(R)
trademark. During 1993, Lee introduced the RIDERS brand of jeans
and casualwear. Wrangler manufactures jeanswear primarily under its
WRANGLER(R) and RUSTLER(R) trademarks. Wrangler also offers a line of shirts to
complement its jeanswear products. Lee and Wrangler offer a line of cotton
casual pants and shirts under the LEE CASUALS(R) and TIMBER CREEK BY
WRANGLER(R) brands. The Girbaud division licenses the MARITHE & FRANCOIS
GIRBAUD(R) label in the United States to market branded fashion jeans and
casual apparel.
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According to industry data, approximately 443 million pairs of jeans made of
denim, twill, corduroy and other fabrics were sold in the United States in
1994. This same data indicates that the Company currently has the largest
combined share of this market at approximately a 30% share, with RUSTLER,
WRANGLER and LEE having the second, third and fourth largest unit shares of the
jeans market in the United States, respectively.
The Lee and the Wrangler divisions in the United States own and operate
numerous cutting, sewing and laundry facilities. Seventy-one percent of
finished garments are produced in Lee and Wrangler domestic plants and 15% in
their sewing facilities in Mexico and other Caribbean countries; the balance
is manufactured by independent contractors. Sixty-two percent of the Lee and
Wrangler products in Europe are produced in owned plants in the United Kingdom,
Belgium, Malta and Poland, with the balance (mostly tops) sourced from
independent contractors. During 1994, the Company acquired a majority interest
in a joint venture in China to manufacture and market LEE brand jeans. This is
the first American jeans brand to make a major move into the Chinese market.
Lee also participates in a joint venture in Spain and Portugal. Both Lee and
Wrangler have licensed their brand names for jeanswear and related products in
foreign markets where they do not have production or sales operations.
In 1993, the Lee division repositioned its LEE brand products by marketing
solely through department and specialty stores. The Lee division's RIDERS
brand is now sold through the mass merchant and discount store channels. The
Wrangler division markets its WRANGLER westernwear through western specialty
stores and its other WRANGLER brand products primarily through discount stores.
The RUSTLER brand is a high quality, lower priced brand marketed to large
national discount chains. MARITHE & FRANCOIS GIRBAUD products are sold to
upscale department and specialty stores. Sales for all divisions are generally
made directly to retailers through full-time salespersons.
In international markets, LEE and WRANGLER jeanswear and related products are
marketed to department stores and specialty shops. Sales of MAVERICK(R)
branded jeanswear in Europe have been growing in the discount channel of
distribution. Internationally, jeanswear products are sold through the Lee and
the Wrangler sales forces and independent sales agents.
DECORATED KNITWEAR
The largest single component of the Decorated Knitwear business group is
Bassett-Walker, one of the nation's largest manufacturers of knitted
fleecewear. Operations are vertically integrated and include the entire
process of converting cotton yarn into finished T-shirt and fleece garments.
Products are marketed by an in-house staff of salespersons throughout the
United States to national chain and department stores, discount stores,
wholesalers and garment screen printing operators. In 1994, approximately
one-half of Bassett-Walker's volume was knitted fleecewear and T-shirts
marketed under the LEE and RIDERS labels. Bassett-Walker also manufactures
products for private label customers and supplies a significant portion of the
fleece and T-shirt needs of Nutmeg and JanSport.
In January 1994, the Company substantially increased its position in imprinted
apparel with the acquisitions of Cutler and Nutmeg. Cutler's sports apparel
division manufactures and markets children's licensed sportswear imprinted with
the names and logos of professional sports teams.
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Cutler's products are distributed through mass merchandisers and discount
stores. Nutmeg's adult licensed apparel, imprinted with professional and
college sports logos, is distributed through department, sporting goods and
athletic specialty stores. Nutmeg also manufactures and markets apparel
imprinted with professional soccer and other sports logos in Europe. The Major
League Baseball and the National Hockey League strikes and significant pricing
pressures throughout the industry adversely impacted this business group.
Beginning in 1995, many of the products formerly bearing the NUTMEG(R) label
will be marketed under the new LEE SPORT(TM) label. In addition, the JanSport
college division imprints and markets JANSPORT(R) branded fleeced casualwear
and T-shirts with college logos for distribution through college bookstores.
INTIMATE APPAREL
The Intimate Apparel business group consists primarily of Vanity Fair
Mills in the United States and several intimate apparel divisions in Europe.
The Vanity Fair division manufactures and markets bras, panties, daywear,
shapewear, robes and sleepwear products under the VANITY FAIR(R) label for
domestic department and specialty stores. In addition, Vanity Fair
manufactures and markets bras and panties under the VASSARETTE(R) brand, which
are sold through the discount channel. Vanity Fair also maintains a
significant private label business. Vanity Fair sells most of its products
through its own sales force. The VANITY FAIR brand name for intimate apparel is
licensed to third parties in several foreign countries.
Over the past three years, the Company has taken decisive steps to establish a
presence in women's intimate apparel in Europe by acquiring several intimate
apparel companies and brands in France and Spain. During 1994, these
businesses were organized into a single management structure. With
manufacturing plants in France, Spain and Tunisia, intimate apparel is marketed
in department and specialty stores under the LOU(R), BOLERO(R) and
SILHOUETTE(TM) brand names primarily in France and under the GEMMA(R), INTIMA
CHERRY(R) and BELCOR(R) brand names primarily in Spain. Intimate apparel is
marketed in discount stores in France under the VARIANCE(R), CARINA(TM) and
SILTEX(TM) brand names. In late 1994, the Company began rolling out the VANITY
FAIR brand across the European continent.
PLAYWEAR
The Playwear business group consists of Healthtex, the playwear and sleepwear
divisions of Cutler and the preschool sizes of the Lee and the Wrangler
divisions. Products marketed under the HEALTHTEX(R) label are sold primarily
to department and specialty stores. Cutler products, generally imprinted with
characters licensed from The Walt Disney Company or others, are marketed
primarily to mass merchandise and discount stores. LEE and WRANGLER children's
sizes are marketed in distribution channels consistent with their respective
adult sizes. During 1995, the licensed FISHER-PRICE(R) brand will be expanded
as a joint effort of the Healthtex and Cutler divisions, and Cutler will
introduce a line of licensed NIKE(R) brand childrenswear. Substantially all
products are manufactured in the divisions' plants.
SPECIALTY APPAREL
Red Kap is a leading producer of occupational and career apparel sold primarily
under the RED KAP(R) label. Approximately 75% of Red Kap's sales are to
industrial laundries that in turn supply work
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clothes to employers, primarily on a rental basis, for on-the-job wear by
production, service and white-collar personnel. Products include work pants,
slacks, work and dress shirts, overalls, jackets and smocks. Because
industrial laundries maintain minimal inventories of work clothes, a supplier's
ability to offer rapid delivery is an important factor in this market. Red
Kap's commitment to customer service has enabled customer orders to be filled
within 24 hours of receipt and has helped to provide Red Kap with a significant
share of the industrial laundry rental business. In addition, Red Kap markets
a line of work clothes nationally to retail stores under the BIG BEN(R) brand
name.
Jantzen designs, manufactures and markets an extensive line of women's quality
swimwear and sportswear, including coordinated tops and bottoms, primarily
under the JANTZEN(R) trademark. A significant portion of Jantzen's products
are manufactured by independent contractors. Jantzen products are sold
primarily to department and specialty stores through its sales staff. Jantzen
also manufactures and markets its products in Canada, and the JANTZEN trademark
is licensed to other companies in several foreign countries. The Jantzen men's
sweater and sportswear businesses were terminated in late 1994.
The JanSport equipment division manufactures JANSPORT brand daypacks sold
through college bookstores and department and sporting goods stores and
JANSPORT backpacking and mountaineering gear sold primarily through outdoor and
sporting goods stores. JANSPORT daypacks and bookbags have the leading brand
share in the United States.
RAW MATERIALS
The Company's raw materials include fabrics made from cotton, synthetics and
blends of cotton and synthetic yarn. Fabric for its United States operations
is purchased from several domestic suppliers against scheduled production, and
fabric for its international operations is purchased from several international
suppliers. The fabric is cut and sewn into finished garments.
The Company's Bassett-Walker division purchases substantially all of its cotton
yarn and cotton and synthetic blend yarn from a major textile company under a
long-term supply agreement. Additional yarn is available from numerous other
sources. The Vanity Fair division purchases yarn from several suppliers. These
two divisions knit the yarn into fabric, which is then cut and sewn into
finished garments.
The Company also purchases thread and trim (buttons, zippers, snaps and lace)
from numerous suppliers. The Company has not experienced difficulty in
obtaining fabric and other raw materials to meet production needs during 1994
and does not anticipate difficulties in 1995. The loss of any one supplier
would not have a significant adverse effect on the Company's business.
SEASONALITY
The apparel industry in the United States has four primary retail selling
seasons -- Spring, Summer, Back-to-School and Holiday, while international
markets typically have Spring and Fall selling seasons. As an apparel
manufacturer, sales to retailers generally precede the retail selling
seasons, although the demand peaks from our retail customers have been reduced
in recent years as more products are being sold on a replenishment basis.
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Overall, with its diversified product offerings, the Company's operating
results are not highly seasonal. On a quarterly basis, consolidated net sales
range from a low of approximately 22% in the first quarter to a high of 28% in
the third quarter. Sales of the Decorated Knitwear business group, however,
are more seasonal in nature, with approximately 60% of its sales of T-shirt and
fleece products in the second half of the year.
Working capital requirements vary throughout the year. Working capital
increases during the first half of the year as inventory builds to support peak
shipping periods, and accordingly decreases during the second half. Cash
provided by operations is substantially higher in the second half of the year
due to higher net income and reduced working capital requirements during that
period.
ADVERTISING
The Company supports its brands through extensive advertising and promotional
programs and through sponsorship of special events. The Company advertises on
national and local radio and television and in consumer and trade publications.
It also participates in cooperative advertising on a shared cost basis with
major retailers in radio, television and various print media. In addition,
point-of-sale fixtures and signage are used to promote products at the retail
level. During 1994, the Company spent $219 million advertising and promoting
its products.
OTHER MATTERS
COMPETITIVE FACTORS
Trademarks are of material importance to all of the Company's operating
subsidiaries. Company-owned brands are protected by registration or otherwise
in the United States and most other markets where the related products are
sold. These trademark rights are enforced and protected by litigation against
infringement as necessary. The Company has granted licenses to other parties
to manufacture apparel products in geographic areas where the Company does not
have operations. The Company assures that these parties adhere to the same
high standards of quality used in the Company's own operations.
In some instances, the Company pays a royalty to use the trademarks of others.
The MARITHE & FRANCOIS GIRBAUD label is under license in the United States
through 1997, subject to a single five year renewal term. The Company has
licenses granted by the four major American professional sports leagues - -
Major League Baseball, the National Basketball Association, the National
Football League and the National Hockey League. Apparel is also manufactured
and marketed featuring licensed characters from The Walt Disney Company, as
well as apparel under the licensed FISHER-PRICE and NIKE labels. Some of these
license arrangements are for a short term and may not contain specific renewal
options. Management believes that loss of any license would not have a
material adverse effect on the Company.
The apparel industry is highly competitive and consists of a number of domestic
and foreign companies; some competitors have assets and sales greater than
those of the Company. In addition, the Company competes with a number of firms
that produce and distribute only a limited number of
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products similar to those sold by the Company or sell only in certain
geographic areas being supplied by the Company.
A characteristic of the apparel industry is the requirement that a manufacturer
recognize fashion trends and adequately provide products to meet such trends.
Competitive advantage in the industry is obtained by manufacturing better
quality, market-responsive apparel and delivering to the retailer on time and
at lower cost. The Company is striving to achieve this competitive edge with
its Market Response System and proprietary FLOW REPLENISHMENT SYSTEM(R). The
FLOW REPLENISHMENT SYSTEM is capable of capturing the sale of an individual
garment at the time the consumer purchases the garment, creating and processing
all necessary documentation, and shipping the exact garment to the retailer so
that it is back on the selling store's shelf in less than seven days.
EMPLOYEES
The Company employs approximately 68,000 men and women, of which approximately
6,500 are covered by various collective bargaining agreements. Employee
relations are considered to be good.
BACKLOG
The dollar amount of backlog of orders believed to be firm as of the end of the
Company's fiscal year and as of the end of the preceding fiscal year is not
material for an understanding of the business of the Company taken as a whole.
ITEM 2. PROPERTIES.
The Company owns most of its facilities used in manufacturing, distribution and
administrative activities. Certain other facilities are leased under operating
leases that generally contain renewal options. Management believes all
facilities and machinery and equipment are in good condition and are suitable
for the Company's needs. Manufacturing and distribution facilities presently
being utilized are summarized below for the Company's business groups:
<TABLE>
<CAPTION>
Square
Business Group Footage
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<S> <C>
Jeanswear 7,628,000
Decorated Knitwear 4,581,000
Intimate Apparel 2,336,000
Playwear 1,562,000
Specialty Apparel 2,426,000
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18,533,000
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</TABLE>
In addition, the Company owns or leases various administrative and office
space. The Company also has facilities having 2,648,000 square feet of space
that is used for factory outlet operations. Approximately 76% of the factory
outlet space is used for selling and warehousing the Company's products, with
the balance consisting of space leased to tenants and common areas.
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ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings or investigations pending or threatened
to which the Company or any of its operating companies is a party or of which
any of their property is the subject.
Notwithstanding the foregoing, the text under the caption "Other Matters"
included in page 21 of the 1994 Annual Report is incorporated herein by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY.
The following are the Executive Officers of VF Corporation as of March 1, 1995.
The term of office of each of the officers continues to the next annual meeting
of the Board of Directors to be held April 18, 1995. There is no family
relationship among any of the VF Corporation officers.
<TABLE>
<CAPTION>
Period Served
Name Position Age In Such Office(s)
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<S> <C> <C> <C>
Lawrence R. Pugh Chairman of the Board and 62 May 1983 to date
Chief Executive Officer
Director February 1980 to date
Mackey J. McDonald President and 48 October 1993 to date
Chief Operating Officer
Director October 1993 to date
Harold E. Addis Vice President - Human 64 July 1988 to date
Resources and Administration
Candace S. Cummings Vice President - General 47 January 1995 to date
Counsel
Gerard G. Johnson Vice President - Finance and 54 December 1988 to date
Chief Financial Officer
Daniel G. Mac Farlan Chairman - Decorated 44 February 1995 to date
Knitwear Coalition
Frank C. Pickard III Vice President - Treasurer 50 April 1994 to date
John P. Schamberger Chairman - Jeanswear 46 February 1995 to date
Coalition
Robert K. Shearer Vice President - Controller 43 April 1994 to date
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Lori M. Tarnoski Vice President 55 May 1979 to date
Secretary May 1974 to date
</TABLE>
Mr. Pugh joined the Company as President in 1980. In 1982, he was elected
Chief Executive Officer and in 1983 was elected Chairman of the Board. In
October 1990, he was also elected President of the Company, serving in that
position until October 1993. Additional information is included in page 3 of
the Company's definitive proxy statement dated March 17, 1995 for the Annual
Meeting of Shareholders to be held on April 18, 1995 ("1995 Proxy Statement").
Mr. McDonald joined the Company's Lee division in 1983 serving in various
management positions until his election as President of the Company's former
Troutman division in 1984. He was named Executive Vice President of the
Wrangler division in 1986 and President of Wrangler in 1988. He was named
Group Vice President of the Company in February 1991 and in October 1993 was
elected President of the Company. Additional information is included in page 3
of the 1995 Proxy Statement.
Mr. Addis joined the Company in 1984 as Vice President - Human Resources and
was elected Vice President - Human Resources and Administration in 1988.
Mrs. Cummings joined the Company as Vice President - General Counsel in January
1995. For the prior five years, she had been a senior business partner at the
international law firm of Dechert Price & Rhoads where she had spent her entire
professional career.
Mr. Johnson joined the Company in 1988 as Vice President - Finance and Chief
Financial Officer.
Mr. Mac Farlan joined the Company's Jantzen division in 1978 serving in various
positions until he was named Vice President and General Manager - Women's
Casualwear in September 1990 and Senior Vice President - Sales and Women's
Casual in June 1992. In July 1993, he was named Vice President - Market
Development of the Intimate Apparel divisions and was elected President of the
Company's VF Factory Outlet division in October 1993. He has been President of
the Company's Nutmeg division since November 1994 and Chairman of the Decorated
Knitwear Coalition since February 1995.
Mr. Pickard joined the Company in 1976 and was elected Assistant Controller in
1982, Assistant Treasurer in 1985, Treasurer in 1987 and Vice President -
Treasurer in April 1994.
Mr. Schamberger joined the Company's Wrangler division in 1972 serving in
various positions until he was named Vice President and General Manager - New
Brands in 1987 and Vice President - Consumer Marketing in March 1991. He was
elected President of Wrangler in 1992 and Chairman of the Jeanswear Coalition
in February 1995.
Mr. Shearer joined the Company in 1986 as Assistant Controller and was elected
Controller in 1989 and Vice President -Controller in April 1994.
Mrs. Tarnoski joined the Company in 1961. She was elected Assistant Secretary
in 1973, Secretary in 1974 and Vice President in 1979.
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PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Information concerning the market and price history of the Company's common
stock, plus dividend information, as reported under the caption "Quarterly
Results of Operations" on page 15 and under the captions "Investor Information
- Common Stock, Shareholders of Record, Dividend Policy, Dividend Reinvestment
Plan, Dividend Direct Deposit and Quarterly Common Stock Price Information" on
page 32 of the 1994 Annual Report, is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the Company for each of its last five fiscal years
under the caption "Financial Summary" on pages 28 and 29 of the 1994 Annual
Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
A discussion of the Company's financial condition and results of operations is
incorporated herein by reference to pages 17, 19 and 21 of the 1994 Annual
Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company and specific supplementary financial
information are incorporated herein by reference to pages 16, 18, 20 and 22
through 27 of the 1994 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
Information under the caption "Election of Directors" on pages 2 through 4 of
the 1995 Proxy Statement is incorporated herein by reference. See Item 4A with
regard to Executive Officers.
Information under the caption "Compliance with Section 16(a) of the Securities
Exchange Act" on page 23 of the 1995 Proxy Statement is incorporated herein by
reference.
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ITEM 11. EXECUTIVE COMPENSATION.
Information with regard to this item is incorporated herein by reference to
pages 6 through 17 of the 1995 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information under the caption "Certain Beneficial Owners" on page 19 and
"Common Stock Ownership of Management" on page 20 of the 1995 Proxy Statement
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information under the caption "Common Stock Ownership of Management" on page 20
of the 1995 Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial statements - Included on pages 16, 18, 20 and 22
through 27 of the 1994 Annual Report (Exhibit 13) and incorporated by
reference in Item 8:
Consolidated statements of income - - Fiscal years ended December 31, 1994,
January 1, 1994 and January 2, 1993
Consolidated balance sheets - - December 31, 1994 and January 1, 1994
Consolidated statements of cash flows - - Fiscal years ended December 31,
1994, January 1, 1994 and January 2, 1993
Consolidated statements of common shareholders' equity - - Fiscal years
ended December 31, 1994, January 1, 1994 and January 2, 1993
Notes to consolidated financial statements
2. Financial statement schedules - The following consolidated
financial statement schedule is included herein:
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Schedule II - - Valuation and qualifying accounts
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and therefore have been
omitted.
3. Exhibits
Number Description
2 Plan of acquisition, reorganization, arrangement, liquidation or
succession:
(A) Agreement and Plan of Merger between the Company, Spice
Acquisition Co. and Nutmeg Industries, Inc. dated December 12,
1993 (Incorporated by reference to Exhibit (d) Schedule 14D-1
filed December 12, 1993)
3 Articles of incorporation and bylaws:
(A) Articles of Incorporation, as amended and restated as of April
18, 1986 and as presently in effect (Incorporated by reference
to Exhibit 3(A) to Form 10-K for the fiscal year ended January
4, 1992)
(B) Statement Affecting Class or Series of Shares (Incorporated by
reference to Exhibit 3(B) to Form 10-K for the fiscal year
ended January 2, 1993)
(C) Statement with Respect to Shares of Series B ESOP Convertible
Preferred Stock (Incorporated by reference to Exhibit 4.2 to
Form 8-K dated January 22, 1990)
(D) Bylaws, as amended through July 17, 1990 and as presently in
effect (Incorporated by reference to Exhibit 3 to the Form 8
amendment, dated August 10, 1990, to Form 10-Q for the fiscal
quarter ended June 30, 1990)
4 Instruments defining the rights of security holders, including
indentures:
(A) A specimen of the Company's Common Stock certificate
(Incorporated by reference to Exhibit 4(A) to Form 10-K for
the fiscal year ended January 2, 1993)
(B) A specimen of the Company's Series B ESOP Convertible
Preferred Stock certificate (Incorporated by reference to
Exhibit 4(B) to Form 10-K for the fiscal year ended December
29, 1990)
(C) Indenture between the Company and Morgan Guaranty Trust
Company of New York, dated January 1, 1987 (Incorporated by
reference to Exhibit 4.1 to Form S-3 Registration No.
33-10939)
(D) First Supplemental Indenture between the Company, Morgan
Guaranty Trust Company of New York and United States Trust
Company of New York, dated September 1, 1989 (Incorporated by
reference to Exhibit 4.3 to Form S-3 Registration No.
33-30889)
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(E) Rights Agreement, dated January 13, 1988, between the Company
and Morgan Shareholder Services Trust Company (Incorporated by
reference to Exhibit 4(E) to Form 10-K for the fiscal year
ended January 2, 1993)
(F) Amendment No. 1 to Rights Agreement, dated April 17, 1990,
between the Company and First Chicago Trust Company of New
York (Incorporated by reference to Exhibit 4 to Form 10-Q for
the fiscal quarter ended June 30, 1990)
(G) Amendment No. 2 to Rights Agreement, dated December 4, 1990,
between the Company and First Chicago Trust Company of New
York (Incorporated by reference to Exhibit 3 to Form 8-K dated
December 4, 1990)
(H) Second Supplemental Indenture between the Company and United
States Trust Company of New York as Trustee (Incorporated
by reference to Exhibit 4.1 to Form 8-K, dated April 6, 1994)
10 Material contracts:
(A) 1982 Stock Option Plan (Incorporated by reference to Exhibit
4.1.1 of Post-Effective Amendment No. 1 to Form S-8/S- 3,
Registration No. 33-26566)
(B) 1991 Stock Option Plan (Incorporated by reference to Exhibit A
of the Company's 1992 Proxy Statement dated March 18, 1992)
(C) Annual Discretionary Management Incentive Compensation Program
(Incorporated by reference to Exhibit 10(C) to Form 10-K for
the fiscal year ended January 4, 1992)
(D) Deferred Compensation Plan (Incorporated by reference to
Exhibit 10(B) to Form 10-K for the fiscal year ended December
29, 1990)
(E) Executive Deferred Savings Plan (Incorporated by reference to
Exhibit 10(E) to Form 10-K for the fiscal year ended January
4, 1992)
(F) Amended and Restated Supplemental Executive Retirement Plan,
dated May 16, 1989
(G) First Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan for L. R.
Pugh
(H) Second Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan for
Mid-Career Senior Management
(I) Third Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan for Senior
Management
(J) Fourth Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan for
Participants in the Company's Deferred Compensation Plan
14
<PAGE> 15
(K) Fifth Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan which
funds certain benefits upon a Change in Control
(L) Seventh Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan for
Participants in the Company's Executive Deferred Savings Plan
(M) Eighth Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan for
Participants whose Pension Plan Benefits are limited by the
Internal Revenue Code
(N) Form of Change in Control Agreement with senior management of
the Company (Incorporated by reference to Exhibit 10(J) to
Form 10-K for the fiscal year ended December 29, 1990)
(O) Form of Change in Control Agreement with other management of
the Company (Incorporated by reference to Exhibit 10(K) to
Form 10-K for the fiscal year ended December 29, 1990)
(P) Form of Change in Control Agreement with management of
subsidiaries of the Company (Incorporated by reference to
Exhibit 10(L) to Form 10-K for the fiscal year ended December
29, 1990)
(Q) Revolving Credit Agreement, dated October 20, 1994
(R) Executive Incentive Compensation Plan
(S) VF Corporation Restricted Stock Agreement
(T) Discretionary Executive Bonus Plan
11 Computation of earnings per common share
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of experts and counsel
23.2 Consents of experts and counsel
24 Power of attorney
27 Financial data schedule
15
<PAGE> 16
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged Savings
Plan for Salaried Employees for the year ended
December 31, 1994
All other exhibits for which provision is made in the applicable regulations of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the last quarter of the fiscal
year ended December 31, 1994.
OTHER MATTERS
For purposes of complying with the amendments to the rules governing
Registration Statements on Form S-8 under the Securities Act of 1933, the
undersigned Company hereby undertakes as follows, which undertaking shall be
incorporated by reference into the Company's Registration Statements on Form
S-8 Nos. 33-26566 (filed January 12, 1989), 33-33621 (filed February 28, 1990)
and 33-41241 (filed June 24, 1991):
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
V.F. CORPORATION
By: /s/ Lawrence R. Pugh
--------------------------
Lawrence R. Pugh
Chairman of the Board
(Chief Executive Officer)
By: /s/ Gerard G. Johnson
--------------------------
Gerard G. Johnson
Vice President - Finance
(Chief Financial Officer)
By: /s/ Robert K. Shearer
--------------------------
Robert K. Shearer
Vice President - Controller
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:
<TABLE>
<S> <C> <C>
Robert D. Buzzell* Director
Edward E. Crutchfield, Jr.* Director
Ursula F. Fairbairn* Director
Barbara S. Feigin* Director
Roger S. Hillas* Director
Leon C. Holt, Jr.* Director
Robert J. Hurst* Director
J. Berkley Ingram, Jr.* Director March 27, 1995
Robert F. Longbine* Director
Mackey J. McDonald* Director
William E. Pike* Director
Lawrence R. Pugh* Director
M. Rust Sharp* Director
L. Dudley Walker* Director
*By: /s/ L. M. Tarnoski March 27, 1995
-------------------------------
L. M. Tarnoski, Attorney-in-Fact
</TABLE>
17
<PAGE> 18
VF CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
---------------------------------------------------------------------------------------------------------------------
ADDITIONS
--------------------------
(1) (2)
Balance at Charged to Charged to Deductions Balance at
Beginning Costs and Other Accounts Describe End of
of Period Expenses Describe (A) Period
---------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Fiscal year ended December 31, 1994:
Allowance for doubtful accounts $28,808 $11,274 $ 7,288 $32,794
------- ------- ------- -------
Fiscal year ended January 1, 1994:
Allowance for doubtful accounts $30,275 $ 9,146 $10,613 $28,808
------- ------- ------- -------
Fiscal year ended January 2, 1993:
Allowance for doubtful accounts $22,412 $ 8,255 $ 392 $30,275
------- ------- ------- -------
</TABLE>
(A) Deductions include accounts written off, net of recoveries. Amounts are
also net of additions of $2.4 million and $4.3 million in 1994 and 1992,
respectively, from the acquisitions of subsidiaries.
18
<PAGE> 19
The following exhibits of VF Corporation are included in Item 14(a):
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number
Number Description In This Report
------ ----------- --------------
<S> <C> <C>
2 Plan of acquisition, reorganization, arrangement, liquidation
or succession.
(A) Agreement and Plan of Merger between the Company, Incorporated By
Spice Acquisition Co. and Nutmeg Industries, Inc. dated Reference
December 12, 1993
3 Articles of incorporation and bylaws:
(A) Articles of Incorporation, as amended and restated as of Incorporated By
April 18, 1986 and as presently in effect Reference
(B) Statement Affecting Class or Series of Shares Incorporated By
Reference
(C) Statement with Respect to Shares of Series B ESOP Incorporated By
Convertible Preferred Stock Reference
(D) Bylaws, as amended through July 17, 1990 and as presently Incorporated By
in effect Reference
4 Instruments defining the rights of security holders, including
indentures:
(A) A specimen of the Company's Common Stock certificate Incorporated By
Reference
(B) A specimen of the Company's Series B ESOP Convertible Incorporated By
Preferred Stock certificate Reference
(C) Indenture between the Company and Morgan Guaranty Incorporated By
Trust Company of New York, dated January 1, 1987 Reference
(D) First Supplemental Indenture between the Company, Incorporated By
Morgan Guaranty Trust Company of New York and Reference
Untied States Trust Company of New York, dated
September 1, 1989
(E) Rights Agreement, dated January 13, 1988, between the Incorporated By
Company and Morgan Shareholder Services Trust Company Reference
</TABLE>
<PAGE> 20
<TABLE>
<S> <C> <C>
(F) Amendment No. 1 to Rights Agreement, dated April 17, 1990, Incorporated By
between the Company and First Chicago Trust Company Reference
of New York
(G) Amendment No.2 to Rights Agreement, dated Incorporated By
December 4, 1990, between the Company and First Reference
Chicago Trust Company of New York
(H) Second Supplemental Indenture between the Company and Incorporated By
United States Trust Company of New York as Trustee Reference
10 Material contracts:
(A) 1982 Stock Option Plan Incorporated By
Reference
(B) 1991 Stock Option Plan Incorporated By
Reference
(C) Annual Discretionary Management Incentive Compensation Incorporated By
Program Reference
(D) Deferred Compensation Plan Incorporated By
Reference
(E) Executive Deferred Savings Plan Incorporated By
Reference
(F) Amended and Restated Supplemental Executive
Retirement Plan, dated May 16, 1989
(G) First Amended Annual Benefit Determination under
the Amended and Restated Supplemental Executive
Retirement Plan for L.R. Pugh
(H) Second Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Mid-Career Senior Management
(I) Third Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Senior Management
(J) Fourth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement Plan
for Participants in the Company's Deferred Compensation Plan
</TABLE>
<PAGE> 21
<TABLE>
<S> <C> <C>
(K) Fifth Amended Annual Benefit Determination under the Amended
and Restated Supplemental Executive Retirement Plan which
funds certain benefits upon a Change of Control
(L) Seventh Amended Annual Benefit Determination under
the Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Executive Deferred
Savings Plan
(M) Eighth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants whose Pension Plan Benefits are
limited by the Internal Revenue Code
(N) Form of Change in Control Agreement with senior management Incorporated By
of the Company Reference
(O) Form of Change in Control Agreement with other management Incorporated By
of the Company Reference
(P) Form of Change in Control Agreement with management Incorporated By
of subsidiaries of the Company Reference
(Q) Revolving Credit Agreement, dated October 20, 1994
(R) Executive Incentive Compensation Plan
(S) VF Corporation Restricted Stock Agreement
(T) Discretionary Executive Bonus Plan
11 Computation of earnings per common share
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of experts and counsel
23.2 Consents of experts and counsel
24 Power of attorney
27 Financial data schedule
</TABLE>
<PAGE> 22
<TABLE>
<S> <C>
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged Savings
Plan for Salaried Employees for the year ended December 31, 1994
</TABLE>
All other exhibits for which provision is made in the applicable regulations
of the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
<PAGE> 1
VF CORPORATION
AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Amended and Restated Plan amends and restates the original
Supplemental Executive Retirement Plan approved and adopted by the Board of
Directors of VF Corporation on October 16, 1984.
W I T N E S S E T H
WHEREAS, on October 16, 1984, VF Corporation established the Plan for
certain designated Employees, effective as of January 1, 1985; and
WHEREAS, VF Corporation desires to amend and restate the Plan.
NOW, THEREFORE, the Plan is hereby amended and restated to read as
follows:
ARTICLE I. PURPOSE
The purpose of this Plan is to provide benefits to
Participants:
1. to replace benefits lost under the VF Corporation Pension Plan
(the "VF Pension Plan") due to maximum benefit, contribution or compensation
restrictions imposed by ERISA or the Code;
<PAGE> 2
2. which would otherwise be lost under the VF Pension Plan due
to deferral of compensation under the VF Corporation Deferred Compensation Plan
or the VF Executive Deferred Savings Plan;
3. who lost future benefits with former employers as a result of
their joining the Company in mid-career; or
4. which would enable the Company to be competitive in recruiting
and retaining key executives.
ARTICLE II. DEFINITIONS
As used herein, the following words and phrases shall have the
meanings described below. Any word or phrase which is not defined herein shall
have the meaning set forth in the VF Pension Plan unless the context requires
otherwise.
2.01 Annual Accrued Benefits: The Annual Accrued Benefit of a
Participant shall consist of any combination of subparagraphs (a) and (b) below
as determined by the Committee for each Participant and, absent any such
determination by the Committee, shall be the annual benefit determined in
Section 2.01(a)(1) below:
(a) Annual Benefit Determination. The annual benefit shall be
the sum of the following:
(1) the annual benefit that the Participant would have
accrued under the VF Pension Plan (i) computed without regard to any maximum
benefit, contribution or compensation limitations imposed by ERISA or the Code,
and (ii) including all
-2-
<PAGE> 3
compensation which the Participant elected to defer under the VF Corporation
Deferred Compensation Plan or the VF Executive Deferred Savings Plan;
provided, however, that the amount so determined shall be reduced by the
Participant's (i) annual benefit under the VF Pension Plan, and (ii)
benefits received from retirement plan(s) of any former employer(s); and
(2) any supplemental annual benefit recommended by the
Chairman of the Board of Directors of VF Corporation and approved by the
Committee.
(b) Reductions in the Annual Benefit. In determining the
Annual Accrued Benefit, the annual benefit determined under Section 2.01(a)
shall be reduced by any one or more of the following amounts designated by the
Committee:
(1) the Primary Social Security Benefit Offset;
(2) any vested annual benefit payable to the Participant
under any plan provided by a former employer of such Participant; and
(3) such amounts as may be directed by the Committee.
2.02 Beneficiary. The person(s) designated by a Participant to
receive any benefits payable under this Plan subsequent to the Participant's
death. In the event a Participant has not filed a beneficiary designation with
the Company, the Beneficiary shall be the Participant's surviving spouse.
-3-
<PAGE> 4
2.03 Board of Directors. The Board of Directors of VF Corporation.
2.04 Code. The Internal Revenue Code of 1986, as amended, or any
successor tax statute thereto.
2.05 Committee. The Organization and Compensation Committee of
the Board of Directors of VF Corporation, or any successor committee thereto.
2.06 Company. VF Corporation ("VF"); the following domestic
wholly-owned subsidiaries of VF, The Lee Apparel Company, Inc.; Vanity Fair
Mills, Inc.; VF Factory Outlet, Inc.; VF International Division, Inc.;
Grafika Commercial Printing, Inc.; Kay Windsor, Inc.; Bassett-Walker, Inc.; and
Blue Bell, Inc.; and such other subsidiaries as the Board of Directors may
designate from time to time.
2.07 Effective Date. January 1, 1985.
2.08 Employee. An individual employed by the Company.
2.09 ERISA. The Employee Retirement Income Security Act of 1974,
as amended.
2.10 Participant. An Employee who has been designated by the Board
for eligibility in the Plan and who either satisfies the eligibility
requirements set forth in Article III hereof or has a vested benefit hereunder.
In the event of the death or incompetency of a Participant, the term shall
mean his beneficiary, personal representative or guardian.
-4-
<PAGE> 5
2.11 Plan. The Amended and Restated VF Corporation Supplemental
Executive Retirement Plan as set forth herein, as amended and restated from
time to time and including all determinations by the Committee or the Board of
Directors of participation or benefit entitlement pursuant hereto.
2.12 Primary Social Security Benefit Offset. The estimated monthly
primary Social Security benefit which will be payable to the Participant at age
65 or at his Retirement Date, whichever is applicable. For a Participant who
terminates with vested rights under this Plan prior to age 65, his estimated
monthly Primary Social Security Benefit Offset payable at 65 will
be determined under the law in effect upon termination of employment.
2.13 Retirement Date. The date on which the Participant actually
retires under the VF Pension Plan.
2.14 Supplemental Pension. The Annual Accrued Benefit determined
under Section 2.01 of this Plan, subject to the vesting limitation in Section
5.01 hereof.
2.15 VF Pension Plan. The VF Corporation Pension Plan as amended and
restated from time to time, or any successor plan thereto.
ARTICLE III. PARTICIPATION
3.01 An Employee shall become a Participant in the Plan if the
Employee (a) has been recommended by the Chairman of the
-5-
<PAGE> 6
Board of Directors of VF Corporation to become a Participant in the Plan and
such recommendation has been approved by the Committee by a written designation,
and (b) satisfies one or both of the following:
(i) the Employee has lost benefits under the VF Pension Plan
due to the maximum benefit, contribution or compensation
limitations imposed by ERISA or the Code; or
(ii) the Employee has deferred compensation under the VF Corporation
Deferred Compensation Plan or the VF Executive Deferred
Savings Plan.
3.02 The Committee may revoke the designation of any Employee as a
Participant in the Plan at any time before such Participant vests in his or her
Annual Accrued Benefits.
ARTICLE IV. NORMAL RETIREMENT BENEFITS
4.01 The Company will pay each Participant in the Plan a Supplemental
Pension commencing as of the Participant's Retirement Date.
4.02 The Supplemental Pension will be paid to the Participant or
Beneficiary at the same time and in the same manner as retirement benefits are
paid under the VF Pension Plan.
4.03 If approved by the Board of Directors, benefits under this Plan
may be paid at times and in a manner different from retirement benefits under
the VF Pension Plan, as long as
-6-
<PAGE> 7
such benefits are the actuarial equivalent of the Supplemental Pension to which
the Participant or Beneficiary is entitled.
ARTICLE V. VESTING
5.01 A Participant will become vested in his Annual Accrued Benefit
in the same manner as provided for his or her pension benefits under Article
IV of the VF Pension Plan (or such successor provision thereto), unless
otherwise provided by the Committee at the time the Employee has been designated
a Participant in this Plan or thereafter by mutual agreement between the
Company and the Participant.
ARTICLE VI. FUNDING
6.01 Benefits payable under this Plan are not expected to be funded
in advance by the Company and, unless otherwise provided by the Company, will
be paid out of the general assets of the Company. A Participant shall have no
preferred claim against the assets of the Company by virtue of this Plan and
shall be a general, unsecured creditor of the Company to the extent of his or
her right to receive benefits from the Company pursuant to the terms of this
Plan.
ARTICLE VII. MISCELLANEOUS
7.01 Nothing in this Plan (a) shall be deemed to exclude a
Participant from any compensation, bonus, pension, insurance,
-7-
<PAGE> 8
severance pay or other benefit to which he otherwise is or might become
entitled as an Employee of the Company, or (b) shall be construed as conferring
upon an Employee the right to continue in the employ of the Company as an
executive or in any other capacity.
7.02 Amounts payable by the Company hereunder shall not be deemed to
be any type of compensation to a Participant for the purposes of computing any
benefits to which he may be entitled as an Employee or a retired Employee.
7.03 The sale of all or substantially all of the assets of VF, or
the merger, consolidation or reorganization of VF wherein VF is not the
surviving corporation, or any other transaction which, in effect, amounts to
the sale of VF or voting control thereof, shall not terminate this Plan and the
obligations created hereunder shall be binding upon the successors and assigns
of VF.
7.04 The rights and obligations created hereunder shall be binding
on a Participant and his heirs and legal representatives and on the
successors and assigns of the Company.
7.05 This Plan may be amended, modified, suspended or terminated by
resolution of the Board of Directors. In the event the Plan is terminated, each
Participant as of the effective date of the Plan termination will become 100%
vested in his Annual Accrued Benefit.
-8-
<PAGE> 9
7.06 The masculine pronoun whenever used herein shall include the
feminine. Whenever any words are used herein in the singular, they shall be
construed as though they were also used in the plural, in all cases where they
would so apply.
7.07 This Plan shall be Construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
7.08 The rights of any Participant or Beneficiary under this Plan
are personal and may not be assigned, transferred, pledged or encumbered except
as otherwise required by applicable law,and any such attempt to transfer such
rights shall be void.
7.09 The Board of Directors (or its designee) shall have full power
and authority to interpret and administer this Plan and the Board's (or its
designee's) actions in so doing shall be final and binding on all persons
interested in this Plan. The Board of Directors (or its designee) may from time
to time adopt rules and regulations governing this Plan.
7.10 Nothing contained herein shall be deemed to create a trust or
fund of any kind or create any fiduciary relationship.
7.11 Neither the Company nor any member of the Board of Directors
shall be responsible or liable in any manner to any Participant, Beneficiary or
any person claiming through them for any benefit or action taken or omitted in
connection with the granting of benefits, the continuation of benefits, or the
interpretation and administration of this Plan.
-9-
<PAGE> 10
This Amended and Restated Plan was approved by the Board of Directors
of VF Corporation on May 16, 1989.
-10-
<PAGE> 1
FIRST AMENDED SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS AGREEMENT made and entered into as of the 15th day of
October, 1991, by and between VF Corporation, a Pennsylvania corporation (the
"Company") and L.R. Pugh, the Company's Chairman of the Board, President and
Chief Executive Officer ("Pugh").
WHEREAS, Pugh is a Participant in the Company's Amended and
Restated Supplemental Executive Retirement Plan ("SERP"), which became
effective January 1, 1985, as amended and restated May 16, 1989;
WHEREAS, Pugh is a party to the First Supplemental Annual
Benefit Determination adopted pursuant to the resolution of the Company's Board
of Directors adopted December 6, 1988 which, in recognition of the fact that
Pugh lost benefits under the VF Corporation Pension Plan ("VF Pension Plan")
and the qualified plans of former employers as a result of his joining the
Company in mid-career, provides that Pugh's combined retirement income from the
VF Pension Plan and the SERP shall be a specified minimum amount, based on the
formula set forth therein; and
WHEREAS, the Company's Board of Directors, pursuant to the
resolution adopted October 15, 1991 and attached hereto and incorporated herein
by reference, has determined to revise and improve the benefit formula for Pugh
under the aforementioned First Supplemental Annual Benefit Determination,
resulting in the adoption of this First Amended Supplemental Annual Benefit
Determination.
NOW, THEREFORE, in consideration of the agreements and mutual
promises contained herein and in the SERP, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. The Supplemental Pension payable by the Company to
Pugh pursuant to Article IV of the SERP will be the amount which, when added to
his retirement benefit payable from the VF Pension Plan, will result in Pugh's
combined benefits from the VF Pension Plan and the SERP totalling 50% of his
Final Average Compensation, for payments commencing at a Retirement Date of age
60. The percentage of Final Average Compensation shall be increased by 2% for
each year that Pugh's Retirement Date is after age 60, to a maximum of 60% for
a Retirement Date at or after age 65, and shall decrease by 4% for each year
that Pugh's Retirement Date precedes age 60. Final Average Compensation for
this purpose shall mean the average of the highest three years of the full
amount of Pugh's salary and bonus compensation for the five year period
immediately preceding his Retirement Date.
<PAGE> 2
2. The Supplemental Pension determined pursuant to
Paragraph 1 above shall not be subject to reduction for Pugh's Primary Social
Security Benefit Offset, any benefit payable to Pugh under any plan of a former
employer or any other amounts approved by the Committee, notwithstanding the
provisions of Section 2.01(b) of the SERP.
3. Notwithstanding Paragraph 1 above, Pugh's
Supplemental Pension under the SERP shall be the greater of (a) the amount
determined under Paragraph l above and (b) the amount determined under Section
2.01(a) of the SERP (without regard to Paragraph 1 above).
4. The Supplemental Pension will be paid to Pugh or his
Surviving Spouse at the same time and in the same form as benefits are paid
under the VF Pension Plan, provided, however, that death or survivor benefits
upon the death of Pugh are payable only to his Surviving Spouse, if any.
5. Effective as of the date of this Agreement, Pugh
shall be fully vested in his Supplemental Pension under the SERP determined
pursuant to this Agreement.
6. Except as expressly provided in this Agreement, the
rights and obligations of the Company and Pugh with respect to the SERP shall
be governed by the provisions of the SERP. Capitalized terms not defined herein
shall have the meanings assigned thereto in the SERP and the VF Pension Plan.
7. Nothing contained herein shall be deemed to create a
trust or fund of any kind or create any fiduciary relationship between the
Company and Pugh, his Surviving Spouse or any other person. To the extent that
Pugh, his Surviving Spouse or any other person acquires a right to receive
payments from the Company under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of the Company.
8. Nothing contained herein shall be construed as
conferring upon Pugh the right to continue in the employ of the Company as an
executive or in any other capacity.
9. The sale of all or substantially all of the assets of
the Company, or the merger, consolidation or reorganization of the Company
wherein the Company is not the surviving corporation, or any other transaction
which, in effect, amounts to the sale of the Company or voting control thereof,
shall not terminate this Agreement and the obligations created hereunder shall
be binding upon the successors and assigns of the Company.
2
<PAGE> 3
10. The rights and obligations created hereunder shall be
binding on Pugh and his heirs and legal representatives and on the successors
and assigns of the Company.
11. This Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and Pugh has hereunto set his hand
and seal as of the date first above written.
VF CORPORATION
By: /s/ Harold E. Addis
-------------------------------------
Harold E. Addis,
Vice President - Human Resources &
Administration
/s/ L.R. Pugh
-------------------------------------
L.R. Pugh
3
<PAGE> 1
SECOND AMENDED SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND
RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Second Amended Supplemental Annual Benefit Determination
(the "Determination") is to provide to designated Participants a Supplemental
Pension under the VF Corporation Amended and Restated Supplemental Executive
Retirement Plan (the "SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP, the VF Corporation Pension Plan ("Pension Plan"), and those
agreements between the Corporation and certain Executives of the Corporation
providing for severance benefits upon employment termination in connection with
a "change in control" of the Corporation (the "Change in Control Agreements").
"Committee" shall mean the Organization and Compensation Committee of the Board
of Directors of VF Corporation.
ARTICLE III. ELIGIBILITY FOR BENEFITS
The Supplemental Pension shall be payable to the Participant if his employment
terminates by reason of: 1) retirement on his Normal Retirement Date, 2) Early
Retirement approved by the Committee, 3) involuntary termination without Cause,
4) termination for Good Reason following a change in control of the Corporation
or 5) death while an Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS
4.01 Normal Retirement: The Supplemental Pension payable
at Normal or Late Retirement shall be equal to:
(a) The Normal Retirement Benefit otherwise payable to
the Participant under the Pension Plan based upon 25
Years of Credit without reduction for any maximum
contribution, benefit or compensation limitations
imposed by ERISA or the Code on the Corporation and
including in the Normal Retirement Benefit
calculation any compensation deferred by Participant.
The Participant's "Average Annual Compensation" for
Supplemental Pension calculation purposes shall mean
the average of the highest
<PAGE> 2
three years of the full amount of the
Participant's salary and bonus compensation for the
five-year period preceding his Retirement Date.
(b) The Supplemental Pension set forth in Section 4.01(a)
shall be reduced by any benefits payable to the
Participant under all other qualified and
non-qualified retirement plans, including without
limitation the Pension Plan and the retirement
plan(s) of former employer(s). For this purpose,
"retirement plan" shall not include the VF
Corporation Tax-Advantaged Savings Plan or any other
savings or thrift plan of the Corporation or any
former employer(s).
4.02 Early Retirement: No Supplemental Pension shall be
payable with respect to a Participant's Early Retirement unless the Committee
approves benefit payments hereunder in connection with such Early Retirement.
If so approved, the Supplemental Pension payable at Early Retirement shall
commence at the Participant's Retirement Date and be equal to the benefit
provided by Section 4.01 above, multiplied by a fraction to reflect termination
of employment prior to Normal Retirement Date and further reduced to reflect
commencement of payments prior to age 65. The numerator of the pre-Normal
Retirement Date termination fraction shall be 26 less the number of full years
it would take for the Participant to reach or pass his Normal Retirement Date.
The denominator of this fraction shall be 25, except that the fraction shall
never exceed 1. The additional reduction for pre-age 65 commencement of
benefits shall be 1/150th for each month (up to 36 months) between ages 62 and
65 and 1/300th for each month (up to 84 months) between ages 55 and 62 by which
the commencement date of the Supplemental Pension precedes age 65.
4.03 Involuntary Termination without Cause: The
Supplemental Pension payable upon the Participant's involuntary termination
without Cause shall, without requiring approval by the Committee, be as
provided by Section 4.02.
4.04 Termination for Good Reason: The Supplemental
Pension payable upon the Participant's termination for Good Reason after a
change in control shall be as provided by Section 4.03.
4.05 Death while an Employee: The Supplemental Pension
payable upon the death of the Participant while an Employee shall be as
provided by Section 4.03.
4.06 Form of Supplemental Pension: The Supplemental
Pension will be paid to the Participant or his Surviving Spouse at
2
<PAGE> 3
the same time and in the same form as benefits are paid under the Pension Plan,
provided, however, that death or survivor benefits upon the death of the
Participant are payable only to his Surviving Spouse, if any. Notwithstanding
the foregoing, benefits payable pursuant to Section 4.03 ("involuntary
termination without Cause"), Section 4.04 ("termination for Good Reason") or
Section 4.05 ("death while an Employee") shall not commence prior to the
Participant's Normal Retirement Date except that, at his sole discretion, the
Participant or his Surviving Spouse, as applicable, may elect, in the event of
termination for Good Reason after a change in control or death while an
Employee, to receive in a lump sum the actuarial present value of the
Participant's Supplemental Pension under this Determination.
ARTICLE V. PARTICIPANTS
The Committee shall from time to time designate the Employees who shall be
Participants for purposes of this Determination by attaching hereto a Schedule
A (as amended or supplemented).
ARTICLE VI. VESTING
The Participant shall become vested in the Supplemental Pension payable
pursuant to this Determination upon satisfaction of the vesting period provided
in the SERP or, if applicable, as provided in Participant's Change in Control
Agreement, whichever is earlier. Nothing in this Determination shall preclude
the Board of Directors from making a Participant ineligible to participate in
the SERP and this Determination any time before the Participant shall become
vested hereunder.
ARTICLE VII. ADOPTION
This Amended Determination was approved and adopted by the Committee on
December 2, 1991, and the Committee's action was ratified by the Board of
Directors of the Corporation on December 3, 1991.
3
<PAGE> 4
SECOND SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
AMENDED SCHEDULE A
1. G. G. Johnson
2. H. E. Addis
3. F. J. Rowan
4. P. R. Charron
5. H. L. Hazlett
6. J. G. Johnson
7. R. R. Lindley
Date: October 15, 1991
<PAGE> 1
THIRD AMENDED SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND
RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Third Amended Supplemental Annual Benefit Determination
(the "Determination") is to provide to designated Participants a Supplemental
Pension under the VF Corporation Amended and Restated Supplemental Executive
Retirement Plan (the "SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP, the VF Corporation Pension Plan ("Pension Plan"), and those
agreements between the Corporation and certain Executives of the Corporation
providing for severance benefits upon employment termination in connection with
a "change in control" of the Corporation (the "Change in Control Agreements").
"Committee" shall mean the Organization and Compensation Committee of the Board
of Directors of VF Corporation.
ARTICLE III. ELIGIBILITY FOR BENEFITS
The Supplemental Pension shall be payable to the Participant if his employment
terminates by reason of: 1) retirement on his Normal Retirement Date, 2) Early
Retirement approved by the Committee, 3) involuntary termination without Cause,
4) termination for Good Reason following a change in control of the Corporation
or 5) death while an Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS
4.01 Normal Retirement: The Supplemental Pension payable
at Normal or Late Retirement shall be equal to the Supplemental Pension
determined under Section 2.01(a)(1) of the SERP, provided, however, that the
Participant's "Average Annual Compensation" for Supplemental Pension
calculation purposes shall mean the average of the highest three years of the
full amount of the Participant's salary and bonus compensation for the
five-year period preceding his Retirement Date.
4.02 Early Retirement: No Supplemental Pension shall be
payable with respect to a Participant's Early Retirement unless the Committee
approves benefit payments hereunder in connection with such Early Retirement.
If so approved, the Supplemental Pension
<PAGE> 2
payable at Early Retirement shall commence at the Participant's
Retirement Date and be equal to the benefit provided by Section 4.01 above,
multiplied by a fraction to reflect termination of employment prior to Normal
Retirement Date and further reduced to reflect commencement of payments prior
to age 65. The numerator of the pre-Normal Retirement Date termination
fraction shall be the number of full and part years of a Participant's
employment with Corporation. The denominator of this fraction shall be the
number of full and part years of the Participant's employment as if the
Participant had been employed until Normal Retirement Date. The additional
reduction for pre-age 65 commencement of benefits shall be 1/150th for each
month (up to 36 months) between ages 62 and 65 and 1/300th for each month (up
to 84 months) between ages 55 and 62 by which the commencement date of the
Supplemental Pension precedes age 65.
4.03 Involuntary Termination without Cause: The
Supplemental Pension payable upon the Participant's involuntary termination
without Cause shall, without requiring approval by the Committee, be the same
as that provided by Section 4.02.
4.04 Termination for Good Reason: The Supplemental
Pension payable upon the Participant's termination for Good Reason after a
change in control shall be as provided by Section 4.03.
4.05 Death while an Employee: The Supplemental Pension
payable upon the death of the Participant while an Employee shall be as
provided by Section 4.03.
4.06 Form of Supplemental Pension: The Supplemental
Pension will be paid to the Participant or his Surviving Spouse at the same
time and in the same form as benefits are paid under the Pension Plan,
provided, however, that death or survivor benefits upon the death of the
Participant are payable only to his Surviving Spouse, if any. Notwithstanding
the foregoing, benefits payable pursuant to Section 4.03 ("involuntary
termination without Cause"), Section 4.04 ("termination for Good Reason") or
Section 4.05 ("death while an Employee") shall not commence prior to the
Participant's Normal Retirement Date except that, at his sole discretion, the
Participant or his Surviving Spouse, as applicable, may elect, in the event of
termination for Good Reason after a change in control or death while an
Employee, to receive in a lump sum the actuarial present value of the
Participant's Supplemental Pension under this Determination.
ARTICLE V. PARTICIPANTS
The Committee shall from time to time designate the Employees who
2
<PAGE> 3
shall be Participants for purposes of this Determination by attaching hereto a
Schedule A (as amended or supplemented).
ARTICLE VI. VESTING
The Participant shall become vested in the Supplemental Pension payable
pursuant to this Determination upon satisfaction of the vesting period provided
in the SERP or, if applicable, as provided in Participant's Change in Control
Agreement, whichever is earlier. Nothing in this Determination shall preclude
the Board of Directors from making a Participant ineligible to participate in
the SERP and this Determination any time before the Participant shall become
vested hereunder.
ARTICLE VII. ADOPTION
This Amended Determination was approved and adopted by the Committee on
December 2, 1991, and the Committee's action was ratified by the Board of
Directors of the Corporation on December 3, 1991.
3
<PAGE> 4
THIRD AMENDED SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
AMENDED SCHEDULE A
1. H. D. McKemy
2. L. M. Tarnoski
Date of Amendment: December 2, 1991
<PAGE> 1
FOURTH SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND
RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Fourth Supplemental Annual Benefit Determination (the
"Determination") is to provide to designated Participants a Supplemental
Pension under the VF Corporation Amended and Restated Supplemental Executive
Retirement Plan (the "SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP, the VF Corporation Pension Plan ("Pension Plan"), and the VF
Corporation Deferred Compensation Plan (the "Deferred Compensation Plan").
"Committee" shall mean the Organization and Compensation Committee of the Board
of Directors of VF Corporation.
ARTICLE III. ELIGIBILITY FOR BENEFITS
The Supplemental Pension shall be payable to the Participant if his employment
terminates by reason of: 1) retirement on his Normal Retirement Date, 2)
termination of employment or 3) death while an Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS
4.01 NORMAL RETIREMENT: The Participants in this
Determination shall receive the following Supplemental Pension payable at
Normal or Late Retirement:
(a) The Normal Retirement Benefit otherwise payable to
the Participant under the Pension Plan computed
without reduction for any compensation deferred by
the Participant under the Deferred Compensation Plan.
(b) The Supplemental Pension set forth in Section 4.01(a)
shall be reduced by any benefits payable to the
Participant under the Pension Plan.
4.02 TERMINATION OF EMPLOYMENT: The Supplemental Pension
payable by reason of the Participant's termination of employment shall be equal
to the benefit provided by Section 4.01 above
<PAGE> 2
multiplied by a fraction. The numerator of this fraction shall be the
number of full and part years of the Participant's employment with the
Corporation. The denominator of this fraction shall be the number of full and
part years of the Participant's employment as if the Participant had been
employed until Normal Retirement Date.
4.03 DEATH WHILE AN EMPLOYEE: The Supplemental Pension
payable upon the death of the Participant while an Employee shall be as
provided by Section 4.02.
4.04 FORM OF SUPPLEMENTAL PENSION: The form of benefits
payable to the Participant shall be the form which has been elected under the
Pension Plan unless the Participant or Beneficiary has elected a different form
under this Determination. Payment of Supplemental Pension benefits hereunder
shall commence at the same time as the Participant's or Beneficiary's benefits
commence under the Pension Plan, and shall be subject to the same reductions
for commencement of payments prior to Normal Retirement Date as apply to the
recipient's benefits under the Pension Plan. Notwithstanding the foregoing, if
a Participant dies while employed, his or her Beneficiary may elect to receive
in a lump sum the actuarial present value (determined pursuant to the
assumptions set forth in the Pension Plan) of the Participant's Supplemental
Pension under this Determination.
ARTICLE V. PARTICIPANTS
The Committee designates as Participants for purposes of this Determination any
Employees who participated at any time in the Deferred Compensation Plan,
provided, however, that any Employees who have been designated in any other
SERP Determination shall be excluded from this Determination to the extent that
such other Determination provides for the Supplemental Pension set forth above.
ARTICLE VI. VESTING
The Participant shall become vested in the Supplemental Pension payable
pursuant to this Determination upon satisfaction of the vesting period provided
in the SERP. Nothing in this Determination shall preclude the Board of
Directors from discontinuing eligibility to participate in the SERP and this
Determination at any time before the Participant shall become vested hereunder.
2
<PAGE> 3
ARTICLE VII. ADOPTION
This Determination was approved and adopted by the Board of Directors of the
Corporation on February 13, 1990, to be effective as of January 1, 1985.
3
<PAGE> 1
FIFTH SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Fifth Supplemental Annual Benefit Determination (the
"Determination") is to provide security for the payment of the Supplemental
Pensions of certain designated Participants under the VF Corporation Amended
and Restated Supplemental Executive Retirement Plan and the Determinations
thereunder (collectively, the "SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP, the VF Corporation Pension Plan ("Pension Plan"), the VF Executive
Deferred Savings Plan ("Executive Deferred Savings Plan") and those agreements
between VF Corporation ("Corporation") and certain Executives of the
Corporation providing for severance benefits upon employment termination in
connection with a "change in control" of the Corporation (the "Change in
Control Agreements"). "Committee" shall mean the Organization and Compensation
Committee of the Board of Directors of the Corporation.
ARTICLE III. SECURING PAYMENT OF THE SUPPLEMENTAL PENSION
The Corporation shall, immediately upon and at all times following the
occurrence of a change in control of the Corporation (as defined in Paragraph 2
of the Participant's Change in Control Agreement and/or Section I-4 of the
Executive Deferred Savings Plan), either provide security for or fund the
payment of the Supplemental Pensions described in the First, Second, Third and
Seventh Supplemental Annual Benefit Determinations. The Corporation shall be
obligated to fund or secure such Supplemental Pension Benefits in all events
and, if possible, the security or funding shall be made in a form that will not
cause such amounts to be includable in the Participant's gross income for
federal income tax purposes until the taxable year or years in which such
amounts are paid to the Participant under the terms of the SERP (e.g., a
standby letter of credit, funded irrevocable trust, etc.). The Corporation may
cease to provide the security or funding required hereunder with respect to a
Participant upon the occurrence of either of the following: (1) the
Participant shall have been paid his Supplemental Pension in full or (2) the
Board of Directors of
<PAGE> 2
the Corporation shall have adopted a resolution declaring the change in
control ineffective as provided in Paragraph 2 of the Participant's Change in
Control Agreement and/or Section I-4 of the Executive Deferred Savings Plan.
ARTICLE IV. ELECTION TO RECEIVE SUPPLEMENTAL PENSION BENEFIT IN A LUMP SUM
AFTER A CHANGE IN CONTROL
Following the occurrence of a change in control of the Corporation, each
Participant who is eligible to receive a Supplemental Pension under the First,
Second, Third or Seventh Supplemental Annual Benefit Determination (or such
Participant's Beneficiary(ies), if applicable) shall be entitled to elect to
receive the actuarial present value of such Participant's Supplemental Pension
in a lump sum payment payable 5 days from the date such written election is
mailed to the Corporation's secretary. The following assumptions shall be used
in calculating any such lump sum payment:
(a) An interest rate of 6%, and
(b) A life expectancy equal to the difference between (1)
85 and (2) the Participant's whole number age at the time of Participant's
termination of employment.
ARTICLE V. PARTICIPANTS
The Committee designates as a Participant for purposes of this Determination
any Executive who is a Participant under the First, Second, Third or Seventh
Supplemental Annual Benefit Determination.
ARTICLE VI. ADOPTION
This Determination was approved and adopted by the Board of Directors of the
Corporation on February 13, 1990, and amended by the Corporation on August 17,
1993, effective as of February 1, 1992, as authorized by the Board of Directors
on December 3, 1991.
2
<PAGE> 1
SEVENTH SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Seventh Supplemental Annual Benefit Determination (the
"Determination") is to provide to designated Participants a Supplemental
Pension under the VF Corporation Amended and Restated Supplemental Executive
Retirement Plan (the "SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP, the VF Corporation Pension Plan ("Pension Plan"), and the VF
Executive Deferred Savings Plan (the "Executive Deferred Savings Plan").
"Committee" shall mean the Organization and Compensation Committee of the Board
of Directors of VF Corporation.
ARTICLE III. ELIGIBILITY FOR BENEFITS
The Supplemental Pension shall be payable to the Participant if his employment
terminates by reason of: 1) retirement on his Normal Retirement Date, 2)
termination of employment or 3) death while an Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS
4.01 NORMAL RETIREMENT: The Participants in this
Determination shall receive the following Supplemental Pension payable at
Normal or Late Retirement:
(a) The Normal Retirement Benefit otherwise payable to
the Participant under the Pension Plan computed
without reduction for any compensation deferred by
the Participant under the Executive Deferred Savings
Plan.
(b) The Supplemental Pension set forth in Section 4.01(a)
shall be reduced by any benefits payable to the
Participant under the Pension Plan.
4.02 TERMINATION OF EMPLOYMENT: The Supplemental Pension
payable by reason of the Participant's termination of employment shall be equal
to the benefit provided by Section 4.01 above
<PAGE> 2
multiplied by a fraction. The numerator of this fraction shall be the
number of full and part years of the Participant's employment with the
Corporation. The denominator of this fraction shall be the number of full and
part years of the Participant's employment as if the Participant had been
employed until Normal Retirement Date.
4.03 DEATH WHILE AN EMPLOYEE: The Supplemental Pension
payable upon the death of the Participant while an Employee shall be as
provided by Section 4.02.
4.04 FORM OF SUPPLEMENTAL PENSION: The form of benefits
payable to the Participant shall be the form which has been elected under the
Pension Plan unless the Participant or Beneficiary has elected a different form
under this Determination. Payment of Supplemental Pension benefits hereunder
shall commence at the same time as the Participant's or Beneficiary's benefits
commence under the Pension Plan, and shall be subject to the same reductions
for commencement of payments prior to Normal Retirement Date as apply to the
recipient's benefits under the Pension Plan. Notwithstanding the foregoing, if
a Participant dies while employed, his or her Beneficiary may elect to receive
in a lump sum the actuarial present value (determined pursuant to the
assumptions set forth in the Pension Plan) of the Participant's Supplemental
Pension under this Determination.
ARTICLE V. PARTICIPANTS
The Committee designates as Participants for purposes of this Determination any
Employees who participated at any time in the Executive Deferred Savings Plan,
provided, however that any Employees who have been designated in any other SERP
Determination shall be excluded from this Determination to the extent that such
other Determination provides for the Supplemental Pension set forth above.
ARTICLE VI. VESTING
The Participant shall become vested in the Supplemental Pension payable
pursuant to this Determination upon satisfaction of the vesting period provided
in the SERP. Nothing in this Determination shall preclude the Board of
Directors from discontinuing eligibility to participate in the SERP and this
Determination at any time before the Participant shall become vested hereunder.
2
<PAGE> 3
ARTICLE VII. ADOPTION
This Determination was approved and adopted by the Corporation on August 17,
1993, effective as of February 1, 1992, as authorized by the Board of Directors
on December 3, 1991.
3
<PAGE> 1
EIGHTH SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
PURSUANT TO THE VF CORPORATION AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Eighth Supplemental Annual Benefit Determination (the
"Determination") is to provide to designated Participants a Supplemental
Pension under the VF Corporation Amended and Restated Supplemental Executive
Retirement Plan (the "SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP and the VF Corporation Pension Plan ("Pension Plan"). "Committee"
shall mean the Organization and Compensation Committee of the Board of
Directors of VF Corporation.
ARTICLE III. ELIGIBILITY FOR BENEFITS
The Supplemental Pension shall be payable to the Participant if his employment
terminates by reason of: 1) retirement on his Normal Retirement Date, 2)
retirement on his Early or Disability Retirement Date or 3) death while an
Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS
4.01 NORMAL RETIREMENT: The Participants in this
Determination shall receive the following Supplemental Pension payable at
Normal or Late Retirement:
(a) The Normal Retirement Benefit otherwise payable to
the Participant under the Pension Plan computed
without application of the annual compensation
limitation imposed under Section 401(a)(17) of the
Internal Revenue Code of 1986, as amended (the
"Code"), or any successor section thereto, which
limits the amount of a Participant's annual
compensation used in determining his benefits under
the Pension Plan.
(b) The Supplemental Pension set forth in Section 4.01(a)
shall be reduced by any benefits payable to the
Participant under the Pension Plan.
<PAGE> 2
4.02 EARLY OR DISABILITY RETIREMENT: The Supplemental
Pension payable by reason of the Participant's Early or Disability Retirement
shall be equal to the benefit provided by Section 4.01 above multiplied by a
fraction. The numerator of this fraction shall be the number of full and part
years of the Participant's employment with the Corporation. The denominator of
this fraction shall be the number of full and part years of the Participant's
employment as if the Participant had been employed until Normal Retirement
Date.
4.03 DEATH WHILE AN EMPLOYEE: The Supplemental Pension
payable upon the death of the Participant while an Employee shall be as
provided by Section 4.02.
4.04 FORM OF SUPPLEMENTAL PENSION: The form of
benefits payable to the Participant shall be the form which has been elected
under the Pension Plan unless the Participant or Beneficiary has elected a
different form under this Determination. Payment of Supplemental Pension
benefits hereunder shall commence at the same time as the Participant's or
Beneficiary's benefits commence under the Pension Plan, and shall be subject to
the same reductions for commencement of payments prior to Normal Retirement
Date as apply to the recipient's benefits under the Pension Plan.
Notwithstanding the foregoing, if a Participant dies while employed, his
Beneficiary may elect to receive in a lump sum the actuarial present value
(determined pursuant to the assumptions set forth in the Pension Plan) of the
Participant's Supplemental Pension under this Determination.
ARTICLE V. PARTICIPANTS
The Committee designates as Participants, for purposes of this Determination,
any Employee who loses retirement benefits under the Pension Plan because of
the Code Section 401(a)(17) limitation on the amount of annual compensation
permitted to be used in calculating Pension Plan benefits and whose termination
of employment is by reason of 1) retirement on his Normal Retirement Date, 2)
retirement on his Early or Disability Retirement Date or 3) death while an
Employee; provided, however, that any Employee otherwise designated hereunder
shall be excluded from participating in this Determination to the extent that
he participates in another SERP Determination that provides for the same
Supplemental Pension set forth herein.
ARTICLE VI. VESTING
The Participant shall become vested in the Supplemental Pension
2
<PAGE> 3
payable pursuant to this Determination upon his termination of employment by
reason of 1) retirement on his Normal Retirement Date, 2) retirement on his
Early or Disability Retirement Date or 3) death while an Employee. Nothing in
this Determination shall preclude the Board of Directors from discontinuing
eligibility to participate in the SERP and this Determination at any time
before the Participant shall become vested hereunder.
ARTICLE VII. ADOPTION
This Determination was approved and adopted by the Corporation on August 17,
1993, effective as of January 1, 1989, as authorized by the Board of Directors
on May 16, 1989.
3
<PAGE> 1
$750,000,000
CREDIT AGREEMENT
dated as of
October 20, 1994
among
V.F. Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.03 Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.02 Notice of Committed Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.03 Money Market Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.04 Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.06 Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.07 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.08 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.09 Optional Termination or
Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Method of Electing Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.11 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.12 General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.13 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.14 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.02 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
----------------------------------
</TABLE>
*The Table of Contents is not a part of this Agreement.
i
<PAGE> 3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
<TABLE>
<S> <C>
SECTION 4.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.02 Corporate and Governmental
Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.03 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.04 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.06 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.07 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.09 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.10 Not an Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.11 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE V
COVENANTS
SECTION 5.01 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.02 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.03 Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.04 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.05 Consolidations, Mergers and Sales
of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.06 Limitation on Subsidiary Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.07 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.08 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.09 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.02 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
</TABLE>
ii
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<TABLE>
<CAPTION>
Page
----
ARTICLE VII
THE AGENT
<S> <C>
SECTION 7.01 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.02 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.03 Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.04 Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.05 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.07 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.08 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.09 Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.03 Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.06 Substitution of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.02 No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.03 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.04 Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.05 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.06 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.07 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.08 Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.09 Counterparts; Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.10 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
iii
<PAGE> 5
Schedule I - Litigation
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the
Agent
Exhibit G - Assignment and Assumption Agreement
iv
<PAGE> 6
CREDIT AGREEMENT
AGREEMENT dated as of October 20, 1994 among V.F. CORPORATION, the
BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth
in Section 2.07(c).
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means, with reference to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such first Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
<PAGE> 7
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the
case of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means V.F. Corporation, a Pennsylvania corporation, and
its successors.
"Borrower's 1993 Form 10-K" means the Borrower's annual report on
Form 10-K for its fiscal year ended January 1, 1994, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means (i) a Committed Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Committed Borrowing or Notice
of Interest Rate Election
2
<PAGE> 8
or (ii) an overdue amount which was a CD Loan immediately before it became
overdue.
"CD Margin" has the meaning set forth in Section 2.07(b).
"CD Rate" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01; provided that if any such Loan or Loans are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term "Committed Loan" shall
refer to the combined principal amount resulting from such combination or to
each of the separate principal amounts resulting from such subdivision, as the
case may be.
"Consolidated Debt" means at any date the sum of (i) the Debt of
the Borrower and its Subsidiaries, determined on a consolidated basis as of
such date, plus (ii) the product obtained by multiplying five times the
aggregate minimum rental commitments of the Borrower and its Subsidiaries under
leases of real and personal property (other than (A) capital leases and (B)
leases with remaining terms (assuming exercise by the lessee of any
cancellation option) of less than one year) in effect on such date for the
period from such date to and including the first anniversary of such date.
"Consolidated Net Income" means for any period the amount of
consolidated net income (or loss) of the Borrower and its Subsidiaries for such
period.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Subsidiaries, determined as of
such date.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
required to
3
<PAGE> 9
be capitalized in accordance with generally accepted accounting principles, (v)
all Debt secured by a Lien on any asset of such Person, whether or not such
Debt is otherwise an obligation of such Person, and (vi) all Debt of others
Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products,
4
<PAGE> 10
chemicals or industrial, toxic or hazardous substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or Affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or Affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan to be made by a Bank
as a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan before it became overdue.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of an Adjusted London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreements" means the respective $250,000,000 and
$500,000,000 Credit Agreements, each dated as of October 21, 1993, among the
Borrower, the banks parties thereto and Morgan Guaranty Trust Company of New
York, as agent, as amended to the Effective Date.
5
<PAGE> 11
"Facility Fee Rate" means a rate per annum of (i) .10% for any
day on which Level I Status exists, (ii) .12% for any day on which Level II
Status exists, (iii) .14% for any day on which Level III Status exists, (iv)
.175% for any day on which Level IV Status exists and (v) .25% for any day on
which Level V Status exists.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions as determined by the
Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group of Loans" means at any time a group of Loans consisting of
(i) all Committed Loans which are Base Rate Loans at such time or (ii) all
Committed Loans which are Fixed Rate Loans of the same type having the same
Interest Period at such time; provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Section
8.02 or 8.04, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the
6
<PAGE> 12
purpose of assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the
applicable Notice of Borrowing or the date specified in the applicable Notice
of Interest Rate Election and ending one, two, three, six or (subject to
Section 2.07(d)) nine or twelve months thereafter, as the Borrower may elect in
the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Loan, the period commencing on the date of such
borrowing specified in the applicable Notice of Borrowing or the date specified
in the applicable Notice of Interest Rate Election and ending 30, 60, 90 or 180
days thereafter, as the Borrower may elect in the applicable notice; provided
that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
7
<PAGE> 13
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
such whole number of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than seven
days) as the Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, all of the
Borrower's outstanding senior unsecured debt securities rated by S&P or Moody's
are rated A or
8
<PAGE> 14
higher by S&P or A2 or higher by Moody's, as the case may be.
"Level II Status" exists at any date if, at such date, (i) Level I
Status does not exist and (ii) all of the Borrower's outstanding senior
unsecured debt securities rated by S&P or Moody's are rated A- or higher by S&P
or A3 or higher by Moody's, as the case may be.
"Level III Status" exists at any date if, at such date, (i) Level
I Status and Level II Status do not exist and (ii) all of the Borrower's
outstanding senior unsecured debt securities rated by S&P or Moody's are rated
BBB+ or higher by S&P or Baa1 or higher by Moody's, as the case may be.
"Level IV Status" exists at any date if, at such date, (i) Level I
Status, Level II Status and Level III Status do not exist and (ii) all of the
Borrower's outstanding senior unsecured debt securities rated by S&P or Moody's
are rated BBB or higher by S&P or Baa2 or higher by Moody's, as the case may
be.
"Level V Status" exists at any date if, at such date, all of the
Borrower's outstanding senior unsecured debt securities rated by S&P or Moody's
are rated below BBB by S&P and below Baa2 by Moody's or are not rated by S&P or
Moody's, as the case may be.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
9
<PAGE> 15
"Material Debt" means Debt of the Borrower and/or one or more of
its Subsidiaries (other than the Notes), arising in one or more related or
unrelated transactions, in an aggregate principal amount exceeding $50,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
"Material Subsidiary" means at any time a Subsidiary which as of
such time meets the definition of a "significant subsidiary" contained as of
the date hereof in Regulation S-X of the Securities and Exchange Commission.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or Affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by notice
to the Borrower and the Agent designate separate Money Market Lending Offices
for its Money Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all references herein to
the Money Market Lending Office of such Bank shall be deemed to refer to either
or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc., a Delaware
corporation, and its successors or, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency,
10
<PAGE> 16
"Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Required Banks, with the approval of
the Borrower, by notice to the Agent and the Borrower.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, as the same may be amended, replaced,
supplemented or modified, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any time
within the preceding five years been maintained, or contributed to, by any
Person
11
<PAGE> 17
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Reference Banks" means PNC Bank, N.A., Credit Suisse and Morgan
Guaranty Trust Company of New York.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 66 2/3%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 66 2/3% of the aggregate
unpaid principal amount of the Loans.
"Revolving Credit Period" means the period from and including the
Effective Date to but excluding the Termination Date.
"S&P" means Standard & Poor's Corporation, a New York corporation,
and its successors or, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "S&P"
shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Required Banks, with the approval of the Borrower, by
notice to the Agent and the Borrower.
"Significant Assets" means any assets (including, without
limitation, capital stock issued by a Subsidiary or other Person) sold, leased
or otherwise transferred by the Borrower or any Subsidiary other than (i)
inventory and used, surplus or worn-out equipment sold in the ordinary course
of business, (ii) accounts receivable having an aggregate unpaid balance at no
time exceeding $250,000,000 sold pursuant to arrangements whereby recourse to
the Borrower or a Subsidiary for uncollectibility thereof is limited to an
amount not exceeding 10% of the face amount of any sale and (iii) other assets
having an aggregate book value during the term of this Agreement not exceeding
$500,000,000, provided that at no time shall the aggregate unpaid balance at
the time of accounts receivable sold pursuant to clause (ii) plus the aggregate
net book value of assets sold pursuant to clause (iii) exceed $500,000,000.
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"Significant Subsidiary" means at any time any Subsidiary, except
Subsidiaries which at such time have been designated by the Borrower (by notice
to the Agent, which may be amended from time to time) as nonmaterial and which,
if aggregated and considered as a single subsidiary, would not meet the
definition of a "significant subsidiary" contained as of the date hereof in
Regulation S-X of the Securities and Exchange Commission.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower;
provided that for the purpose of determining compliance with Section 4.02,
4.05, 4.07, 4.08, 5.04, 5.06, 5.08, 5.09, 5.10, 6.01(e), 6.01(f), 6.01(g),
6.01(h) or 6.01(j), none of Central Corsetera S.A. (Belcor), Blue Bell Italiana
s.r.l., Blue Bell S.A., Blue Bell Espana S.A. or Blue Bell Cote d'Ivoire shall
be considered to be a Subsidiary.
"Termination Date" means October 20, 1999, or, if such day is not
a Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case
the Termination Date shall be the next preceding Euro-Dollar Business Day.
"Trust" means the respective trusts established under those
certain deeds of trust dated August 21, 1951 made by John E. Barbey and under
the will of John E. Barbey, deceased.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary all of the shares
of capital stock or other ownership interests of which (except directors'
qualifying shares and, in the case of any Subsidiary organized in a
jurisdiction outside the United States, shares not exceeding 5% of total
shares)
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are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Subsidiaries
delivered to the Banks; provided that, if the Borrower notifies the Agent that
the Borrower wishes to amend any covenant in Article V to eliminate the effect
of any change in generally accepted accounting principles on the operation of
such covenant (or if the Agent notifies the Borrower that the Required Banks
wish to amend Article V for such purpose), then the Borrower's compliance with
such covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on a single date, all of which Loans are of the same
type (subject to Article VIII) and, except in the case of Base Rate Loans, have
the same Interest Period or initial Interest Period. Borrowings are classified
for purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of
their bids in accordance therewith).
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ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit
Period each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Borrower pursuant to this Section from
time to time in amounts such that the aggregate principal amount of Committed
Loans by such Bank at any one time outstanding shall not exceed the amount of
its Commitment. Each Borrowing under this Section shall be in an aggregate
principal amount of $15,000,000 or any larger multiple of $1,000,000 (except
that any such Borrowing may be in the aggregate amount available in accordance
with Section 3.02(b)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the foregoing limits, the
Borrower may borrow under this Section, repay, or to the extent permitted by
Section 2.11, prepay Loans and reborrow at any time during the Revolving Credit
Period under this Section.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than (x)
12:00 Noon (New York City time) on the date of each Base Rate Borrowing, (y)
1:00 P.M. (New York City time) on the second Domestic Business Day before each
CD Borrowing and (z) 1:00 P.M. (New York City time) on the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business
Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or at a CD Rate or a Euro-Dollar Rate,
and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
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SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks during the Revolving Credit Period to make offers to make
Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later
than 1:00 P.M. (New York City time) on (x) the fourth Euro-Dollar Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$15,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
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(c) Invitation for Money Market Quotes. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance
with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection (d) and
must be submitted to the Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 not later than 9:00 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction, or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective); provided that Money Market Quotes submitted by
the Agent (or any Affiliate of the Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Agent or such Affiliate notifies
the Borrower of the terms of the offer or offers contained therein not later
than 15 minutes prior to the deadline for the other Banks. Subject to Articles
III and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x) must be $5,000,000 or a
larger multiple of $1,000,000, (y) may not exceed the principal amount of
Money Market Loans for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
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of Money Market Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or
does not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. Not later than 9:30 A.M. (New York City
time) on the date received in accordance with subsection (d), the Agent shall
notify the Borrower of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The Agent's notice to the
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Borrower shall specify (A) the aggregate principal amount of Money Market Loans
for which offers have been received for each Interest Period specified in the
related Money Market Quote Request, (B) the respective principal amounts and
Money Market Margins or Money Market Absolute Rates, as the case may be, so
offered and (C) if applicable, limitations on the aggregate principal amount of
Money Market Loans for which offers in any single Money Market Quote may be
accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually
agreed and shall have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction
for which such change is to be effective), the Borrower shall notify the Agent
of its acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$15,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case
may be, provided that the Borrower may reject any offer made by a Bank
which has been paid or has made demand for payment of any Taxes or Other
Taxes pursuant to Section 8.04, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a
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greater aggregate principal amount than the amount in respect of which such
offers are accepted for the related Interest Period, the principal amount of
Money Market Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts
of Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing other than a Base Rate Borrowing, and 2:00 P.M. (New York City
time) on the date of each Base Rate Borrowing, each Bank participating therein
shall (except as provided in subsection (c) of this Section) make available its
share of such Borrowing, in Federal or other funds immediately available in New
York City, to the Agent at its address referred to in Section 9.01. Unless the
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (b), or remitted by the Borrower to the
Agent as provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior
to the date of any Borrowing that such Bank will not make available to the
Agent such Bank's share of such Borrowing, the Agent may assume that such Bank
has made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
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shall not have so made such share available to the Agent, such Bank and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable
thereto pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal
Funds Rate; provided that the Borrower may exercise any other legal rights
against such Bank. If such Bank shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in
such Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b),
the Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount and type of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any
Borrowing made pursuant to Section 2.01
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shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the Termination Date. Each Loan
included in any Borrowing made pursuant to Section 2.03 shall mature, and the
principal amount thereof shall be due and payable, together with accrued
interest thereon, on the last day of the Interest Period applicable thereto.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable quarterly in
arrears on the last day of each calendar quarter and, with respect to the
principal amount of any Base Rate Loan converted to a CD Loan or a Euro-Dollar
Loan, on each date a Base Rate Loan is so converted. Any overdue principal of
or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 1% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at
a rate per annum equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan shall, as a result of clause (2)(b) of the definition of Interest Period,
have an Interest Period of less than 30 days, such CD Loan shall bear interest
during such Interest Period at the rate applicable to Base Rate Loans during
such period. Such interest shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than 90 days, at
intervals of 90 days after the first day thereof. Any overdue principal of or
interest on any CD Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 1% plus the higher of (i)
the sum of the CD Margin plus the Adjusted CD Rate applicable to such Loan at
the date such payment was due and (ii) the rate applicable to Base Rate Loans
for such day.
"CD Margin" means for each day on which (i) Level I Status exists,
.275%, (ii) Level II Status exists, .325%, (iii) Level III Status exists,
.385%, (iv) Level IV Status exists, .45% or (v) Level V Status exists, .50%.
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
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[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upwards, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from each
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(e) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
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United States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for
such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means for each day on which (i) Level I
Status exists, .15%, (ii) Level II Status exists, .20%, (iii) Level III Status
exists, .26%, (iv) Level IV Status exists, .325% or (v) Level V Status exists,
.375%.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to each of the
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which
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includes loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) If requested to do so by the Borrower, through the Agent, at
least four Euro-Dollar Business Days before the beginning of any Interest
Period applicable to a Euro-Dollar Borrowing, each Bank will advise the
Borrower, through the Agent, before 1:00 P.M. (New York City time) three
Euro-Dollar Business Days preceding the beginning of such Interest Period as to
(i) whether, if the Borrower selects a duration of nine or twelve months for
such Interest Period, such Bank expects that deposits in dollars with a term
corresponding to such Interest Period will be available to it in the London
interbank market two Euro-Dollar Business Days preceding such Interest Period
in the amount required to fund its Euro-Dollar Loan to which such Interest
Period would apply and, if so, (ii) the interest rate which such Bank would
have been required to pay as of 11:00 A.M. (London time) on such third
Euro-Dollar Business Day to obtain such deposits. If, but only if, all of the
Banks confirm that they expect such deposits to be available to them, the
Borrower shall be entitled to select a duration of nine or twelve months for
such Interest Period pursuant to Section 2.02(a), in which event (i) each Bank
shall advise the Agent as to the interest rate per annum at which such deposits
were offered to it as approximately 11:00 A.M. (London time) in the London
interbank market two Euro-Dollar Business Days preceding such Interest Period
and (ii) the London Interbank Offered Rate applicable to such Interest Period
shall be the highest of the rates so quoted; provided that, as an alternative
to the foregoing procedure, the London Interbank Offered Rate applicable to any
nine or twelve month Interest Period may be established by agreement among the
Borrower and all the Banks.
(e) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 1% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable
to such Loan at the date such payment was due and (ii) the Euro-Dollar Margin
plus the quotient obtained (rounded upwards, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which one day (or,
if such amount due remains unpaid more than three
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Euro-Dollar Business Days, then for such other period of time not longer than
six months as the Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Reference Banks
are offered to such Reference Bank in the London interbank market for the
applicable period determined as provided above by (y) 1.00 minus the
Euro-Dollar Reserve Percentage (or, if the circumstances described in clause
(a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of
1% plus the rate applicable to Base Rate Loans for such day).
(f) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each
Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the Money Market Absolute Rate quoted by the Bank making
such Loan in accordance with Section 2.03. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Any overdue principal of or interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 1% plus the Base Rate for such day.
(g) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(h) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available
on a timely basis, the provisions of Section 8.01 shall apply.
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SECTION 2.08. Facility Fee. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate.
Such facility fee shall accrue (i) from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the
Commitments (whether used or unused) and (ii) from and including the
Termination Date or such earlier date of termination to but excluding the date
the Loans shall be repaid in their entirety, on the daily aggregate outstanding
principal amount of the Loans. Accrued facility fees shall be payable
quarterly on each March 31, June 30, September 30 and December 31 and upon the
date of termination of the Commitments in their entirety (and, if later, the
date the Loans shall be repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments.
During the Revolving Credit Period, the Borrower may, upon three Domestic
Business Days' notice to the Agent (or such shorter period as the Agent may
accept), (i) terminate the Commitments at any time, if no Loans (other than
Money Market Loans which will mature within three months of the date of such
termination) are outstanding at such time, or (ii) ratably reduce from time to
time by an aggregate amount of $15,000,000 or any larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
SECTION 2.10. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the type
of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in
each case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to convert
such Loans to Base Rate Loans or Euro-Dollar Loans or elect to continue
such Loans as CD Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period applicable to
such Loans;
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(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or CD Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period, in each
case effective on the last day of the then current Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before
the conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans to Domestic
Loans of the other type or continued as Domestic Loans of the same type for an
additional Interest Period, in which case such notice shall be delivered to the
Agent at least three Domestic Business Days before such conversion or
continuation is to be effective). A Notice of Interest Rate Election may, if
it so specifies, apply to only a portion of the aggregate principal amount of
the relevant Group of Loans; provided that (i) such portion is allocated
ratably among the Loans comprising such Group and (ii) the portion to which
such Notice applies, and the remaining portion to which it does not apply, are
each $15,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if such new Loans are Fixed Rate Loans, the duration
of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above,
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the Agent shall promptly notify each Bank of the contents thereof and such
notice shall not thereafter be revocable by the Borrower. If the Borrower
fails to deliver a timely Notice of Interest Rate Election to the Agent for any
Group of Fixed Rate Loans, such Loans shall be converted into Base Rate Loans
on the last day of the then current Interest Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
at least one Domestic Business Day's notice to the Agent, prepay the Group of
Base Rate Loans (or any Money Market Borrowing bearing interest at the Base
Rate pursuant to Section 8.01(a)) in whole at any time, or from time to time in
part in amounts aggregating $15,000,000 or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment.
(b) The Borrower may, upon at least three Domestic Business Days'
notice to the Agent, in the case of a Group of CD Loans, or upon at least three
Euro-Dollar Business Days' notice to the Agent, in the case of a Group of
Euro-Dollar Loans, prepay the Loans comprising such a Group on the last day of
any Interest Period applicable to such Group, in whole at any time, or from
time to time in part in amounts aggregating $15,000,000 or any larger multiple
of $1,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment.
(c) Except as provided in subsection (a) above, the Borrower may
not prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several Banks included in
the relevant Group or Borrowing.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (New York City time) on the
date when due, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its
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ratable share of each such payment received by the Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Domestic
Loans or of fees shall be due on a day which is not a Domestic Business Day,
the date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes or causes to
be made any payment of principal with respect to any Fixed Rate Loan or any
Fixed Rate Loan is converted to a Base Rate Loan (pursuant to Article VI or
VIII or otherwise) on any day other than the last day of an Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(e), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section
2.04(a) or 2.11(d), the Borrower shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
conversion
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or failure to borrow or prepay, provided that such Bank shall have delivered to
the Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding
the last day).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of facsimile transmission, telegraphic, telex or other
written confirmation from such party of execution of a counterpart hereof
by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of Clark, Ladner,
Fortenbaugh & Young, counsel for the Borrower, substantially in the form of
Exhibit E hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F
hereto and covering such additional matters relating to the
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transactions contemplated hereby as the Required Banks may reasonably
request;
(e) receipt by the Agent of a certificate signed by the chief
financial officer, chief accounting officer or the treasurer of the
Borrower, dated the Effective Date, to the effect set forth in clause (f)
of this Section 3.01 and clauses (c) and (d) of Section 3.02;
(f) the fact that all principal of and interest on any loans
outstanding under, and all accrued fees payable under, the Existing Credit
Agreements shall have been paid in full on or prior to the Effective Date;
and
(g) receipt by the Agent of all documents it may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than October 31, 1994. The Agent shall promptly notify the Borrower and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto. The Banks that are parties to the Existing Credit
Agreements, comprising the "Required Banks" as defined therein, and the
Borrower agree that the commitments under the Existing Credit Agreements shall
terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the Borrower shall be obligated to pay
the accrued facility fees thereunder to but excluding the date of such
effectiveness.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately before and after such Borrowing,
the aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
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(c) the fact that, immediately after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the date of
such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Pennsylvania, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance with
its terms.
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SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as of January 1, 1994 and the related consolidated statements of
earnings, retained earnings and cash flow for the fiscal year then ended,
reported on by Ernst & Young and set forth in the Borrower's 1993 Form 10-K, a
copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Subsidiaries as of such date and
their consolidated results of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as of July 2, 1994 and the related unaudited consolidated
statements of earnings, retained earnings and cash flow for the six months then
ended, set forth in the Borrower's quarterly report for the fiscal quarter
ended July 2, 1994 as filed with the Securities and Exchange Commission on Form
10-Q, a copy of which has been delivered to each of the Banks, fairly present,
in conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and its
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six-month period (subject to normal year-end adjustments).
(c) Since July 2, 1994 there has been no material adverse change
in the business, financial position, results of operations or prospects of the
Borrower and its Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. Except as specified in Schedule I
hereto, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and
its Subsidiaries, considered as a whole, or which in any manner draws into
question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue
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Code with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Internal Revenue Code
with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code in respect of any Plan, (ii) failed to make any contribution or
payment to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement, or made any amendment to any Plan or Benefit Arrangement, which
has resulted or could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of
its business, the Borrower conducts periodic reviews, which it considers
prudent and reasonable in light of the nature of the business, of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law
or as a condition of any license, permit or contract, any related constraints
on operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, the Borrower has reasonably concluded that Environmental Laws are
unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Borrower and its
Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. The Borrower and its Significant
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received
by the Borrower or any Significant Subsidiary, except for such amounts as may
be contested in good faith by appropriate proceedings, so long as collection
thereof is effectively stayed. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries
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in respect of taxes or other governmental charges are, in the reasonable
opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's Material
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true and accurate in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. The Borrower has disclosed to the Banks in writing any and all
facts which materially and adversely affect or may affect (to the extent the
Borrower can now reasonably foresee), the business, operations, prospects or
condition, financial or otherwise, of the Borrower and its Subsidiaries,
considered as a whole, or the ability of the Borrower to perform its
obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such fiscal year and
the related consolidated statements of earnings, retained earnings and cash
flows for such fiscal year, setting forth in each case in comparative form
the
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figures for the previous fiscal year, all certified as to fairness of
presentation, generally accepted accounting principles and consistency by
Ernst & Young or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such quarter and the related consolidated statements of
earnings, retained earnings and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer or the treasurer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer, the chief accounting officer or the treasurer of
the Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.02 to 5.06, inclusive, on the date of such
financial statements and (ii) stating whether there exists on the date of
such certificate any Default and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe that
there existed on the date of such statements any Default and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) forthwith upon the occurrence of any Default, a certificate
of the chief financial officer, the chief accounting officer or the
treasurer of the Borrower
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setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA
or notice that any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer, any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer, treasurer or the
chief accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or
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applicable member of the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Debt. At no time will the ratio of Consolidated
Debt to Consolidated Net Worth exceed 2:1.
SECTION 5.03. Minimum Consolidated Net Worth. Consolidated Net
Worth will not at any time be less than the "Minimum Compliance Level." The
Minimum Compliance Level shall be $875,000,000, adjusted at the end of each
fiscal quarter of the Borrower, beginning with and including the Borrower's
fiscal quarter ending October 1, 1993, upward by an amount equal to 40% of the
Consolidated Net Income (if positive) for such fiscal quarter. The foregoing
increases in the Minimum Compliance Level shall be fully cumulative, and no
reduction shall be made on account of any negative Consolidated Net Income for
any fiscal quarter.
SECTION 5.04. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $25,000,000;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Subsidiary and not created in contemplation of
such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such
asset, provided that such Lien attaches to such asset concurrently with or
within 90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;
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(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in contemplation of
such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Debt is not increased
and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business which
(i) do not secure Debt, (ii) do not secure any obligation in an amount
exceeding $50,000,000 and (iii) do not in the aggregate materially detract
from the value of its assets or materially impair the use thereof in the
operation of its business;
(h) any Lien on any asset of a Subsidiary securing Debt owed to
the Borrower or a Wholly-Owned Subsidiary; and
(i) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at any time
outstanding not to exceed 5% of Consolidated Net Worth.
SECTION 5.05. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person;
provided that the Borrower may merge with another Person if (A) the Borrower is
the corporation surviving such merger and is not a subsidiary of another person
and (B) immediately after giving effect to such merger, no Default shall have
occurred and be continuing; or (ii) sell, lease or otherwise transfer, directly
or indirectly, Significant Assets to any other Person, except for sales, leases
and other transfers to a Wholly-Owned Subsidiary.
SECTION 5.06. Limitation on Subsidiary Debt. The Borrower will
not permit any Subsidiary to become or be liable in respect of any Debt except:
(a) Debt of any corporation outstanding at the time such
corporation becomes a Subsidiary and not created in contemplation of such
event;
(b) Debt of any corporation outstanding at the time such
corporation is merged or consolidated with or into a Subsidiary and not
created in contemplation of such event;
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(c) Debt secured by a Lien permitted by Section 5.04;
(d) Debt owing to the Borrower or a Wholly-Owned Subsidiary; and
(e) Debt not otherwise permitted by the foregoing clauses of this
Section in an aggregate outstanding principal amount for all Subsidiaries
at no time exceeding $150,000,000.
The foregoing is subject to the further limitations that (i) for purposes of
this Section, any preferred stock of a Subsidiary held by a Person other than
the Borrower or a Wholly-Owned Subsidiary shall be included, at the higher of
its voluntary or involuntary liquidation value, in the Debt of such Subsidiary;
and (ii) Debt permitted by this Section does not include a refunding, renewal
or extension of such Debt (so that any such new Debt must fall independently
within one of the above exceptions).
SECTION 5.07. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes, including, without limitation, acquisitions and repurchases of
outstanding shares of its common stock. None of such proceeds will be used in
violation of applicable law.
SECTION 5.08. Maintenance of Property; Insurance. The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear
and tear excepted; will maintain, and will cause each Subsidiary to maintain
(either in the name of the Borrower or in such Subsidiary's own name) with
financially sound and reputable insurance companies, insurance on all their
property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or a similar business; provided that the Borrower
shall have the right to self-insure or use a captive insurer in order to meet
such insurance requirements so long as the Borrower or such captive insurer
provides the Banks with reasonable proof of financial responsibility. The
Borrower will furnish to the Banks, upon written request from the Agent, full
information as to the insurance carried.
SECTION 5.09. Payment of Taxes. The Borrower will pay, and
will cause each Significant Subsidiary to pay, all their respective tax
liabilities, except where the same may be contested in good faith by
appropriate proceedings,
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and will maintain, and will cause each Significant Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of the same.
SECTION 5.10. Compliance with Laws. The Borrower will comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except where (i) the necessity
of compliance therewith is contested in good faith by appropriate proceedings
or (ii) appropriate steps are being taken to correct any failure to comply
therewith and such failure does not have a material adverse effect on the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Subsidiaries.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan when
due, or interest on any Loan, any fees or any other amount payable
hereunder within five days of the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02 to 5.07, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) for 20 days after notice thereof has been given to the
Borrower by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made
by the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect when made (or deemed
made);
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(e) the Borrower or any Subsidiary shall fail to make any payment
in respect of any Material Debt when due or within any applicable grace
period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) the Borrower or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally or admits in writing its inability to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for
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premiums under Section 4007 of ERISA) in respect of, or to cause a trustee
to be appointed to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $10,000,000;
(j) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and the execution or
enforcement thereof shall no longer be effectively stayed for a period of
10 days (or such other period of time as may be provided under applicable
state law for obtaining a stay of judgment); or
(k) (i) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended, and
the regulations thereunder), other than the Trust, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more of the
outstanding shares of voting stock of the Borrower; or (ii) as of any date
a majority of the Board of Directors of the Borrower consists of
individuals who were not either (A) directors of the Borrower as of the
corresponding date of the previous year, (B) selected or nominated to
become directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A), or (C) selected
or nominated to become directors by the Board of Directors of the Borrower
of which a majority consisted of individuals described in clauses (A) and
(B);
then and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of
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the Events of Default specified in clause (g) or (h) above with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent or
the Banks, the Commitments shall thereupon terminate and the Notes (together
with accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and Morgan Guaranty Trust Company of New York and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
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SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its Affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii)
in the absence of its own gross negligence or willful misconduct. Neither the
Agent nor any of its Affiliates nor any of their respective directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness or genuineness of this Agreement, the Notes or any
other instrument or writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its Affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time
by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks
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shall have the right with the consent of the Borrower to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks with the consent of the Borrower and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks and in
consultation with the Borrower, appoint a successor Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Loan:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks having
50% or more of the aggregate amount of the affected Loans advise the Agent
that the Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as
the case may be, as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their CD Loans or Euro-Dollar
Loans, as the case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies
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the Borrower that the circumstances giving rise to such suspension no longer
exist, (i) the obligations of the Banks to make CD Loans or Euro-Dollar Loans,
as the case may be, or to convert outstanding Loans into CD Loans or
Euro-Dollar Loans, as the case may be, shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (x) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (y) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the Base Rate for
such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the
Agent shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans, or to convert outstanding Loans into
Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last day
of the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan to such day or (b)
immediately if such Bank shall determine that it may
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not lawfully continue to maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding (i) with respect to any CD Loan any such requirement included in
an applicable Domestic Reserve Percentage and (ii) with respect to any
Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar
Reserve Percentage), special deposit, insurance assessment (excluding, with
respect to any CD Loan, any such requirement reflected in an applicable
Assessment Rate) or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or on
the United States market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans, and the result of any of the foregoing is
to increase the cost to such Bank (or its Applicable Lending Office) of making
or maintaining any Fixed Rate Loan, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect thereto, by an amount deemed by such
Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation of general
applicability regarding capital adequacy, or any change in any such law, rule
or regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or
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administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to
or for the account of any Bank or the Agent hereunder or under any Note shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings
imposed by any governmental or taxing authority and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Bank or the Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Bank or
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the Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.04) such Bank or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 9.01, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges
or similar levies which arise from any payment made hereunder or under any Note
or from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
15 days from the date such Bank or the Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each
other Bank, and from time to time thereafter if requested in writing by the
Borrower (but only so long as such Bank remains lawfully able to do so), shall
provide the Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest
withholding tax
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rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 8.04(a) or
8.04(c) with respect to Taxes imposed by the United States; provided, however,
that should a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar Loans
and the Borrower shall, by at least four Euro-Dollar Business Days' prior
notice to such Bank through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) CD Loans or Euro-Dollar Loans, as the case may
be, shall be made instead as Base Rate Loans (on which interest and principal
shall be payable contemporaneously with the related Fixed Rate Loans of the
other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid (or converted to a Base Rate Loan), all payments of
principal which would otherwise be applied to repay such Fixed Rate Loans shall
be applied to repay its Base Rate Loans instead.
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If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable to the related CD
Loans or Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.02,
(ii) any Bank has demanded compensation under Section 8.03 or 8.04 or (iii) any
Bank shall not have made available its share of any Borrowing within two
Domestic Business Days after the date of such Borrowing, the Borrower shall
have the right, with the assistance of the Agent, to appoint a substitute bank
or banks mutually satisfactory to the Borrower and the Agent (which may be one
or more of the Banks) to purchase the Note and assume the Commitment of such
Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (y) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until received.
53
<PAGE> 59
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective Affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be
54
<PAGE> 60
required so that all such payments of principal and interest with respect to
the Notes held by the Banks shall be shared by the Banks pro rata; provided
that nothing in this Section shall impair the right of any Bank to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a participation
in a Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Committed Loan or any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Committed Loan or any fees hereunder
or for termination of any Commitment or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement; and
provided further that any provision of this Agreement or the Notes affecting
any outstanding Money Market Loan may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower and the
Bank making such Loan and, if the rights or duties of the Agent are affected
thereby, by the Agent.
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of
55
<PAGE> 61
its Loans. In the event of any such grant by a Bank of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Agent, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VIII with
respect to its participating interest. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b). Any Bank which grants a
participating interest in accordance with this subsection (b) shall notify the
Borrower of the amount thereof and the Participant; provided that the failure
of a Bank to give such notice shall not affect the validity of its grant or the
rights of the Participant with respect to such participating interest.
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all (such
proportionate part to include a Commitment of not less than $10,000,000), of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit G hereto executed
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; provided that if an Assignee is an
Affiliate of such transferor Bank, no such consent shall be required; and
provided further that such assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market Loans. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in
56
<PAGE> 62
such instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note
is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
account, deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the STATE OF NEW YORK. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to
57
<PAGE> 63
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
58
<PAGE> 64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
V.F. CORPORATION
By /s/ L. R. Pugh
--------------------------------
Title: Chairman and C.E.O.
By /s/ F.C. Pickard III
--------------------------------
Title: Vice President and
Treasurer
1047 North Park Road
P.O. Box 1022
Wyomissing, Pennsylvania 19610
Rapifax number: (610) 378-0984
59
<PAGE> 65
Commitments
<TABLE>
<S> <C>
$100,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Stephen J. Kenneally
--------------------------------
Title: Vice President
$30,000,000 ABN AMRO BANK, N.V.
By /s/ John W. Deegan
--------------------------------
Title: Vice President
By /s/ David W. Stack
--------------------------------
Title: Corporate Banking
Officer
$20,000,000 AMSOUTH BANK, N.A.
By /s/ R. Mark Graf
--------------------------------
Title: Vice President
$30,000,000 BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By /s/ Eric Hollanders
--------------------------------
Title: Senior Vice President
By /s/ Eileen J. Stekeur
--------------------------------
Title: Assistant Vice President
$20,000,000 CORESTATES BANK, N.A.
By /s/ James P. Richards
--------------------------------
Title: Vice President
</TABLE>
60
<PAGE> 66
Commitments
<TABLE>
<S> <C>
$50,000,000 CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By /s/ Mary E. Collier
--------------------------------
Title: Vice President and
Manager
and
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mary E. Collier
--------------------------------
Title: Vice President
$50,000,000 CREDIT SUISSE
By /s/ Eileen O'Connell Fox
--------------------------------
Title: Member of Senior
Management
By /s/ Jay Chall
--------------------------------
Title: Member of Senior
Management
$20,000,000 CRESTAR BANK
By /s/ Julian N. Holland, Jr.
-------------------------------
Title: Vice President
$30,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ Robert Grella
--------------------------------
Title: Vice President
By /s/ Deborah Slusarczyk
--------------------------------
Title: Vice President
</TABLE>
61
<PAGE> 67
Commitments
-----------
<TABLE>
<S> <C>
$30,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Cathy Frank
--------------------------------
Title: Corporate Banking
Officer
$20,000,000 FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ Laurie C. Hart
--------------------------------
Title: Vice President
$50,000,000 THE FUJI BANK, LIMITED
By /s/ Takashi Nagao
--------------------------------
Title: Vice President and
Manager
$30,000,000 ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA
By /s/ Gerard M. Mckenna
--------------------------------
Title: Vice President
$40,000,000 MERIDIAN BANK
By /s/ Barbara H. Pattison
--------------------------------
Title: Vice President
</TABLE>
62
<PAGE> 68
Commitments
-----------
<TABLE>
<S> <C>
$50,000,000 NATIONSBANK OF NORTH CAROLINA, N.A.
By /s/ J. Timothy Martin
--------------------------------
Title: Senior Vice President
$70,000,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Robert Q. Reilly
--------------------------------
Title: Vice President
$30,000,000 SOCIETE GENERALE
By /s/ Robert L. Petersen
--------------------------------
Title: Vice President and
Relationship Manager
$30,000,000 UNITED MISSOURI BANK, N.A.
By /s/ Joseph W. "Whit" McCoskrie
--------------------------------
Title: Executive Vice President
$50,000,000 WACHOVIA BANK OF NORTH CAROLINA
By /s/ Robert G. Brookby
--------------------------------
Title: Executive Vice President
</TABLE>
63
<PAGE> 69
<TABLE>
<S> <C>
Commitments
-----------
-----------------
Total Commitments
$750,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Stephen J. Kenneally
--------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Attention:
Telex number: 177615 MGT UT
</TABLE>
64
<PAGE> 70
SCHEDULE I
1. Golden Trade S.R.L. and Breaker Texas Finishing Corporation v. Lee Apparel
Company and Blue Bell, No. 90 CIV 6291 (JMC), filed on October 1, 1990 in
the United States District Court for the Southern District of New York.
2. Warnaco Inc. and Warnaco International Inc. v. VF Corporation and Vives
Vidal, S.A. a/k/a Vivesa, No. 93 CIV 4605 filed on July 8, 1993 in the
United States District Court for the Southern District of New York.
<PAGE> 71
EXHIBIT A
NOTE
New York, New York
, 19__
For value received, V.F. CORPORATION, a Pennsylvania corporation
(the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date therefor specified in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty Trust Company of
New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of October 20, 1994 among the Borrower, the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company of New York, as Agent
(as the same may be amended from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the
<PAGE> 72
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
V.F. CORPORATION
By
------------------------
Title:
2
<PAGE> 73
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
-----------------------------------------------------------------
Amount of
Amount of Type of Principal Notation
Date Loan Loan Repaid Made By
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
3
<PAGE> 74
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: V.F. Corporation
Re: Credit Agreement (the "Credit Agreement") dated as of October 20,
1994 among the Borrower, the Banks listed on the signature pages
thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
V.F. CORPORATION
By
------------------------
Title:
---------------
*Amount must be $15,000,000 or a larger multiple of $1,000,000.
**Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
<PAGE> 75
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to V.F. Corporation (the
"Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of
October 20, 1994 among the Borrower, the Banks parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than 9:00 A.M. (New
York City time) on [date].
Terms used herein have the meanings assigned to them in the
Credit Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By
----------------------
Authorized Officer
<PAGE> 76
EXHIBIT D
Form of Money Market Quote
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
60 Wall Street
New York, New York 10260
Attention:
Re: Money Market Quote to
V.F. Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $____________.]**
----------------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the
<PAGE> 77
amount the Bank is willing to lend. Bids must be made for $5,000,000 or a
larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Credit Agreement dated as of October 20, 1994 among the Borrower, the Banks
listed on the signature pages thereof and yourselves, as Agent, irrevocably
obligates us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated: By:
--------------- --------------------------
Authorized Officer
---------------
*** Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%)
and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
2
<PAGE> 78
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel for V.F. Corporation (the "Borrower") in
connection with the Credit Agreement (the "Credit Agreement") dated as of
October 20, 1994 among the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York, as Agent. Terms defined
in the Credit Agreement are used herein as therein defined. This opinion is
being rendered to you at the request of our client pursuant to Section 3.01(c)
of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Pennsylvania, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
<PAGE> 79
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or, to the best of our knowledge, of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower, or result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
4. Except as set forth in Schedule I to the Credit Agreement, to
the best of our knowledge, there is no action, suit or proceeding pending
against, or to the best of our knowledge threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Subsidiaries, considered as a whole, or which in any
manner draws into question the validity of the Credit Agreement or the Notes.
5. Each of the Borrower's Material Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Very truly yours,
2
<PAGE> 80
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit Agreement
(the "Credit Agreement") dated as of October 20, 1994 among V.F. Corporation, a
Pennsylvania corporation (the "Borrower"), the banks listed on the signature
pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as
Agent (the "Agent"), and have acted as special counsel for the Agent for the
purpose of rendering this opinion pursuant to Section 3.01(d) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the
Credit Agreement constitutes a valid and binding agreement of the Borrower and
each Note constitutes a valid and binding obligation of the Borrower, in each
case enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the
<PAGE> 81
State of New York and the federal laws of the United States of America. In
giving the foregoing opinion, (i) we express no opinion as to the effect (if
any) of any law of any jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such Bank may charge or
collect and (ii) we have relied, without independent investigation, as to all
matters governed by the laws of Pennsylvania, upon the opinion of Clark,
Ladner, Fortenbaugh & Young, dated the date hereof, a copy of which has been
delivered to you.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.
Very truly yours,
2
<PAGE> 82
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), V.F. CORPORATION (the "Borrower") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates to
the Credit Agreement dated as of October 20, 1994 among the Borrower, the
Assignor and the other Banks party thereto, as Banks, and the Agent (the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a Commitment to make Loans to the Borrower in an aggregate principal amount at
any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on the terms hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to
the Assignee all of the rights of the
<PAGE> 83
Assignor under the Credit Agreement to the extent of the Assigned Amount, and
the Assignee hereby accepts such assignment from the Assignor and assumes all
of the obligations of the Assignor under the Credit Agreement to the extent of
the Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the principal amount of the Committed Loans made by
the Assignor outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, the Borrower and the Agent and the
payment of the amounts specified in Section 3 required to be paid on the date
hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and
be obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.
The assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees accrued to the date
hereof with respect to the Assigned Amount are for the account of the Assignor
and such fees accruing from and including the date hereof are for the account
of the Assignee. Each of the Assignor and the Assignee hereby agrees that if
it receives any amount under the Credit Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
[SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the Agent
pursuant to Section 9.06(c) of the Credit Agreement. The execution of this
Agreement by the Borrower and the Agent is evidence of this consent. Pursuant
to Section 9.06(c) the Borrower agrees to execute and deliver a Note payable to
the order of the Assignee to evidence the assignment and assumption provided
for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit
2
<PAGE> 84
Agreement or any Note. The Assignee acknowledges that it has, independently
and without reliance on the Assignor, the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and will continue to
be responsible for making its own independent appraisal of the business,
affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By
-------------------------
Title:
[ASSIGNEE]
By
-------------------------
Title:
[V.F. CORPORATION]
By
-------------------------
Title:
3
<PAGE> 85
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK]
By
-------------------------
Title:
4
<PAGE> 1
VF CORPORATION EXECUTIVE INCENTIVE COMPENSATION PLAN
I. INTRODUCTION
The objective of the Executive Incentive Compensation Plan
(the "Plan") is to provide incentive bonus compensation to the most senior
members of the management team of VF Corporation (the "Company") upon the
achievement of an earnings per share goal previously established for the
Company for each fiscal year. The Plan is based on the assumption that
providing such incentive bonus compensation to the Company's senior management
team will motivate them toward an even greater contribution to the results of
the Company.
II. DEFINITIONS
A. EICP COMMITTEE - The members of the Organization and
Compensation Committee of the Board of Directors of the Company who are
"outside directors" as defined or interpreted for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
B. PARTICIPANT - An employee designated by the Board of
Directors of the Company as an "executive officer" of the Company for purposes
of and pursuant to Rule 16a-1(f) of the Securities Exchange Act of 1934.
C. PERFORMANCE OBJECTIVE - The Company earnings per
share (excluding the effects of extraordinary and nonrecurring items) goal
established by the EICP Committee for each Plan Period.
D. PLAN PERIOD - The Company's fiscal year, commencing
with the 1994 fiscal year.
E. RETIREMENT - As used in the Plan, Retirement is
defined as withdrawal from the regular workforce and entitlement to early,
normal or late retirement benefits, in accordance with the Company's pension
plan.
F. TARGET INCENTIVE AWARD - The target incentive bonus
established by the EICP Committee for a Participant for a Plan Period.
III. OPERATION OF THE PLAN
A. ESTABLISHMENT OF TARGET INCENTIVE AWARDS - No later
than 90 days after the commencement of each Plan Period, the EICP Committee
will establish in writing a Target Incentive Award for each Participant for
such Plan Period.
<PAGE> 2
B. ESTABLISHMENT OF PERFORMANCE OBJECTIVE - No later
than 90 days after the commencement of each Plan Period, the EICP Committee
will establish in writing a range of values for the Performance Objective for
such Plan Period. The EICP Committee may establish a range of incentive
bonuses from 0% to 150% of the Target Incentive Award for each Participant
based on relative percentages of the Performance Objective attained (the
"Incentive Awards").
C. CALCULATION OF INCENTIVE AWARDS - Incentive Awards
will be paid to each Participant by reference to the actual attainment of the
Performance Objective relative to the Performance Objective levels established
by the EICP Committee for the Plan Period. Notwithstanding the foregoing or
any provision of Section IV, the EICP Committee may, in its sole discretion,
exercise negative discretion to reduce earned Incentive Awards.
D. MAXIMUM INCENTIVE AWARD - Notwithstanding any other
provision of the Plan to the contrary, the maximum Incentive Award which may be
paid to a Participant for a Plan Period is $1,500,000.
E. PAYMENT OF INCENTIVE AWARDS - Payment of Incentive
Awards for a Plan Period will be made as soon as practicable following the EICP
Committee's certification in writing as to the level of Performance Objective
attained for the Plan Period.
IV. CONTINGENCIES
A. EMPLOYMENT TERMINATION - Except as provided in
Sections IV.B, IV.C and IV.E regarding permanent disability, death and
Retirement, or unless the EICP Committee exercises its discretion under Section
IV.D, a Participant who terminates employment voluntarily or who is terminated
involuntarily prior to his receipt of an Incentive Award payment under this
Plan forfeits all such payments. A Participant who is employed by the Company
at the end of a Plan Period shall not be deemed or considered to have accrued
any right to or vested in an Incentive Award for the Plan Period.
B. PERMANENT DISABILITY - A Participant whose
employment with the Company is terminated by reason of permanent disability is
eligible to participate in the Plan for the Plan Period in which he becomes
permanently disabled. The Incentive Award payment will be calculated as if
termination had not occurred, but payment will be prorated according to the
Participant's actual length of active service during the Plan Period.
C. DEATH - The estate of a Participant whose employment
2
<PAGE> 3
with the Company is terminated by reason of death during a Plan Period is
eligible to receive a pro rata share of the Incentive Award payment to which
the Participant would have been entitled. The pro rata share will be
calculated according to the Participant's actual length of active service
during the Plan Period.
D. EICP COMMITTEE DISCRETION - The EICP Committee may
grant an Incentive Award for a Plan Period to a terminated employee who had
been a Plan Participant for part or all of the Plan Period if, in the EICP
Committee's judgment, the payment of such Incentive Award would be in the best
interest of the Company. Subject to the Committee's negative discretion under
Section III.C above, any such Incentive Award payment will be calculated as if
termination had not occurred, but with payment prorated according to the
Participant's actual length of active service during the Plan Period.
E. RETIREMENT - A Participant whose Retirement occurs
prior to the distribution of an Incentive Award for a Plan Period does not
forfeit the payment of such Incentive Award. The Incentive Award payment will
be calculated as if Retirement had not occurred, but payment will be prorated
according to the Participant's actual length of active service during the Plan
Period.
V. ADMINISTRATION
The EICP Committee shall have the authority and responsibility
for:
A. Interpretation and administration of the Plan.
B. Establishment of the Target Incentive Awards and
Performance Objective for each Plan Period.
C. Certification in writing as to the level of
Performance Objective attained for each Plan Period.
D. Determination of Incentive Awards and final approval
of payments to Participants.
E. Determination of permanent disability and Retirement
for purposes of the Plan.
F. Payment of prorated awards to terminated employees
if, in its judgment, the payment of such award would be in the best interest of
the Company.
3
<PAGE> 4
G. Certification of death for the purpose of payment of
prorated awards to the estates of Participants.
VI. AMENDMENT AND TERMINATION
The EICP Committee shall have the power to amend, modify,
suspend or terminate any part of the Plan at any time; provided, however, that,
notwithstanding any other provision of the Plan, no such amendment or
modification shall be effective without the approval of the shareholders of the
Company if such shareholder approval is required to preserve the Company's
federal income tax deduction for Incentive Awards paid under the Plan pursuant
to the "other performance-based compensation" exception in Section 162(m)(4)(C)
of the Code.
In the event of such amendment, modification, suspension or
termination, Incentive Awards will be calculated at the end of the Plan Period
in which the change occurs. These Incentive Awards will be prorated according
to the date of amendment, modification, suspension or termination. Any
incentive payments for performance during the balance of the Plan Period will
be made in accordance with the Plan, if any, in effect during the remainder of
the Plan Period.
VII. GENERAL PROVISIONS
A. NO RIGHT TO EMPLOYMENT - The grant of an Incentive
Award shall not be construed as giving a Participant the right to be retained
in the employ of the Company, nor will it affect in any way the right of the
Company to terminate such employment at any time, with or without cause. In
addition, the Company may at any time dismiss a Participant from employment
free from any liability or any claim under the Plan, unless otherwise expressly
provided in the Plan.
B. NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS - Nothing
contained in the Plan shall prevent the Company from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.
C. GOVERNING LAW - The validity, construction and effect
of the Plan or any Incentive Award hereunder shall be determined in accordance
with the laws of the Commonwealth of Pennsylvania.
D. SEVERABILITY - If any provision of the Plan or any
Incentive Award is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction or would disqualify the Plan
4
<PAGE> 5
or any Incentive Award under any law deemed applicable by the EICP Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be so construed or deemed amended without, in the
determination of the EICP Committee, materially altering the purpose or intent
of the Plan or the Incentive Award, such provision shall be stricken as to such
jurisdiction or Incentive Award, and the remainder of the Plan or any such
Incentive Award shall remain in full force and effect.
E. NO TRUST OR FUND CREATED - Neither the Plan nor any
Incentive Award shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company and a Participant
or any other person. To the extent that any Participant or other person
acquires a right to receive payments from the Company pursuant to the Plan,
such right shall be no greater than the right of any unsecured general creditor
of the Company.
F. HEADINGS - Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
VIII. EFFECTIVE DATE
The Plan is effective initially for the fiscal year ended
December 31, 1994, subject to approval by the shareholders of the Company at
the annual meeting of shareholders on April 19, 1994.
5
<PAGE> 1
VF CORPORATION
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT made as of the 14th day of
February, 1995, by and between VF CORPORATION, a Pennsylvania corporation (the
"Company"), and MACKEY J. MCDONALD, President and Chief Operating Officer of
the Company ("McDonald").
BACKGROUND
McDonald is President and Chief Operating Officer of the
Company and has for many years held executive positions with the Company or a
subsidiary of the Company. The Board of Directors has determined that it is in
the best interests of the Company and its shareholders to recognize McDonald's
performance in 1994 and to provide incentive to McDonald to remain an executive
with the Company by making a grant to him of Restricted Stock in accordance
with the terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants and of the
mutual promises contained herein, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meaning set forth below:
(a) "Agreement" shall mean this Restricted Stock
Agreement and any amendments thereto.
(b) "Award" shall mean the award of Restricted
Stock under this Agreement.
(c) "Board" shall mean the Board of Directors of
the Company.
<PAGE> 2
(d) "Committee" shall mean the members of the
Organization and Compensation Committee of the Board who are "outside
directors" as defined or interpreted for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code").
(e) "Common Stock" shall mean the common stock of
the Company as described in the Company's Articles of Incorporation, or such
other stock as shall be substituted therefor.
(f) "Company" shall mean VF Corporation, or any
successor to the Company.
(g) "Disposition" shall mean any sale, transfer,
encumbrance, gift, donation, assignment, pledge, hypothecation, or other
disposition, whether similar or dissimilar to those previously enumerated,
whether voluntary or involuntary, and including, but not limited to, any
disposition by operation of law, by court order, by judicial process, or by
foreclosure, levy, or attachment.
(h) "Restricted Stock" shall mean the Common
Stock awarded to McDonald under the terms of this Agreement and any Common
Stock purchased with distributions with respect to Restricted Stock.
(i) "Termination" shall mean McDonald's voluntary
or involuntary cessation of employment with the Company prior to
2
<PAGE> 3
January 1, 2006 other than by reason of death, permanent disability or Good
Reason (as defined below).
2. AWARD OF RESTRICTED STOCK. As of the date of this
Agreement, the Board of Directors of the Company has granted the Award to
McDonald, consisting of Five Thousand (5,000) shares of Common Stock. Such
shares shall be issued promptly hereafter in McDonald's name but shall be
retained by the Company and shall be subject to all provisions of this
Agreement.
3. DELIVERY OF RESTRICTED STOCK. (a) If McDonald
continuously remains in the employ of the Company through December 31, 2005,
the shares of Restricted Stock shall be delivered to McDonald without any
restrictions promptly after January 1, 2006; provided, however, that in the
event of an earlier termination of McDonald's employment with the Company as a
result of his permanent disability or for Good Reason within thirty-six (36)
months following a Change in Control of the Company, all restrictions on the
Restricted Stock shall lapse and all shares of Common Stock representing the
Award shall be delivered to McDonald. For purposes of this Agreement, "Change
in Control" shall have the same meaning as set forth in Paragraph 2 of that
certain "Restated Agreement" between the Company and McDonald dated December 7,
1993, and "Good Reason" shall have the same meaning as set forth in
Subparagraph (iii) of Paragraph 3 of that same agreement.
(b) One or more stock certificates evidencing the
Restricted Stock shall be issued in the name of McDonald but shall
3
<PAGE> 4
be held and retained by the Company until the restrictions set forth herein
shall have lapsed. All such stock certificates shall bear the following
legend:
"The shares of Common Stock evidenced by this Certificate are
subject to the terms and conditions of a Restricted Stock
Agreement dated February 14, 1995 between the registered owner
and VF Corporation; such shares are subject to forfeiture
under the terms of said Agreement; and such shares shall not
be sold, transferred, assigned, pledged, encumbered or
otherwise alienated or hypothecated except pursuant to the
provisions of said Agreement, a copy of which is available
from VF Corporation upon request."
Until shares of the Restricted Stock are delivered without restrictions to
McDonald in accordance with the terms of this Agreement, McDonald shall deposit
with the Company stock powers or other instruments of transfer or assignment,
duly endorsed in blank with signature guaranteed, corresponding to each
certificate for Restricted Stock or distributions thereon. If McDonald shall
fail to provide the Company with any such stock power or other instrument of
transfer or assignment, McDonald hereby irrevocably appoints the Secretary of
the Company as his attorney-in-fact to execute and deliver any such power or
other instrument which may be necessary to effectuate the transfer of the
Restricted Stock (or assignment of distributions thereon) on the books and
records of the Company.
(c) McDonald shall not effect a Disposition of any shares
of Restricted Stock unless, until and to the extent the restrictions imposed
upon such stock shall have lapsed in
4
<PAGE> 5
accordance with this Agreement. Any attempt to effect a Disposition of any
shares of Restricted Stock shall be void ab initio.
4. FORFEITURE. Except as otherwise provided in this
Agreement, in the event of McDonald's Termination, the shares of Restricted
Stock shall be returned to the Company and shall be deemed to have been
forfeited by McDonald as of the date of Termination.
5. RIGHTS WITH RESPECT TO RESTRICTED STOCK. (a) Except
as otherwise provided in this Agreement, McDonald shall have, with respect to
all shares of Restricted Stock, all the rights of a shareholder of the Company,
including the right to vote the Restricted Stock; provided, however, that all
distributions payable with respect to the Restricted Stock shall be retained by
the Company and reinvested in additional shares of Common Stock to be issued in
the name of McDonald. Any shares of Common Stock acquired as a result of
reinvestment of such distributions shall also be Restricted Stock subject to
the terms and conditions of this Agreement. No fractional shares shall be
issued under this Agreement, and any balance of cash distributions on the
Restricted Stock shall be paid to McDonald (or his beneficiaries) upon
distribution of the Restricted Stock in 2006 pursuant to Subparagraph 3(a) or
earlier in the event of McDonald's termination of employment due to his
permanent disability or for Good Reason,
5
<PAGE> 6
as set forth in Subparagraph 3(a), or his death, as set forth in Paragraph 8.
(b) In the event that the Common Stock, as a result of a
stock split or stock dividend or combination of shares or any other change or
exchange for other securities, by reclassification, reorganization or
otherwise, is increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation, the number of shares of the Restricted Stock shall
be appropriately adjusted to reflect such change. If any such adjustment shall
result in a fractional share, such fraction shall be disregarded.
6. TAXES. (a) If McDonald properly elects, within
thirty (30) days of the date of this Agreement, to include in gross income for
federal income tax purposes an amount equal to the fair market value (as of the
date of grant of the Award) of the Restricted Stock subject to the Award,
McDonald shall make arrangements satisfactory to the Committee to pay to the
Company in 1995 any federal, state or local income taxes required to be
withheld with respect to such shares. If McDonald shall fail to make such tax
payments as are required, the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to McDonald
any federal, state or local taxes of any kind required by law to be withheld
with respect to the Restricted Stock.
6
<PAGE> 7
(b) If McDonald does not make the election
described in Subparagraph 6(a) above, McDonald shall, no later than the date as
of which the restrictions referred to in Paragraph 3 hereof shall lapse, pay to
the Company, or make arrangements satisfactory to the Committee for payment of,
any federal, state or local taxes of any kind required by law to be withheld
with respect to the Restricted Stock, and the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to McDonald any federal, state, or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock.
7. ADMINISTRATION. The Committee shall have the
authority and responsibility for:
(a) Interpretation and administration of this
Agreement;
(b) Determination of McDonald's permanent
disability or death, Termination, termination for Good Reason, or whether a
Change in Control has occurred for purposes of this Agreement; and
(c) Determination of the appropriate
adjustment(s) pursuant to Subparagraph 5(b) hereof.
8. DELIVERY UPON DEATH. In the event of McDonald's
death during the term of this Agreement, the shares of Restricted Stock shall
be delivered, without continuance of any restrictions provided for in this
Agreement, to the beneficiary or beneficiaries
7
<PAGE> 8
designated by McDonald in writing delivered to the Company, or, if such
beneficiary or beneficiaries are then deceased or if McDonald has not so
designated any beneficiary, such shares shall be delivered to the executor or
administrator of McDonald's estate.
9. AMENDMENT, MODIFICATION AND ASSIGNMENT. No provision
of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by McDonald and a duly
authorized officer of the Company. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement. This Agreement shall not be assigned by McDonald in whole or in
part. The rights and obligations created hereunder shall be binding on
McDonald and his heirs and legal representatives and on the successors and
assigns of the Company.
10. MISCELLANEOUS. (a) No Right to Employment - The
grant of the Award shall not be construed as giving McDonald the right to be
retained in the employ of the Company nor affect in any way the right of the
Company to terminate such employment at any time, with or without cause.
8
<PAGE> 9
(b) No Limit on Other Compensation Arrangements -
Nothing contained in this Agreement shall preclude the Company from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(c) Severability - If any provision of this
Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction or would disqualify this Agreement or the Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable law or if it cannot be so construed or deemed
amended without, in the sole discretion of the Committee, materially altering
the purpose or intent of this Agreement and the Award, such provision shall be
stricken as to such jurisdiction or the Award, and the remainder of this
Agreement or the Award shall remain in full force and effect.
(d) No Trust or Fund Created - Neither this
Agreement nor the Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company and
McDonald or any other person. To the extent that McDonald or any other person
acquires a right to receive payments from the Company pursuant to this
Agreement, such right shall be no greater than the right of any unsecured
general creditor of the Company.
9
<PAGE> 10
#&a250V
(e) Governing Law - The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
(but not any provisions relating to conflicts of laws) of the Commonwealth of
Pennsylvania.
(f) Headings - Headings are given to the
Paragraphs and Subparagraphs of this Agreement solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of this Agreement or any
provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
VF CORPORATION
Attest: By: /s/ L.R. Pugh
--------------------------
L.R. Pugh
Chairman of the Board and
/s/ L.M. Tarnoski Chief Executive Officer
-------------------
L.M. Tarnoski
Secretary
(Corporate Seal)
/s/ Mackey J. McDonald (SEAL)
------------------- --------------------------
Witness Mackey J. McDonald
President and Chief
Operating Officer
10
<PAGE> 1
VF CORPORATION
DISCRETIONARY EXECUTIVE BONUS PLAN
I. INTRODUCTION
The objective of the Discretionary Executive Bonus Plan (the "Plan")
is to provide incentive bonus compensation to senior members of the
management team of VF Corporation and its subsidiaries (the "Company")
upon the achievement of one or more performance goals established each
fiscal year. The Plan is based on the assumption that providing such
incentive bonus compensation to the Company's senior management team
will motivate them toward an even greater contribution to the results
of the Company.
II. DEFINITIONS
A. COMMITTEE - The Organization and Compensation Committee of the
Board of Directors of the Company, or its successor committee.
B. PARTICIPANT - An employee of the Company designated by the
Committee.
C. PERFORMANCE OBJECTIVE - The goal or goals established by the
Committee for each Participant for each Plan Period.
D. PLAN PERIOD - The Company's fiscal year, commencing with the 1995
fiscal year.
E. RETIREMENT - As used in the Plan, Retirement is defined as
withdrawal from the regular workforce and entitlement to early,
normal or late retirement benefits, in accordance with the
Company's pension plan.
F. TARGET INCENTIVE AWARD - The target incentive bonus established by
the Committee for a Participant for a Plan Period.
III. OPERATION OF THE PLAN
A. ESTABLISHMENT OF TARGET INCENTIVE AWARDS - No later than 90
days after the commencement of each Plan Period, the Committee
will establish in writing a Target Incentive Award for each
Participant for such Plan Period.
B. ESTABLISHMENT OF PERFORMANCE OBJECTIVE - No later than 90 days
after the commencement of each Plan Period, the Committee will
establish a range of values for the Performance Objective for such
Plan Period based on relative percentages of the Performance
Objective attained (the "Incentive Awards").
<PAGE> 2
C. CALCULATION OF INCENTIVE AWARDS - Incentive Awards will be paid to
each Participant by reference to the actual attainment of the
Performance Objective relative to the Performance Objective levels
established by the Committee for the Plan Period. Notwithstanding
the foregoing or any provision of Section IV, the Board of
Directors of the Company may in its sole discretion increase or
reduce Incentive Awards based on its assessment of individual
performance or such other factors as it deems relevant.
D. PAYMENT OF INCENTIVE AWARDS - Payment of Incentive Awards for a
Plan Period will be made in cash as soon as practicable following
the determination of the amount of the Incentive Awards.
IV. CONTINGENCIES
A. EMPLOYMENT TERMINATION - Except as provided in Sections IV.B, IV.C
and IV.E regarding permanent disability, death and Retirement, or
unless the Committee exercises its discretion under Section IV.D,
a Participant who terminates employment voluntarily or who is
terminated involuntarily prior to his or her receipt of an
Incentive Award payment under this Plan forfeits all such
payments. A Participant who is employed by the Company at the end
of a Plan Period shall not be deemed or considered to have accrued
any right to or vested in an Incentive Award for the Plan Period.
B. PERMANENT DISABILITY - A Participant whose employment with the
Company is terminated by reason of permanent disability is
eligible to participate in the Plan for the Plan Period in which
he or she becomes permanently disabled. Subject to the exercise
by the Committee of its discretion under Section III.C. the
Incentive Award payment will be calculated as if termination had
not occurred, but payment will be prorated according to the
Participant's actual length of active service during the Plan
Period.
C. DEATH - The estate of a Participant whose employment with the
Company is terminated by reason of death during the Plan Period is
eligible to receive a pro rata share of the Incentive Award
payment to which the Participant would have been entitled. The
pro rata share will be calculated according to the Participant's
actual length of active service during the Plan Period.
D. COMMITTEE DISCRETION - The Committee may grant an Incentive Award
for a Plan Period to a terminated employee who had been a Plan
Participant for part or all of the Plan Period if, in the
Committee's judgment, the payment of such Incentive Award would be
in the best interest of the Company. Subject to the discretion
under Section III.C above, any such Incentive Award payment will
be calculated as if termination had not occurred, but with payment
prorated according to the Participant's actual length of active
service during the Plan Period.
<PAGE> 3
E. RETIREMENT - A Participant whose Retirement occurs prior to the
distribution of an Incentive Award for a Plan Period does not
forfeit the payment of such Incentive Award. Subject to the Board
of Director's discretion under Section III.C., the Incentive Award
payment will be calculated as if Retirement had not occurred, but
payment will be prorated according to the Participant's actual
length of active service during the Plan Period.
V. ADMINISTRATION
Except as otherwise provided in the Plan, the Committee shall have the
authority and responsibility for interpretation and administration of
the Plan.
VI. AMENDMENT AND TERMINATION
The Board of Directors of the Company shall have the power to amend,
modify, suspend or terminate this Plan or any part thereof at any
time.
VII. GENERAL PROVISIONS
A. NO RIGHT TO EMPLOYMENT - The grant of an Incentive Award shall not
be construed as giving a Participant the right to be retained in
the employ of the Company, nor will it affect in any way the right
of the Company to terminate such employment at any time, with or
without cause. In addition, the Company may at any time dismiss a
Participant from employment free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan.
B. NO LIMIT ON OTHER COMPENSATION ARRANGEMENT - Nothing
contained in the Plan shall prevent the Company from adopting or
continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.
C. GOVERNING LAW - The validity, construction and effect of the Plan
or any Incentive Award hereunder shall be determined in accordance
with the laws of the Commonwealth of Pennsylvania.
D. NO TRUST OR FUND CREATED - Neither the Plan nor any Incentive
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
and a Participant or any other person. To the extent that any
Participant or other person acquires a right to receive payments
from the Company pursuant to the Plan, such right shall be no
greater than the right of any unsecured general creditor of the
Company.
E. HEADINGS - Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to
the construction or interpretation of the Plan or any provision
thereof.
VIII. EFFECTIVE DATE
The Plan is effective initially for the fiscal year ended on or about
December 31, 1995.
<PAGE> 1
EXHIBIT 11
VF CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
DECEMBER 31 JANUARY 1 JANUARY 2
1994 1994 1993
----------- --------- ---------
<S> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Net Income $ 274,536 $ 246,415 $ 237,031
Less preferred stock dividends 3,430 3,094 4,335
--------- --------- ---------
Net income available to
common stockholders $ 271,106 $ 243,321 $ 232,696
========= ========= =========
Average number of common
shares outstanding 64,620 64,011 58,608
========= ========= =========
Primary earnings per share $4.20 $3.80 $3.97
========= ========= =========
FULLY DILUTED EARNINGS PER SHARE
Net income $ 274,536 $ 246,415 $ 237,031
Increased ESOP contribution
required if preferred stock
were converted to common 1,508 1,567 2,488
--------- --------- ---------
Fully diluted earnings $ 273,028 $ 244,848 $ 234,543
========= ========= =========
Average number of common
shares outstanding 64,620 64,011 58,608
Additional common equivalent shares
resulting from:
Conversion of preferred stock 1,623 1,647 1,664
Dilutive effect of stock options 351 367 716
--------- --------- ---------
Average number of common and common
equivalent shares 66,594 66,025 60,988
========= ========= =========
Fully diluted earnings per share $4.10 $3.71 $3.85
========= ========= =========
</TABLE>
<PAGE> 1
VF CORPORATION QUARTERLY RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
In thousands, Earnings Per Common Share Dividends Per
except per share amounts Net Sales Gross Profit Net Income Primary Fully Diluted Common Share
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C> <C> <C> <C>
1994
FIRST QUARTER $1,123,035 $ 362,612 $ 52,898 $ .81 $ .79 $ .32
SECOND QUARTER 1,186,324 380,175 58,916 .90 .88 .32
THIRD QUARTER 1,373,037 442,077 87,804 1.34 1.31 .32
FOURTH QUARTER 1,289,317 399,554 74,918 1.15 1.12 .34
---------------------------------------------------------------------------------------------------------------------------------
$4,971,713 $1,584,418 $274,536 $4.20 $4.10 $1.30
=================================================================================================================================
1993
First Quarter $1,016,644 $ 323,226 $ 52,729 $ .83 $ .81 $ .30
Second Quarter 1,053,411 327,546 55,731 .85 .83 .30
Third Quarter 1,152,842 355,044 76,815* 1.18* 1.15* .30
Fourth Quarter 1,097,507 339,727 61,140 .94 .92 .32
---------------------------------------------------------------------------------------------------------------------------------
$4,320,404 $1,345,543 $246,415 $3.80 $3.71 $1.22
=================================================================================================================================
1992
First Quarter $ 817,592 $ 261,770 $ 43,692 $ .73 $ .71 $ .27
Second Quarter 852,544 269,203 46,202 .77 .75 .27
Third Quarter 1,125,294 368,215 76,556 1.29 1.25 .27
Fourth Quarter 1,029,019 321,535 70,581** 1.18** 1.14** .30
---------------------------------------------------------------------------------------------------------------------------------
$3,824,449 $1,220,723 $237,031 $3.97 $3.85 $1.11
=================================================================================================================================
</TABLE>
* Interest income relating to settlement of income tax examinations
increased net income by $15.1 million ($.24 per share).
** A refund of prior years' income taxes and related interest income
increased net income by $14.4 million ($.24 per share), and
recognition of cumulative postretirement benefits reduced net income
by $4.1 million ($.07 per share).
[GRAPH]
15
<PAGE> 2
VF CORPORATION CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
In thousands, except per share amounts Fiscal year ended DECEMBER 31, 1994 January 1, 1994 January 2, 1993
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C>
NET SALES $4,971,713 $4,320,404 $3,824,449
COSTS AND OPERATING EXPENSES
Cost of products sold 3,387,295 2,974,861 2,603,726
Marketing, administrative and general expenses 1,045,615 913,734 791,343
-----------------------------------------------------------------------------------------------------------------------------
4,432,910 3,888,595 3,395,069
-----------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 538,803 431,809 429,380
OTHER INCOME (EXPENSE)
Interest income 9,296 35,284 17,453
Interest expense (80,280) (72,671) (71,068)
Miscellaneous, net (12,158) 5,565 8
-----------------------------------------------------------------------------------------------------------------------------
(83,142) (31,822) (53,607)
-----------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 455,661 399,987 375,773
INCOME TAXES 181,125 153,572 138,742
-----------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 274,536 $ 246,415 $ 237,031
=============================================================================================================================
EARNINGS PER COMMON SHARE
Primary $ 4.20 $ 3.80 $ 3.97
Fully diluted 4.10 3.71 3.85
CASH DIVIDENDS PER COMMON SHARE $ 1.30 $ 1.22 $ 1.11
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 64,620 64,011 58,608
=============================================================================================================================
</TABLE>
See notes to consolidated financial statements.
VF CORPORATION SALES AND OPERATING PROFIT BY BUSINESS GROUP (UNAUDITED)
<TABLE>
<CAPTION>
In thousands Fiscal year ended DECEMBER 31, 1994 January 1, 1994 January 2, 1993
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C>
NET SALES
Jeanswear $2,547,131 $2,418,533 $2,155,212
Decorated Knitwear 623,272 392,002 443,970
Intimate Apparel 724,462 668,995 505,210
Playwear 367,508 196,245 152,810
Specialty Apparel 709,340 644,629 567,247
------------------------------------------------------------------------------------------------
$4,971,713 $4,320,404 $3,824,449
------------------------------------------------------------------------------------------------
OPERATING PROFIT
Jeanswear $ 372,392 $ 310,165 $ 300,256
Decorated Knitwear 32,423 3,853 38,326
Intimate Apparel 60,347 57,318 53,534
Playwear 36,457 18,344 2,819
Specialty Apparel 75,851 80,212 65,666
------------------------------------------------------------------------------------------------
577,470 469,892 460,601
CORPORATE EXPENSES (38,667) (38,083) (31,221)
INTEREST, NET (70,984) (37,387) (53,615)
MISCELLANEOUS, NET (12,158) 5,565 8
------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES $ 455,661 $ 399,987 $ 375,773
================================================================================================
</TABLE>
16
<PAGE> 3
VF CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
ANALYSIS OF OPERATIONS
Net sales in 1994 were up 15% over 1993 and 30% over 1992. Excluding
acquisitions, the sales increases were 7% and 17%, respectively. The sales
increases within existing divisions resulted primarily from unit volume growth.
Gross margins were 31.9% of sales in 1994, compared with 31.1% in 1993 and
31.9% in 1992. The increase in 1994 over 1993 is due to higher margins in the
Jeanswear business group resulting from manufacturing efficiencies. In
addition, 1993 was lower than normal due to a provision for capacity reduction
in knitwear and significantly reduced margins at Girbaud.
Marketing and administrative expenses were 21.0% of sales in 1994, compared
with 21.1% and 20.7% in 1993 and 1992, respectively. The inclusion of the
newly acquired international intimate apparel divisions in 1993, which have
historically maintained higher operating expense levels, accounted for the
increase in 1993 and 1994.
[GRAPH]
Interest expense increased in 1994 due to higher borrowings incurred to fund
the acquisitions of H.H. Cutler Company (Cutler) and Nutmeg Industries, Inc.
(Nutmeg) in January 1994. Interest income was lower in 1994, as 1993 included
$24.4 million and 1992 included $8.3 million related to refunds of previous
years' income taxes.
The change in miscellaneous (net) in 1994 resulted primarily from higher
goodwill amortization expense related to the 1994 acquisitions of Cutler and
Nutmeg. Miscellaneous in 1992 was reduced by a $6.6 million provision
representing the cumulative charge for postretirement benefits under Financial
Accounting Standards No. 106.
The effective income tax rate was 39.7% in 1994, 38.4% in 1993 and 36.9% in
1992. Income tax expense was higher in 1994 because of additional
nondeductible goodwill amortization arising from the 1994 acquisitions. Income
tax expense in 1994 and 1993 included the effect of the 1% increase in the
United States corporate income tax rate and in 1992 was reduced by a $9.2
million refund of prior years' taxes.
OPERATING RESULTS BY BUSINESS GROUP
The Jeanswear business group includes the Lee and Wrangler divisions in the
United States and in international markets. Also included is the Girbaud
division, which designs and markets licensed products in the United States
under the Marithe & Francois Girbaud(R) label. Total Jeanswear sales in 1994
increased by 5% over 1993 and 18% over 1992 levels, with international growth
at a more rapid rate than in the United States. Operating margins of Wrangler
and Lee improved during this period due to increased manufacturing efficiencies
and reduced use of outside contractors. Sales and profits at Girbaud, however,
have declined in the last two years due to consumer resistance to
premium-priced jeans.
The Decorated Knitwear business group consists of Bassett-Walker, JanSport
imprinted apparel and, with their acquisitions in 1994, Cutler sports apparel
and Nutmeg. The 1994 sales increase was due to the additions of Cutler and
Nutmeg. The 1994 profit increase resulted from profits at Cutler and Nutmeg
and increased profits at Bassett-Walker, representing a recovery from industry
conditions in 1993 characterized by overcapacity and related pricing weakness.
In addition, 1993 operating results for this group included a $15.0 million
provision for reduction of knitwear production capacity at Bassett-Walker.
The Intimate Apparel business group includes the operations of Vanity Fair
Mills domestically and the intimate apparel divisions in Europe. Sales of the
business group increased during 1994 and 1993 due to
17
<PAGE> 4
VF CORPORATION CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
In thousands DECEMBER 31, 1994 January 1, 1994
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 59,742 $ 151,564
Accounts receivable, less allowances of
$32,794 in 1994 and $28,808 in 1993 613,337 511,887
Inventories 801,338 778,767
Deferred income taxes 48,388 38,138
Other current assets 28,361 19,824
----------------------------------------------------------------------------------------------------------------
Total current assets 1,551,166 1,500,180
PROPERTY, PLANT AND EQUIPMENT 767,011 712,759
INTANGIBLE ASSETS 911,285 575,359
OTHER ASSETS 106,146 89,050
----------------------------------------------------------------------------------------------------------------
$3,335,608 $2,877,348
================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 321,161 $ 35,648
Current portion of long-term debt 2,773 110,119
Accounts payable 291,088 246,503
Accrued liabilities 297,310 267,578
----------------------------------------------------------------------------------------------------------------
Total current liabilities 912,332 659,848
LONG-TERM DEBT 516,700 527,573
OTHER LIABILITIES 152,871 126,978
REDEEMABLE PREFERRED STOCK 62,195 63,309
DEFERRED CONTRIBUTIONS TO EMPLOYEE STOCK OWNERSHIP PLAN (42,499) (47,760)
----------------------------------------------------------------------------------------------------------------
19,696 15,549
COMMON SHAREHOLDERS' EQUITY
Common Stock, stated value $1; shares authorized 150,000,000; shares
outstanding, 64,164,524 in 1994 and 64,488,660 in 1993 64,165 64,489
Additional paid-in capital 552,927 543,165
Foreign currency translation 4,557 (12,865)
Retained earnings 1,112,360 952,611
----------------------------------------------------------------------------------------------------------------
1,734,009 1,547,400
----------------------------------------------------------------------------------------------------------------
$3,335,608 $2,877,348
================================================================================================================
</TABLE>
See notes to consolidated financial statements.
18
<PAGE> 5
VF CORPORATION
growth at Vanity Fair, particularly with the Vassarette brand and private label
sales, and from the European companies acquired during 1992. Operating margins
have declined due to higher marketing and other expenses in the European
companies.
The Playwear business group consists of Healthtex, the Cutler playwear and
sleepwear operations and the preschool sizes of Lee and Wrangler. Growth in
playwear sales and profits over the three year period resulted from the
acquisition of Cutler in 1994 as well as growth within existing companies.
Red Kap, Jantzen and the equipment division of JanSport are the larger
components of the Specialty Apparel group. Sales and profits expanded at each
company in both 1994 and 1993, with the exception of Jantzen which in 1994
incurred a restructuring charge to discontinue its men's sportswear and sweater
businesses.
ANALYSIS OF FINANCIAL CONDITION
In managing its capital structure, VF balances financial leverage with equity
to reduce its overall cost of capital, while providing the flexibility to
pursue investment opportunities that may become available.
In January 1993, the Company sold 4.6 million shares of Common Stock. While
proceeds were specifically used to repay short-term borrowings that temporarily
financed the business acquisitions completed during 1992, the offering provided
additional flexibility within the Company's overall capital structure.
[GRAPH]
It is management's goal to maintain a debt to total capital ratio of less than
40%. Our debt to total capital ratio was within these guidelines: 32.7% at
the end of 1994 and 30.3% at the end of 1993. Despite our stated goal, we will
exceed this level if warranted by appropriate investment opportunities.
[GRAPH]
BALANCE SHEETS
The increase in total assets in 1994 was mostly due to intangible assets
related to the acquisitions of Cutler and Nutmeg. Also showing increases were
two key components of working capital: accounts receivable and inventories.
Accounts receivable increased due to the 1994 acquisitions, somewhat slower
collections and extended terms at international locations. The increase in
inventories resulted from the 1994 acquisitions. However, inventories of
divisions other than those acquired in 1994 declined from prior year levels
despite sales increases.
Short-term borrowings increased in 1994, primarily to finance the acquisitions
of Cutler and Nutmeg, and long-term debt was reduced by $118 million.
The Company enters into foreign currency forward contracts to minimize the
effect of fluctuating foreign currencies on cash flows from its foreign
operations. Such contracts are not material.
19
<PAGE> 6
VF CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
In thousands Fiscal year ended DECEMBER 31, 1994 January 1, 1994 January 2, 1993
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C>
OPERATIONS
Net income $ 274,536 $ 246,415 $ 237,031
Adjustments to reconcile net income
to cash provided by operations:
Depreciation 126,902 106,678 90,866
Amortization of intangible assets 31,609 19,087 17,415
Other, net (4,973) (3,177) (19,215)
Changes in current assets and liabilities:
Accounts receivable (45,519) (24,094) (95,027)
Inventories 72,061 (41,797) (160,511)
Accounts payable 14,559 421 48,608
Other, net 10,226 (9,782) 3,893
-----------------------------------------------------------------------------------------------------------------------
Cash provided by operations 479,401 293,751 123,060
INVESTMENTS
Capital expenditures (132,908) (209,494) (207,202)
Business acquisitions (494,751) (17,629) (133,857)
Sale of outlet facilities - 62,000 -
Other, net 1,053 45,840 8,513
-----------------------------------------------------------------------------------------------------------------------
Cash invested (626,606) (119,283) (332,546)
FINANCING
Increase (decrease) in short-term borrowings 282,739 (86,756) 55,751
Proceeds from long-term debt 99,207 98,557 331,900
Payment of long-term debt (222,718) (283,560) (231,708)
Sale of Common Stock - 232,068 -
Purchase of Common Stock (27,878) - -
Cash dividends paid (88,223) (82,831) (69,552)
Other, net 12,256 13,298 47,123
-----------------------------------------------------------------------------------------------------------------------
Cash provided (used) by financing 55,383 (109,224) 133,514
-----------------------------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND EQUIVALENTS (91,822) 65,244 (75,972)
CASH AND EQUIVALENTS - BEGINNING OF YEAR 151,564 86,320 162,292
-----------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS - END OF YEAR $ 59,742 $ 151,564 $ 86,320
=======================================================================================================================
</TABLE>
20
<PAGE> 7
VF CORPORATION
LIQUIDITY AND CASH FLOW
Working capital declined in 1994 primarily due to short-term borrowings
incurred to finance the acquisitions of Cutler and Nutmeg. Accordingly, the
current ratio declined from 2.3 to 1 in 1993 to 1.7 to 1 in 1994.
Cash provided by operations of $479 million in 1994 was significantly higher
than prior years due to higher net income and reduced working capital
requirements.
[GRAPH]
Capital expenditures were $133 million in 1994. The higher spending level of
the prior two years supported the growth reported during 1994. However, due to
continued growth expectations, capital expenditures should increase in 1995 and
are expected to be funded by cash flows from operations. In addition, the
Company's strong financial position provides substantial unused borrowing
capacity to meet other investment opportunities that may arise.
The Company purchased 588,000 shares of its Common Stock during 1994 in open
market transactions pursuant to an authorization from the Board of Directors to
purchase up to three million shares.
[GRAPH]
Dividends totaled $1.30 per common share in 1994, compared with $1.22 in 1993
and $1.11 in 1992. The dividend payout rate was 31% in 1994, 32% in 1993 and
28% in 1992. The indicated annual dividend rate for 1995 is $1.36 per share.
VF has paid dividends on its Common Stock annually since 1941 and intends to
maintain a long-term payout rate of 30%.
OTHER MATTERS
The Company is a defendant in an action initiated in 1990 alleging infringement
of a patent allegedly relating to a process, commonly called "acid wash," used
in the production of certain denim garments. Similar actions have been brought
against other denim apparel manufacturers. The Company is vigorously
contesting the action and believes that it has numerous substantive defenses.
No trial date has been set. Based on currently available information and the
advice of counsel, management is not in a position to determine the likelihood
of the outcome of the action with certainty. Notwithstanding, management
believes at this time that the outcome will not have a material impact on the
financial position of the Company.
21
<PAGE> 8
VF CORPORATION CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Foreign
Common Paid-in Currency Retained
In thousands Stock Capital Translation Earnings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C> <C>
BALANCE JANUARY 4, 1992 $ 57,700 $ 239,987 $ 16,054 $ 624,337
Net income - - - 237,031
Cash dividends:
Common Stock - - - (65,217)
Series B Preferred Stock - - - (4,335)
Exercise of stock options,
net of shares surrendered 1,819 61,349 - (2,944)
Foreign currency translation - - (11,810) -
---------------------------------------------------------------------------------------------------------------
BALANCE JANUARY 2, 1993 59,519 301,336 4,244 788,872
Net income - - - 246,415
Cash dividends:
Common Stock - - - (78,540)
Series B Preferred Stock - - - (4,291)
Tax benefit from Preferred Stock dividends - - - 1,180
Redemption of Preferred Stock - - - (264)
Sale of Common Stock 4,600 227,468 - -
Exercise of stock options,
net of shares surrendered 370 14,361 - (761)
Foreign currency translation, less
deferred income taxes of $6,927 - - (17,109) -
---------------------------------------------------------------------------------------------------------------
BALANCE JANUARY 1, 1994 64,489 543,165 (12,865) 952,611
Net income - - - 274,536
Cash dividends:
Common Stock - - - (83,994)
Series B Preferred Stock - - - (4,229)
Tax benefit from Preferred Stock dividends - - - 1,082
Redemption of Preferred Stock - - - (284)
Purchase of treasury shares (588) - - (27,290)
Exercise of stock options,
net of shares surrendered 264 9,762 - (72)
Foreign currency translation, less
deferred income taxes of $9,381 - - 17,422 -
---------------------------------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1994 $ 64,165 $ 552,927 $ 4,557 $1,112,360
===============================================================================================================
</TABLE>
See notes to consolidated financial statements.
22
<PAGE> 9
MANAGEMENT'S RESPONSIBILITY FOR
FINANCIAL STATEMENTS
Management of VF Corporation has prepared the accompanying financial statements
and is responsible for their content. We believe the statements accurately
report the financial position and operating results of the Company, on a basis
consistent with generally accepted accounting principles and management's best
estimates and judgments. Other financial information in this report is
consistent with these financial statements.
Management has established a system of internal control which we believe
reasonably assures that assets are safeguarded and that financial information
is accurately reported. Inherent in all systems of internal control are
limitations based on the recognition that the costs of such systems should be
related to the benefits to be derived. The internal control system is
routinely challenged by management, the independent auditors and our internal
audit staff to determine whether the internal control system continues to
function effectively. Significant auditor recommendations have been reviewed
and adopted when appropriate.
The Audit Committee of the Board of Directors meets periodically with the
independent and internal auditors to discuss the scope and findings of audit
work performed, the impact of financial reporting issues and the adequacy of
the internal control system. The independent auditors and internal auditors
have full access to the Committee, with and without the presence of management,
to discuss any appropriate matters.
/s/ L. R. PUGH
---------------------------
L. R. PUGH
Chairman and Chief Executive Officer
/s/ G. G. JOHNSON
---------------------------
G. G. JOHNSON
Vice President - Finance and Chief Financial Officer
/s/ R. K. SHEARER
---------------------------
R. K. SHEARER
Vice President - Controller and Chief Accounting Officer
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
VF Corporation
We have audited the accompanying consolidated balance sheets of VF Corporation
as of December 31, 1994 and January 1, 1994, and the related consolidated
statements of income, cash flows, and common shareholders' equity for each of
the three fiscal years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of VF Corporation at
December 31, 1994 and January 1, 1994, and the consolidated results of its
operations and its cash flows for each of the three fiscal years in the period
ended December 31, 1994 in conformity with generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
Reading, Pennsylvania
February 8, 1995
23
<PAGE> 10
VF CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company's principal business is designing, manufacturing and marketing high
quality jeanswear, knitwear, intimate apparel, children's playwear and other
apparel. The Company's customers are primarily department, discount and
specialty stores.
NOTE A - ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of all wholly owned subsidiaries after elimination of intercompany
transactions and profits.
INVENTORIES are stated at the lower of cost or market. Inventories stated on
the last-in, first-out basis represent 33% of total 1994 and 32% of 1993
inventories. Remaining inventories are valued using the first-in, first-out
method.
PROPERTY AND DEPRECIATION: Property, plant and equipment are stated at cost.
Depreciation is computed principally by the straight-line method for financial
reporting purposes and by accelerated methods for income tax purposes.
INTANGIBLE ASSETS represent the excess of costs over the fair value of net
tangible assets of businesses acquired, less accumulated amortization of $174.0
million and $140.0 million in 1994 and 1993. These assets are amortized on the
straight-line method over five to forty years. The Company periodically
reviews intangible assets to assess recoverability based on projected operating
income of the related business unit.
EARNINGS PER SHARE: Primary earnings per share are computed by dividing net
income, after deducting preferred dividends, by the weighted average number of
common shares outstanding. Fully diluted earnings per share assume the
conversion of Preferred Stock and the exercise of stock options that have a
dilutive effect.
NOTE B - ACQUISITIONS
On January 4, 1994, the Company acquired the common stock of H.H. Cutler
Company for a total consideration of $154.7 million. On January 19, 1994, the
Company acquired the common stock of Nutmeg Industries, Inc. for a total
consideration of $352.2 million. Both companies manufacture and market
licensed apparel.
In December 1993, the Company acquired the principal operating assets of
Central Corsetera, S.A. for $17.6 million. During 1992, the Company acquired
the common stock of The Valero Group (Valero), Vives Vidal, S.A. (Vivesa) and
Jean Bellanger Enterprises (JBE) for an aggregate purchase price of $150.9
million. These companies manufacture and market branded intimate apparel
primarily in France and Spain.
All acquisitions have been accounted for as purchases, and accordingly,
operating results of these companies have been included in the consolidated
financial statements since the dates of acquisition.
The following unaudited pro forma results of operations for 1993 assume that
the acquisitions of H.H. Cutler Company and Nutmeg Industries, Inc. had
occurred at January 3, 1993:
<TABLE>
<CAPTION>
(In thousands, except per share amounts)
--------------------------------------------------------
<S> <C>
Net sales $4,710,557
Net income 232,034
Earnings per common share
Primary $ 3.58
Fully diluted 3.49
========================================================
</TABLE>
NOTE C - INVENTORIES
<TABLE>
<CAPTION>
In thousands 1994 1993
--------------------------------------------------------------------------
<S> <C> <C>
Finished products $473,646 $486,045
Work in process 139,255 119,582
Materials and supplies 188,437 173,140
--------------------------------------------------------------------------
$801,338 $778,767
==========================================================================
</TABLE>
The current cost of inventories stated on the last-in, first-out method (see
Note A) is not significantly different from their value determined under the
first-in, first-out method.
NOTE D - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------
<S> <C> <C>
Land $ 42,745 $ 40,612
Buildings 391,250 346,656
Machinery and equipment 969,857 862,755
------------------------------------------------------------------------
1,403,852 1,250,023
Less accumulated depreciation 636,841 537,264
------------------------------------------------------------------------
$ 767,011 $ 712,759
========================================================================
</TABLE>
NOTE E - SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
--------------------------------------------------------------------
1994 1993
(In thousands)
--------------------------------------------------------------------
<S> <C> <C>
Commercial paper $216,703 $ -
Banks 104,458 35,648
--------------------------------------------------------------------
$321,161 $35,648
====================================================================
</TABLE>
The weighted average interest rate was 6.16% at the end of 1994 and 10.70% at
the end of 1993.
24
<PAGE> 11
VF CORPORATION
The Company maintains an unsecured revolving credit agreement with a group of
banks for $750.0 million that supports commercial paper borrowings and is
otherwise available for general corporate purposes. The agreement requires a
.12% fee on the unused portion and extends to 1999. At December 31, 1994,
there was $75.0 million outstanding under the agreement.
NOTE F - ACCRUED LIABILITIES
<TABLE>
<CAPTION>
In thousands 1994 1993
----------------------------------------------------------------
<S> <C> <C>
Income taxes $ 43,220 $ 41,270
Compensation 64,147 48,633
Insurance 38,940 27,345
Other 151,003 150,330
----------------------------------------------------------------
$ 297,310 $ 267,578
================================================================
</TABLE>
NOTE G - LONG-TERM DEBT
<TABLE>
<CAPTION>
In thousands 1994 1993
-----------------------------------------------------------------------
<S> <C> <C>
9.40% notes, due 1996 $ - $100,000
8.00% notes, due 1997 - 100,000
9.50% notes, due 1999 100,000 100,000
9.50% notes, due 2001 100,000 100,000
6.63% notes, due 2003 100,000 100,000
7.60% notes, due 2004 100,000 -
9.25% debentures, due 2022 100,000 100,000
Capital leases and other 19,473 37,692
-----------------------------------------------------------------------
519,473 637,692
Less current portion 2,773 110,119
-----------------------------------------------------------------------
$516,700 $527,573
=======================================================================
</TABLE>
The scheduled payments of long-term debt are $2.6 million in 1996, $2.2 million
in 1997, $1.0 million in 1998 and $100.8 million in 1999. The 1997 notes were
called for redemption in January 1994 and, accordingly, were classified as a
current obligation at January 1, 1994. The Company paid interest of $83.1
million in 1994, $70.3 million in 1993 and $68.1 million in 1992.
NOTE H - OTHER LIABILITIES
<TABLE>
<CAPTION>
In thousands 1994 1993
-----------------------------------------------------------------------
<S> <C> <C>
Deferred income taxes $ 64,830 $ 60,446
Deferred compensation 49,283 30,782
Other 38,758 35,750
-----------------------------------------------------------------------
$152,871 $126,978
=======================================================================
</TABLE>
NOTE I - BENEFIT PLANS
The Company sponsors a noncontributory defined benefit pension plan covering
substantially all full-time domestic employees. Benefits are based on
employees' compensation and years of service. The Company annually contributes
amounts, as determined by an actuary, that provide the plan with sufficient
assets to meet future benefit payments. Plan assets consist principally of
common stocks, U.S. government obligations and corporate obligations.
The effect of the defined benefit plan on income is as follows:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned during the year $ 16,230 $ 10,337 $ 8,568
Interest cost on projected benefit obligation 25,639 22,148 18,934
Actual return on plan assets (5,193) (34,895) (19,646)
Net amortization and deferral (18,124) 12,574 (1,884)
--------------------------------------------------------------------------------------------------------------
Pension expense $ 18,552 $ 10,164 $ 5,972
==============================================================================================================
</TABLE>
The funded status of the defined benefit plan is as follows:
<TABLE>
<CAPTION>
In thousands 1994 1993
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Present value of vested benefits $251,540 $265,457
================================================================================================================
Present value of accumulated benefits $273,037 $285,390
================================================================================================================
Plan assets at fair value $286,554 $289,324
Present value of projected benefits 313,150 332,656
----------------------------------------------------------------------------------------------------------------
Funded status (26,596) (43,332)
Unrecognized net loss 22,468 42,147
Unrecognized net asset (16,202) (20,580)
Unrecognized prior service cost 28,182 33,169
----------------------------------------------------------------------------------------------------------------
Pension asset recorded in Other Assets $ 7,852 $ 11,404
================================================================================================================
</TABLE>
The projected benefit obligation was determined using an assumed discount rate
of 8.25% in 1994, 7.50% in 1993 and 9.00% in 1992. The assumptions for
compensation increases were 5.00% in 1994 and 1993 and 5.50% in 1992; the
assumption for return on plan assets was 8.75% in each year.
The Company also sponsors an Employee Stock Ownership Plan (ESOP) as part of a
401(k) savings plan covering most domestic salaried employees. Contributions
made by the Company to the 401(k) plan are based on a specified percentage of
employee contributions. Cash contributions by the Company were $5.6 million in
1994, $4.5 million in 1993 and $4.0 million in 1992. Plan expense was $6.4
million for 1994 and $6.0 million for 1993 and 1992, after giving effect to
tax-deductible dividends on the Series B Preferred Stock of $4.2 million in
1994 and $4.3 million in 1993 and 1992.
NOTE J - CAPITAL
Common shares outstanding are net of shares held in treasury of 2,358,675 in
1994, 1,769,131 in 1993 and 1,766,832 in 1992. In January 1993, the Company
issued 4,600,000 shares of Common Stock in a public offering. The net proceeds
were used to repay borrowings incurred to purchase Valero, Vivesa and JBE.
(See Note B.)
25
<PAGE> 12
VF CORPORATION
There are 25,000,000 authorized shares of Preferred Stock, $1 par value. As of
December 31, 1994, 2,000,000 shares are designated as Series A Preferred Stock,
of which none have been issued. In addition, 2,105,263 shares are designated
as 6.75% Series B Preferred Stock, which were purchased by the ESOP.
There were 2,014,427 shares of Series B Preferred Stock outstanding at December
31, 1994, 2,050,491 shares outstanding at January 1, 1994 and 2,069,965 shares
at January 2, 1993, after share redemptions.
Each outstanding share of Common Stock has one preferred stock purchase right
attached. The rights become exercisable ten days after an outside party
acquires, or makes an offer for, 20% or more of the Common Stock. Each right
entitles its holder to buy 1/100 share of Series A Preferred Stock for $100.
Once exercisable, if the Company is involved in a merger or other business
combination or an outside party acquires 20% or more of the Common Stock, each
right will be modified to entitle its holder (other than the acquiror) to
purchase common stock of the acquiring company or, in certain circumstances, VF
Common Stock having a market value of twice the exercise price of the right.
In some circumstances, rights other than those held by an acquiror may be
exchanged for one share of VF Common Stock or 1/100 share of Series A Preferred
Stock. The rights, which expire on January 13, 1998, may be redeemed at $.01
per right prior to their becoming exercisable.
NOTE K - REDEEMABLE PREFERRED STOCK
Each share of Series B Preferred Stock has a redemption value of $30.88 plus
cumulative accrued dividends, is convertible into 8/10 share of Common Stock
and is entitled to one vote per share along with the Common Stock. The trustee
for the ESOP may convert the preferred shares to Common Stock at any time or
may cause the Company to redeem the preferred shares under certain
circumstances. The Series B Preferred Stock also has preference in liquidation
over all other stock issues.
The ESOP's purchase of the preferred shares was funded by a loan of $65.0
million from the Company that bears interest at 9.80% and is payable in
increasing installments through 2003. Interest related to this loan was $5.3
million in 1994, $5.7 million in 1993 and $6.0 million in 1992. Principal and
interest obligations on the loan are satisfied as the Company makes
contributions to the savings plan and dividends are paid on the Preferred
Stock. As principal payments are made on the loan, shares of Preferred Stock
are allocated to participating employees' accounts within the ESOP.
NOTE L - STOCK OPTIONS
The Company has granted nonqualified and incentive stock options under two
stock option plans at prices not less than fair market value on the date of
grant. Options become exercisable one year after the date of grant and expire
ten years after the date of grant unless otherwise specified by the Board of
Directors.
Changes in the status of the stock option plans are summarized as follows:
<TABLE>
<CAPTION>
Shares Under Shares Available
Option for Option
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance January 1, 1994 4,168,291 2,115,446
Options granted 1,015,475 (1,015,475)
Options exercised at $13.03 to $45.20 per share (265,408) -
Options canceled (178,870) 174,869
----------------------------------------------------------------------------------------------------------------
Balance December 31, 1994 4,739,488 1,274,840
================================================================================================================
Options exercisable at December 31, 1994 at
$13.03 to $57.20 per share 3,724,013
================================================================================================================
</TABLE>
NOTE M - INCOME TAXES
The provision for income taxes is computed based on the following amounts of
income before income taxes:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $409,806 $356,109 $363,732
Foreign 45,855 43,878 12,041
---------------------------------------------------------------------------------------------------------------
$455,661 $399,987 $375,773
===============================================================================================================
</TABLE>
The provision for income taxes consists of:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $149,000 $125,966 $111,501
Foreign 24,649 17,863 17,404
State 12,978 13,806 15,973
--------------------------------------------------------------------------------------------------------------
186,627 157,635 144,878
Deferred, primarily federal (5,502) (4,063) (6,136)
--------------------------------------------------------------------------------------------------------------
$181,125 $153,572 $138,742
==============================================================================================================
</TABLE>
The reasons for the difference between income taxes computed by applying the
statutory federal income tax rate and income tax expense in the financial
statements are as follows:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tax at federal statutory rate $159,481 $139,995 $127,763
State income taxes, net of federal tax benefit 8,436 8,974 10,542
Amortization of intangible assets 7,126 4,234 4,781
Tax refund - - (9,208)
Other, net 6,082 369 4,864
--------------------------------------------------------------------------------------------------------------
$181,125 $153,572 $138,742
==============================================================================================================
</TABLE>
26
<PAGE> 13
VF CORPORATION
Deferred income tax liabilities and assets consist of the following:
<TABLE>
<CAPTION>
In thousands 1994 1993
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Depreciation $ 65,767 $ 62,731
Inventories 21,207 22,141
Unremitted foreign earnings 12,812 16,341
Other 13,974 7,317
----------------------------------------------------------------------------------------------------------------
Deferred income tax liabilities $113,760 $108,530
================================================================================================================
Employee benefits $ 27,758 $ 21,699
Other accrued expenses 51,095 44,872
Inventories 18,748 14,278
Operating loss carryforwards 12,988 10,135
Foreign currency translation - 6,927
----------------------------------------------------------------------------------------------------------------
110,589 97,911
Valuation allowance (10,866) (6,733)
----------------------------------------------------------------------------------------------------------------
Deferred income tax assets $ 99,723 $ 91,178
================================================================================================================
</TABLE>
Income taxes paid were $177.0 million in 1994, $152.1 million in 1993 and
$145.0 million in 1992. Interest income in 1993 includes $24.4 million and in
1992 includes $8.3 million relating to settlements of tax examinations of
acquired companies.
NOTE N - LEASES
The Company leases certain facilities and equipment under noncancelable
operating leases. Rental expense was $55.5 million in 1994, $46.9 million in
1993 and $30.2 million in 1992. Future minimum lease payments are $50.0
million, $39.6 million, $29.7 million, $22.1 million and $16.5 million for the
years 1995 through 1999 and $56.2 million thereafter.
NOTE O - OPERATIONS BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales:
United States $4,209,090 $3,678,577 $3,404,171
Foreign 762,623 641,827 420,278
-------------------------------------------------------------------------------------------------------------
$4,971,713 $4,320,404 $3,824,449
=============================================================================================================
Operating profit:
United States $ 497,099 $ 399,001 $ 426,348
Foreign 80,373 70,891 34,253
-------------------------------------------------------------------------------------------------------------
577,472 469,892 460,601
Corporate expenses (38,669) (38,083) (31,221)
Interest, net (70,984) (37,387) (53,615)
Miscellaneous, net (12,158) 5,565 8
-------------------------------------------------------------------------------------------------------------
Income before income taxes $ 455,661 $ 399,987 $ 375,773
=============================================================================================================
Identifiable assets:
United States $2,632,079 $2,178,754 $2,122,334
Foreign 610,543 562,053 503,324
Corporate 92,986 136,541 86,722
-------------------------------------------------------------------------------------------------------------
$3,335,608 $2,877,348 $2,712,380
=============================================================================================================
</TABLE>
Foreign operations are conducted primarily in Europe. Foreign operations
located elsewhere are not significant. Corporate assets consist primarily of
cash and cash equivalents.
NOTE P - FINANCIAL INSTRUMENTS
The following represents the carrying amount and fair value of financial
instruments included in the balance sheets under the indicated captions:
<TABLE>
<CAPTION>
In thousands 1994 1993
--------------------------------------------------------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial liabilities:
Short-term borrowings $321,161 $321,161 $ 35,648 $ 35,648
Long-term debt 516,700 506,900 527,573 579,373
Redeemable Preferred Stock 62,195 78,361 63,309 75,709
==============================================================================================================
</TABLE>
The fair value of the Company's short-term and long-term debt is estimated
based on quoted market prices or values of comparable borrowings. The fair
value of the Series B Preferred Stock is based on a valuation by an independent
financial consulting firm.
27
<PAGE> 14
VF CORPORATION FINANCIAL SUMMARY
<TABLE>
<CAPTION>
In thousands, except per share amounts 1994 1993 1992 1991
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales $ 4,971,713 $ 4,320,404 $ 3,824,449 $ 2,952,433
Cost of products sold 3,387,295 2,974,861 2,603,726 2,039,787
------------------------------------------------------------------------------------------------------------------------------
Gross profit 1,584,418 1,345,543 1,220,723 912,646
Marketing, administrative and
general expenses 1,045,615 913,734 791,343 608,592
------------------------------------------------------------------------------------------------------------------------------
Operating income 538,803 431,809 429,380 304,054
Interest, net (70,984) (37,387) (53,615) (55,155)
Miscellaneous, net (12,158) 5,565 8 14,298
------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 455,661 399,987 375,773 263,197
Income taxes 181,125 153,572 138,742 101,867
------------------------------------------------------------------------------------------------------------------------------
Net income $ 274,536 $ 246,415 $ 237,031 $ 161,330
------------------------------------------------------------------------------------------------------------------------------
Per share of Common Stock(1)
Earnings - primary $ 4.20 $ 3.80 $ 3.97 $ 2.75
Dividends 1.30 1.22 1.11 1.02
Average number of common
shares outstanding 64,620 64,011 58,608 57,152
Net income as % of average
common shareholders' equity 16.8% 16.9% 23.0% 18.8%
Net income as % of
average total assets 7.9% 8.5% 9.7% 8.0%
==============================================================================================================================
FINANCIAL POSITION
Accounts receivable, net $ 613,337 $ 511,887 $ 493,030 $ 333,073
Inventories 801,338 778,767 742,474 537,027
Total current assets 1,551,166 1,500,180 1,365,573 1,071,109
Property, plant and
equipment, net 767,011 712,759 711,087 577,019
Total assets 3,335,608 2,877,348 2,712,380 2,126,913
Total current liabilities 912,332 659,848 684,002 510,776
Long-term debt 516,700 527,573 767,641 583,209
Common shareholders' equity 1,734,009 1,547,400 1,153,971 938,078
==============================================================================================================================
OTHER STATISTICS
Working capital $ 638,834 $ 840,332 $ 681,571 $ 560,333
Current ratio 1.7 2.3 2.0 2.1
Debt to total capital ratio (2) 32.7% 30.3% 44.8% 42.2%
Dividends $ 88,223 $ 82,831 $ 69,552 $ 62,712
Purchase of Common Stock 27,878 -- -- --
Cash provided by operations 479,401 293,751 123,060 287,172
Capital expenditures
(excluding acquisitions) 132,908 209,494 207,202 110,762
Depreciation and amortization 158,511 125,765 108,281 90,991
==============================================================================================================================
MARKET DATA
Market price range(1) $ 53 3/4-44 1/4 $ 56 1/2-39 1/2 $ 57 1/2-38 1/2 $ 41 1/2-17 5/8
Book value per
common share(1) 27.02 23.99 19.39 16.26
Price earnings ratio - high-low 12.8-10.5 14.9-10.4 14.5-9.7 15.1-6.4
Rate of payout(3) 31.0% 32.1% 28.0% 37.1%
==============================================================================================================================
</TABLE>
(1) Per share computations and market price ranges have been adjusted
to reflect a two-for-one stock split in April 1986.
(2) Capital is defined as common shareholders' equity plus short-term
and long-term debt.
(3) Dividends per share divided by earnings per share.
28
<PAGE> 15
<TABLE>
<CAPTION>
1990 1989 1988 1987 1986 1985 1984
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<S> <C> <C> <C> <C> <C> <C>
$ 2,612,613 $ 2,532,711 $ 2,516,107 $2,573,762 $1,544,574 $1,481,182 $ 1,167,356
1,874,590 1,753,476 1,751,577 1,758,773 1,002,856 951,368 742,959
------------------------------------------------------------------------------------------------------------------------------
738,023 779,235 764,530 814,989 541,718 529,814 424,397
530,770 466,371 459,929 456,383 278,175 239,825 191,589
------------------------------------------------------------------------------------------------------------------------------
207,253 312,864 304,601 358,606 263,543 289,989 232,808
(64,938) (38,908) (38,232) (50,631) (18,319) (19,338) 1,875
769 9,789 8,561 5,770 4,219 1,466 5,948
------------------------------------------------------------------------------------------------------------------------------
143,084 283,745 274,930 313,745 249,443 272,117 240,631
61,960 107,734 101,270 134,051 112,985 132,700 115,885
------------------------------------------------------------------------------------------------------------------------------
$ 81,124 $ 176,011 $ 173,660 $ 179,694 $ 136,458 $ 139,417 $ 124,746
------------------------------------------------------------------------------------------------------------------------------
$ 1.35 $ 2.72 $ 2.55 $ 2.65 $ 2.16 $ 2.25 $ 1.96
1.00 .91 .85 .75 .66 .58 .52
57,122 64,803 68,165 67,793 63,068 61,963 63,706
9.9% 17.4% 16.8% 19.8% 21.5% 28.4% 29.8%
4.1% 9.3% 9.1% 9.4% 12.3% 16.2% 19.7%
==============================================================================================================================
$ 301,032 $ 319,981 $ 266,399 $ 285,370 $ 267,368 $ 148,423 $ 135,750
436,657 507,451 422,801 493,024 465,988 208,745 175,812
824,249 873,532 786,466 912,038 877,064 436,804 378,017
537,178 513,927 482,248 507,106 488,898 315,538 304,067
1,852,829 1,889,764 1,759,862 1,925,656 1,897,782 860,193 807,675
351,462 325,057 231,024 463,993 452,876 145,052 188,774
585,142 637,549 302,348 322,888 437,558 124,280 153,294
823,126 819,777 1,095,383 980,591 831,249 554,223 441,370
==============================================================================================================================
$ 472,787 $ 548,475 $ 555,442 $ 448,045 $ 424,188 $ 291,752 $ 189,243
2.3 2.7 3.4 2.0 1.9 3.0 2.0
44.9% 47.3% 22.9% 35.7% 45.4% 23.1% 34.1%
$ 61,133 $ 57,313 $ 57,958 $ 50,862 $ 42,124 $ 36,026 $ 32,607
29,950 395,213 -- -- -- -- 47,940
284,378 172,822 328,260 250,121 164,072 152,336 195,260
110,143 125,294 64,137 90,817 60,775 53,142 30,714
97,850 91,029 88,934 89,689 54,966 50,075 26,842
==============================================================================================================================
$34 1/4-11 5/8 $38 3/8-27 3/4 $33 7/8-24 3/4 $48 1/4-22 $ 36-24 $ 27-13 $16 1/4-10 7/8
14.44 14.14 16.05 14.43 12.30 8.91 7.14
25.4-8.6 14.1-10.2 13.3-9.7 18.2-8.3 16.7-11.1 12.0-5.8 8.3-5.5
74.1% 33.5% 33.3% 28.3% 30.6% 25.8% 26.3%
==============================================================================================================================
</TABLE>
29
<PAGE> 16
VF CORPORATION INVESTOR INFORMATION
COMMON STOCK
Listed on the New York Stock Exchange and Pacific Stock Exchange -- trading
symbol VFC.
SHAREHOLDERS OF RECORD
As of February 1, 1995, there were 8,238 shareholders of record.
DIVIDEND POLICY
Quarterly dividends on VF Corporation Common Stock, when declared, are usually
paid on or about the 20th day of March, June, September and December.
DIVIDEND REINVESTMENT PLAN
The Plan is offered to shareholders by First Chicago Trust Company of New York.
The Plan provides for automatic dividend reinvestment and voluntary cash
contributions for the purchase of additional shares of VF Corporation Common
Stock. Questions concerning general Plan information should be directed to the
Office of the Vice President - Secretary of VF Corporation.
DIVIDEND DIRECT DEPOSIT
Shareholders may have their dividends deposited into their savings or checking
account at any bank that is a member of the Automated Clearing House (ACH)
system. A brochure describing this service may be obtained by contacting First
Chicago or VF Corporation.
QUARTERLY COMMON STOCK PRICE INFORMATION
The high and low sales prices for the periods indicated were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------------
High Low High Low High Low
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First quarter $51 7/8 $44 1/2 $56 1/2 $44 3/4 $46 7/8 $38 1/2
Second quarter 53 3/4 46 51 3/4 45 3/4 47 7/8 40 1/2
Third quarter 52 7/8 46 1/2 47 1/4 40 3/8 50 1/4 43
Fourth quarter 51 5/8 44 1/4 46 1/4 39 1/2 57 1/2 45 1/8
------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 1
EXHIBIT 21
VF CORPORATION
SUBSIDIARIES OF THE CORPORATION
Following is a listing of the significant subsidiaries of the Corporation, all
of which are wholly owned:
<TABLE>
<CAPTION>
NAME JURISDICTION OF ORGANIZATION
---------------------------- ------------------------------
<S> <C>
Bassett-Walker Apparel Corp. Delaware
Bassett-Walker, Inc. Virginia
H.H. Cutler Company Michigan
D. J. Industries, Inc. Delaware
Healthtex, Inc. Delaware
Healthtex Apparel Corp. Delaware
JanSport, Inc. Delaware
JanSport Apparel Corp. Delaware
Jantzen Inc. Nevada
Jantzen Apparel Corp. Delaware
Lee Apparel Company, Inc. Pennsylvania
Lee Apparel (U.K.) Ltd. N. Ireland
The H. D. Lee Gmbh Germany
The H. D. Lee Company, Inc. Delaware
Lee Europe N. V. Belgium
Les Dessous Feminins Sandefo, S.A. France
Lou Diffusion, S.A. France
Nutmeg Industries, Inc. Florida
Red Kap Industries, Inc. Delaware
Red Kap Apparel Corp. Delaware
VF Factory Outlet, Inc. Delaware
VF International Division, Inc. Delaware
VF France, S.A. France
Vanity Fair, Inc. Delaware
Vanity Fair Mills, Inc. Alabama
Vives Vidal, S.A. Spain
Wrangler Limited United Kingdom
Wrangler Germany Gmbh Germany
Wrangler Apparel Corp. Delaware
Wrangler, Inc. Alabama
Wrangler Clothing Corp. Delaware
</TABLE>
Excludes subsidiaries which, if considered as a single subsidiary, or after
taking into account the elimination of intercompany accounts, would not
constitute a significant subsidiary at December 31, 1994.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of VF Corporation of our report dated February 8, 1995, included in the 1994
Annual Report to Shareholders of VF Corporation.
Our audits also included the financial statement schedule of VF Corporation
listed in item 14(a). This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in (1) Registration Statement
No. 33-55014, which acts as Post-Effective Amendment No. 2 to Registration
Statement No. 33-26566 on Form S-8/S-3, and Post-Effective Amendment No. 6 to
Registration Statement No. 2-85579 on Form S-8/S-3, (2) Registration Statement
No. 33-33621 on Form S-8, which acts as Post-Effective Amendment No. 2 to
Registration Statement No. 2-99945 on Form S-8, (3) Registration Statement No.
33-10491 on Form S-3, (4) Registration Statement No. 33-41241 on Form S-8, and
(5) Registration Statement No. 33-53231 on Form S-3 of our report dated
February 8, 1995, with respect to the consolidated financial statements
incorporated herein by reference and our report included in the preceding
paragraph with respect to the financial statement schedule included in the 1994
Annual Report (Form 10-K) of VF Corporation.
/s/ ERNST & YOUNG LLP
Reading, Pennsylvania
March 24, 1995
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in (1) Registration Statement No.
33-55014, which acts as Post-Effective Amendment No. 2 to Registration
Statement No. 33-26566 on Form S-8/S-3, and Post-Effective Amendment No. 6 to
Registration Statement No. 2-85579 on Form S-8/S-3, and (2) Registration
Statement No. 33-33621 on Form S-8, which acts as Post-Effective Amendment No.
2 to Registration Statement No. 2-99945 on Form S-8 of our report dated March
10, 1995, with respect to the financial statements included in the Annual
Report on Form 11-K of the VF Corporation Tax-Advantaged Savings Plan for
Salaried Employees for the year ended December 31, 1994.
/s/ ERNST & YOUNG LLP
Reading, Pennsylvania
March 24, 1995
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that V.F. Corporation and the
undersigned directors and officers of V.F. Corporation do hereby constitute and
appoint G. G. Johnson, L. M. Tarnoski and R. K. Shearer, and each of them,
true and lawful attorneys-in-fact of the undersigned to execute on their behalf
the Annual Report of V.F. Corporation on Form 10-K (including any amendments
thereof) of the Securities and Exchange Commission for the fiscal year of V.F.
Corporation ended December 31, 1994.
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Power of Attorney this 14th day of February, 1995.
<TABLE>
<CAPTION>
ATTEST: V. F. CORPORATION
<S> <C>
/s/ L. M. Tarnoski By: /s/ L. R. Pugh
---------------------------------- ------------------------------------
L. M. Tarnoski L. R. Pugh
Secretary Chairman of the Board and
Chief Executive Officer
Principal Executive Officer: Principal Financial Officer:
/s/ L. R. Pugh /s/ G. G. Johnson
---------------------------------- ---------------------------------------
L. R. Pugh, Chairman of the Board, G. G. Johnson, Vice President-Finance and
Chief Executive Officer Chief Financial Officer
and Director
Principal Accounting Officer:
/s/ R. K. Shearer /s/ Robert D. Buzzell
---------------------------------- ---------------------------------------
R. K. Shearer, Vice President - Robert D. Buzzell, Director
Controller
/s/ Edward E. Crutchfield, Jr. /s/ Ursula F. Fairbairn
---------------------------------- ---------------------------------------
Edward E. Crutchfield, Jr., Ursula F. Fairbairn, Director
Director
/s/ Barbara S. Feigin /s/ Roger S. Hillas
---------------------------------- ---------------------------------------
Barbara S. Feigin, Director Roger S. Hillas, Director
/s/ Leon C. Holt, Jr. /s/ Robert J. Hurst
---------------------------------- ---------------------------------------
Leon C. Holt, Jr., Director Robert J. Hurst, Director
/s/ J. Berkley Ingram, Jr. /s/ R. F. Longbine
---------------------------------- ---------------------------------------
J. Berkley Ingram, Jr., Director R. F. Longbine, Director
/s/ Mackey J. McDonald /s/ William E. Pike
---------------------------------- ---------------------------------------
Mackey J. McDonald, Director William E. Pike, Director
/s/ M. Rust Sharp /s/ L. D. Walker
---------------------------------- ---------------------------------------
M. Rust Sharp, Director L. D. Walker, Director
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
VF CORPORATION
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the 1994
Annual Report and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 59,742
<SECURITIES> 0
<RECEIVABLES> 646,131
<ALLOWANCES> 32,794
<INVENTORY> 801,338
<CURRENT-ASSETS> 1,551,166
<PP&E> 1,403,852
<DEPRECIATION> 636,841
<TOTAL-ASSETS> 3,335,608
<CURRENT-LIABILITIES> 912,332
<BONDS> 516,700
<COMMON> 64,165
19,696
0
<OTHER-SE> 1,669,844
<TOTAL-LIABILITY-AND-EQUITY> 3,335,608
<SALES> 4,971,713
<TOTAL-REVENUES> 4,971,713
<CGS> 3,387,295
<TOTAL-COSTS> 4,432,910
<OTHER-EXPENSES> 2,862
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80,280
<INCOME-PRETAX> 455,661
<INCOME-TAX> 181,125
<INCOME-CONTINUING> 274,536
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 274,536
<EPS-PRIMARY> 4.20
<EPS-DILUTED> 4.10
</TABLE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 11-K
Annual Report
/X/ Annual Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the year ended December 31, 1994
-----------------
or
/ / Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934 [No Fee Required)
For the transition period from to
---------------------- -----------------
Commission file number 1-5256
------
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
(Full title of plan)
1047 NORTH PARK ROAD, WYOMISSING, PA 19610
------------------------------------------
(Address of principal offices)
Registrant's telephone number, including area code (610) 378-1151
--------------
1
<PAGE> 2
Item 1. Changes in the Plan
Effective April 1, 1994, the amount of compensation which eligible employees
may elect to contribute to the Plan increased from 8% to 10%.
Item 2. Changes in Investment Policy
There have been no changes during the year in the policy with respect to the
kind of securities or other investments in which funds held under the Plan may
be invested.
Item 3. Contributions Under the Plan
Contributions made by VF Corporation (the Corporation) are measured by
reference to the employee's contributions and are not discretionary.
Item 4. Participating Employees
There were approximately 7,482 enrolled participants in the Plan as of
December 31, 1994, out of approximately 8,512 eligible employees.
Item 5. Administration of the Plan
(a) The Plan provides that a Committee of three persons be appointed to
administer the Plan. The Committee, the VF Corporation Pension Plan
Committee, is comprised of the following officers of the Corporation: Lori
M. Tarnoski, Vice President-Secretary; Frank C. Pickard III, Vice
President-Treasurer; and Harold E. Addis, Vice President - Human Resources
and Administration. All committee persons are located at the Corporation's
headquarters: 1047 North Park Road, Wyomissing, PA 19610. Each of these
individuals is an employee of the Corporation. The Committee has the power
to adopt rules and regulations for carrying out and administering the Plan
and has the full authority and power to construe, interpret and administer
the Plan. Committee members receive no compensation from the Plan.
(b) All expenses of administration of the Plan, including Trustee fees, are
paid by the Corporation.
Item 6. Custodian of Investments
(a) The Corporation has entered into a Trust Agreement under which UMB Bank,
n.a., 10th and Grand, P.O. Box 419692, Kansas City, MO 64141-6692, has
been appointed as Trustee under the Plan. Under the terms of the Trust
Agreement, UMB Bank, n.a. holds and invests all assets of the Plan,
subject to the direction of each of the participants of the Plan regarding
the fund or funds to receive contributions.
(b) The custodian's compensation is paid by the Corporation.
(c) No bond was furnished or is required to be furnished by the Trustee.
2
<PAGE> 3
Item 7. Reports to Participating Employees
Each participant receives a quarterly statement showing the amounts contributed
by him/her to each of the funds during the calendar quarter and the market
values as of the end of each quarter. The statement also shows the
Corporation's matching contributions allocated to the participant through the
Employee Stock Ownership Plan, which are invested in ESOP Preferred Stock, and
the fair values based on the preferred stock's stated redemption price of
$30.875 per share or 80% of the market value of the Corporation's Common Stock,
whichever is greater.
Item 8. Investment of Funds
Each participant by written election directs the Trustee to invest his/her own
contributions in one or more of the following funds:
- Money Market Fund
- Fixed Income Fund
- Equity Growth & Income Fund
- Equity Growth Fund
- VF Corporation Common Stock Fund (investing in common stock of the
Corporation)
Brokerage commissions of $6,859, $6,436, and $6,166 for the years ended
December 31, 1994, 1993 and 1992 were paid by the Trustee to acquire the
Corporation's common stock for the Plan.
The Corporation's matching contributions go solely to the ESOP. These
contributions are allocated to participants who receive full value in the form
of ESOP Preferred Stock and are used by the ESOP to pay debt service on a loan
from the Corporation.
Item 9. Financial Statements and Exhibits
(a) Financial Statements Page No.
Report of Independent Auditors 5
Statements of Net Assets Available for Benefits -
For the Years Ended December 31, 1994 and 1993
- Combined Plan 6
- Money Market Fund and Fixed Income Fund 7
- Equity Growth & Income Fund and Equity Growth Fund 8
- VF Corporation Common Stock Fund and 9
Employee Stock Ownership Plan
Statements of Changes in Net Assets Available for Benefits -
For the Years Ended December 31, 1994, 1993 and 1992
- Combined Plan 10
- Money Market Fund 11
- Fixed Income Fund 12
- Equity Growth & Income Fund 13
- Equity Growth Fund 14
- VF Corporation Common Stock Fund 15
- Employee Stock Ownership Plan 16
Notes to Financial Statements 17
Schedules:
Schedules I, II and III have been omitted because the required
information is included in the financial statements and the related
notes.
(b) Exhibits - none
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the VF
Corporation Pension Plan Committee has duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
VF Corporation Tax-Advantaged Savings Plan
for Salaried Employees
------------------------------------------
By: /s/ HAROLD E. ADDIS
-------------------------------------
Harold E. Addis, Chairman of the
VF Corporation Pension Plan Committee
Date:
----------------------
4
<PAGE> 5
Report of Independent Auditors
VF Corporation Pension Plan Committee
VF Corporation Tax-Advantaged Savings Plan
for Salaried Employees
We have audited the accompanying statements of net assets available for
benefits of the VF Corporation Tax-Advantaged Savings Plan for Salaried
Employees as of December 31, 1994 and 1993, and the related statements of
changes in net assets available for benefits for each of the three years in the
period ended December 31, 1994. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perfom the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the VF
Corporation Tax-Advantaged Savings Plan for Salaried Employees at December 31,
1994 and 1993, and the changes in its net assets available for benefits for
each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Reading, Pennsylvania
March 10, 1995
5
<PAGE> 6
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
<TABLE>
<CAPTION>
December 31
--------------------------------------------------------
ASSETS 1994 1993
------ ---- ----
<S> <C> <C>
Investments at fair value
VF Corporation Common Stock -
396,815 shares in 1994
395,009 shares in 1993 $ 19,295,129 $ 18,219,790
VF Corporation ESOP
Preferred Stock -
2,014,427 shares in 1994
2,050,491 shares in 1993 78,361,197 75,663,118
United States goverment obligations 15,767,773 13,673,576
Other securities 48,287,278 40,149,325
---------------------- -----------------
Total investments 161,711,377 147,705,809
Dividends and interest receivable 275,090 246,092
Loans receivable from participants 7,283,233 5,718,544
---------------------- -----------------
TOTAL ASSETS 169,269,700 153,670,445
---------------------- -----------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 1,965,876 861,855
Employee Stock Ownership
Plan obligation - payable to VF Corporation 51,667,392 56,121,089
Forfeitures related to withdrawals
and terminations 22,176 16,943
---------------------- -----------------
TOTAL LIABILITIES 53,655,444 56,999,887
---------------------- -----------------
Net assets available for benefits $115,614,256 $96,670,558
====================== =================
</TABLE>
See notes to financial statements.
6
<PAGE> 7
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
MONEY MARKET FUND AND FIXED INCOME FUND
<TABLE>
<CAPTION>
Money Market Fund Fixed Income Fund
December 31 December 31
------------------------------------ --------------------------------------
ASSETS 1994 1993 1994 1993
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
United States government obligations $ 0 $ 0 $15,767,773 $13,673,576
Other securities 5,717,176 5,406,831 1,236,587 1,460,947
---------------- --------------- ---------------- ----------------
Total investments 5,717,176 5,406,831 17,004,360 15,134,523
Dividends and interest receivable 27,978 15,686 242,709 228,310
Loans receivable from participants 1,224,845 1,040,317 1,406,351 1,133,339
---------------- --------------- ---------------- ----------------
TOTAL ASSETS 6,969,999 6,462,834 18,653,420 16,496,172
---------------- --------------- ---------------- ----------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 90,309 100,468 526,219 136,218
Forfeitures related to withdrawals
and terminations 0 163 0 202
---------------- --------------- ---------------- ----------------
TOTAL LIABILITIES 90,309 100,631 526,219 136,420
---------------- --------------- ---------------- ----------------
Net assets available for benefits $ 6,879,690 $ 6,362,203 $18,127,201 $16,359,752
================ =============== ================ ================
</TABLE>
See notes to financial statements.
7
<PAGE> 8
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
EQUITY GROWTH & INCOME FUND AND EQUITY GROWTH FUND
<TABLE>
<CAPTION>
Equity Growth & Income Fund Equity Growth Fund
December 31 December 31
------------------------------------------- ----------------------------------------
ASSETS 1994 1993 1994 1993
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
Other securities $ 25,348,419 $ 22,366,528 $ 15,730,539 $ 10,684,033
--------------------- ----------------- ------------------- -----------------
Total investments 25,348,419 22,366,528 15,730,539 10,684,033
Dividends and interest receivable 125 82 148 67
Loans receivable from participants 1,986,103 1,550,713 543,483 379,273
--------------------- ----------------- ------------------- -----------------
TOTAL ASSETS 27,334,647 23,917,323 16,274,170 11,063,373
--------------------- ----------------- ------------------- -----------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 387,091 225,221 294,676 97,948
Forfeitures related to withdrawals
and terminations 0 821 0 65
--------------------- ----------------- ------------------- -----------------
TOTAL LIABILITIES 387,091 226,042 294,676 98,013
--------------------- ----------------- ------------------- -----------------
Net assets available for benefits $ 26,947,556 $ 23,691,281 $ 15,979,494 $ 10,965,360
===================== ================= =================== =================
</TABLE>
See notes to financial statements.
8
<PAGE> 9
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
VF CORPORATION COMMON STOCK FUND AND EMPLOYEE STOCK OWNERSHIP PLAN
<TABLE>
<CAPTION>
VF Corporation Common Stock Fund Employee Stock Ownership Plan
December 31 December 31
--------------------------------------- ------------------------------------
ASSETS 1994 1993 1994 1993
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
VF Corporation Common Stock
396,815 shares in 1994
395,009 shares in 1993 $19,295,129 $18,219,790 $ 0 $ 0
VF Corporation ESOP
Preferred Stock
2,014,427 shares in 1994
2,050,491 shares in 1993 0 0 78,361,197 75,663,118
Other securities 177,387 189,091 77,170 41,895
---------------- --------------- --------------- ---------------
Total investments 19,472,516 18,408,881 78,438,367 75,705,013
Dividends and interest receivable 637 300 3,493 1,647
Loans receivable from participants 2,122,451 1,614,902 0 0
---------------- --------------- --------------- ---------------
TOTAL ASSETS 21,595,604 20,024,083 78,441,860 75,706,660
---------------- --------------- --------------- ---------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 314,703 140,009 352,878 161,991
Employee Stock Ownership
Plan obligation - payable to VF Corporation 0 0 51,667,392 56,121,089
Forfeitures related to withdrawals
and terminations 0 600 22,176 15,092
---------------- --------------- --------------- ---------------
TOTAL LIABILITIES 314,703 140,609 52,042,446 56,298,172
---------------- --------------- --------------- ---------------
Net assets available for benefits $21,280,901 $19,883,474 $26,399,414 $19,408,488
================ =============== =============== ===============
</TABLE>
See notes to financial statements.
9
<PAGE> 10
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on VF Corporation
Common Stock $ 497,205 $ 492,821 $ 432,281
Dividends on ESOP
Preferred Stock 4,228,632 4,290,967 4,335,278
Interest 979,143 1,052,117 975,168
Income from mutual funds and
bank common trust funds 2,614,714 2,285,814 3,257,792
---------------------- ----------------- -------------------
8,319,694 8,121,719 9,000,519
---------------------- ----------------- -------------------
Contributions
Interest on loan repayment 402,626 288,773 204,448
Participants 15,290,975 10,822,389 9,485,940
VF Corporation 5,570,215 4,542,628 3,960,222
---------------------- ----------------- -------------------
21,263,816 15,653,790 13,650,610
---------------------- ----------------- -------------------
Withdrawals (8,128,767) (4,975,559) (4,862,648)
Forfeitures that reduce
VF Corporation contributions (118,128) (146,621) (71,919)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (5,344,502) (5,698,769) (5,954,445)
Net realized gain on investments 1,224,507 794,846 421,571
Net unrealized appreciation (depreciation)
in fair value of investments 1,727,078 (12,820,932) 26,406,953
---------------------- ----------------- -------------------
Net increase 18,943,698 928,474 38,590,641
Net assets available for benefits
at beginning of year 96,670,558 95,742,084 57,151,443
---------------------- ----------------- -------------------
Net assets available for benefits
at end of year $115,614,256 $96,670,558 $95,742,084
====================== ================= ===================
</TABLE>
See notes to financial statements.
10
<PAGE> 11
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
MONEY MARKET FUND
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 204,216 $ 185,319 $ 196,134
---------------- ----------------- -------------------
204,216 185,319 196,134
---------------- ----------------- -------------------
Contributions
Interest on loan repayments 34,933 29,013 26,475
Participants 1,024,192 965,642 1,160,453
---------------- ----------------- -------------------
1,059,125 994,655 1,186,928
---------------- ----------------- -------------------
Withdrawals (434,310) (427,805) (582,038)
Forfeitures that reduce
VF Corporation contributions (435) (2,177) (1,268)
Fund transfers, net (311,109) (1,106,278) (1,063,530)
---------------- ----------------- -------------------
Net increase (decrease) 517,487 (356,286) (263,774)
Net assets available for benefits at
beginning of year 6,362,203 6,718,489 6,982,263
---------------- ----------------- -------------------
Net assets available for benefits at
end of year $ 6,879,690 $ 6,362,203 $ 6,718,489
================ ================= ===================
</TABLE>
See notes to financial statements.
11
<PAGE> 12
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FIXED INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Interest $ 979,143 $ 1,052,117 $ 975,168
Income from mutual funds and
bank common trust funds 38,440 10,278 18,207
-------------------- ------------------- -----------------
1,017,583 1,062,395 993,375
-------------------- ------------------- -----------------
Contributions
Interest on loan repayments 59,901 51,108 40,561
Participants 2,598,897 2,339,497 2,240,187
-------------------- ------------------- -----------------
2,658,798 2,390,605 2,280,748
-------------------- ------------------- -----------------
Withdrawals (1,771,571) (1,157,076) (1,286,865)
Forfeitures that reduce
VF Corporation contributions (890) (1,946) (3,233)
Net realized gain (loss) on investments 22,892 (12,656) (15,069)
Net unrealized depreciation
in fair value of investments (146,268) (12,832) (30,255)
Fund transfers (net) (13,095) (303,898) 209,157
-------------------- ------------------- -----------------
Net increase 1,767,449 1,964,592 2,147,858
Net assets available for benefits at
beginning of year 16,359,752 14,395,160 12,247,302
-------------------- ------------------- -----------------
Net assets available for benefits at
end of year $ 18,127,201 $ 16,359,752 $ 14,395,160
==================== =================== =================
</TABLE>
See notes to financial statements.
12
<PAGE> 13
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
EQUITY GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 1,833,144 $ 1,197,977 $ 2,219,621
-------------------- -------------------- --------------------
1,833,144 1,197,977 2,219,621
-------------------- -------------------- --------------------
Contributions
Interest on loan repayments 123,536 84,286 55,468
Participants 4,624,489 3,056,697 2,486,856
-------------------- -------------------- --------------------
4,748,025 3,140,983 2,542,324
-------------------- -------------------- --------------------
Withdrawals (2,031,249) (1,170,331) (1,171,833)
Forfeitures that reduce
VF Corporation contributions (1,164) (3,966) (2,564)
Net realized gain on investments 170,735 117,328 29,069
Net unrealized (depreciation) appreciation
in fair Value of investments (1,437,737) 2,097,687 (565,714)
Fund transfers, net (25,479) 628,464 442,288
-------------------- -------------------- --------------------
Net increase 3,256,275 6,008,142 3,493,191
Net assets available for benefits at
beginning of year 23,691,281 17,683,139 14,189,948
-------------------- -------------------- --------------------
Net assets available for benefits at
end of year $ 26,947,556 $ 23,691,281 $ 17,683,139
==================== ==================== ====================
</TABLE>
See notes to financial statements.
13
<PAGE> 14
VF COPPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
EQUITY GROWTH FUND
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from Mutual funds and
bank common trust funds $ 515,020 $ 877,085 $ 807,786
------------------- ------------------ ------------------
515,020 877,085 807,786
------------------- ------------------ ------------------
Contributions
Interest on loan repayments 81,580 35,211 21,514
Participants 3,834,443 1,450,084 1,067,754
------------------- ------------------ ------------------
3,916,023 1,485,295 1,089,268
------------------- ------------------ ------------------
Withdrawals (1,129,617) (409,898) (93,788)
Forfeitures that reduce
VF Corporation contributions (118) (1,512) (641)
Net realized (loss) gain on investments (10,760) 5,543 (27,894)
Net unrealized (depreciation) appreciation
in fair value of investments (715,960) 651,820 (417,780)
Fund transfers, net 2,439,546 2,471,670 501,959
------------------- ------------------ ------------------
Net increase 5,014,134 5,080,003 1,858,910
Net assets available for benefits at
beginning of year 10,965,360 5,885,357 4,026,447
------------------- ------------------ ------------------
Net assets available for benefits at
end of year $ 15,979,494 $ 10,965,360 $ 5,885,357
=================== ================== ==================
</TABLE>
See notes to financial statements.
14
<PAGE> 15
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
VF CORPORATION COMMON STOCK FUND
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on VF Corporation
Common Stock $ 497,205 $ 492,821 $ 432,281
Income from mutual funds and
bank common trust funds 4,284 2,559 2,725
----------------------- ---------------------- ---------------------
501,489 495,380 435,006
----------------------- ---------------------- ---------------------
Contributions
Interest on loan repayments 102,676 89,155 60,430
Participants 3,208,954 3,010,469 2,530,690
----------------------- ---------------------- ---------------------
3,311,630 3,099,624 2,591,120
----------------------- ---------------------- ---------------------
Withdrawals (1,310,494) (1,023,379) (1,152,194)
Forfeitures that reduce
VF Corporation contributions (841) (4,057) (3,145)
Net realized gain on investments 770,499 506,187 435,465
Net unrealized appreciation (depreciation)
in fair value of investments 215,007 (3,612,779) 4,831,401
Fund transfers, net (2,089,863) (1,689,958) (89,874)
----------------------- ---------------------- ---------------------
Net increase (decrease) 1,397,427 (2,228,982) 7,047,779
Net assets available for benefits at
beginning of year 19,883,474 22,112,456 15,064,677
----------------------- ---------------------- ---------------------
Net assets available for benefits at
end of year $ 21,280,901 $ 19,883,474 $ 22,112,456
======================= ====================== =====================
</TABLE>
See notes to financial statements.
15
<PAGE> 16
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
EMPLOYEE STOCK OWNERSHIP PLAN
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on ESOP Preferred Stock $ 4,228,632 $ 4,290,967 $ 4,335,278
Income from mutual funds and
bank common trust funds 19,610 12,596 13,319
------------------ ------------------ ------------------
4,248,242 4,303,563 4,348,597
------------------ ------------------ ------------------
Contributions
VF Corporation 5,570,215 4,542,628 3,960,222
------------------ ------------------ ------------------
5,570,215 4,542,628 3,960,222
------------------ ------------------ ------------------
Withdrawals (1,451,526) (787,070) (575,930)
Forfeitures that reduce
VF Corporation contributions (114,680) (132,963) (61,068)
Interest paid to VF Corporation on Employee Stock
Ownership Plan obligation (5,344,502) (5,698,769) (5,954,445)
Net realized gain on investments 271,141 178,444 0
Net unrealized appreciation (depreciation)
in fair value of investments 3,812,036 (11,944,828) 22,589,301
------------------ ------------------ ------------------
Net increase (decrease) 6,990,926 (9,538,995) 24,306,677
Net assets available for benefits at
beginning of year 19,408,488 28,947,483 4,640,806
------------------ ------------------ ------------------
Net assets available for benefits at
end of year $ 26,399,414 $ 19,408,488 $ 28,947,483
================== ================== ==================
</TABLE>
See notes to financial statements.
16
<PAGE> 17
VP CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF THE PLAN
VF Corporation (the Corporation) sponsors the VP Corporation Tax-Advantaged
Savings Plan for Salaried Employees (the Plan), which is a cash or deferred
plan under Section 401(k) of the Internal Revenue Code. Under the Plan, certain
salaried employees of specified subsidiaries, having at least one year of
credited service, may elect to contribute between 2% and 10% of their
compensation to the Plan. The Corporation matches employee contributions by 50%
for up to 6% of compensation contributed by the employee. Employees remain
fully vested in their contributions to the Plan. The Corporation's matching
contributions are vested monthly on a pro rata basis with full vesting after
five years of service or upon normal or late retirement, disability or death.
The Plan includes an Employee Stock Ownership Plan (ESOP). In 1990, the ESOP
purchased 2,105,263 shares of VF Corporation 6.75% Series B ESOP Convertible
Preferred Stock (ESOP Preferred Stock) for $65.0 million. Each share of ESOP
Preferred Stock, which has a redemption value of $30.88 plus cumulative accrued
dividends, is convertible into an eight-tenths share of VF Corporation Common
Stock and is entitled to one vote. The trustee for the ESOP may convert the
ESOP Preferred Stock to Common Stock at any time or may cause the Corporation
to redeem the ESOP Preferred Stock under certain circumstances. The ESOP
Preferred Stock also has preference in liquidation over all other stock issues.
The Corporation's matching contributions, all of which go to the ESOP, are
allocated to employees in shares of ESOP Preferred Stock. Of the shares of ESOP
Preferred Stock owned by the ESOP, 637,947 shares in 1994 and 503,616 shares in
1993 have been allocated to employees.
The ESOP's purchase of the ESOP Preferred Stock was funded by a loan of $65.0
million from the Corporation that bears interest at 9.8%. The obligation will
be repaid in increasing installments through 2003 from future Corporation
matching contributions to the ESOP and dividends on the ESOP Preferred Stock.
Employee contributions are invested at the direction of the employee in one or
more of the funds administered by the Plan's trustee. The investment programs
of the Plan are as follows:
(a) Money Market Fund: Monies are invested in a money market fund.
(b) Fixed Income Fund: Monies are invested in investment vehicles that
provide a fixed rate of return.
(c) Equity Growth & Income-Fund: Monies are invested in investments
with emphasis on capital appreciation.
(d) Equity Growth Fund: Monies are primarily invested in common stock,
securities convertible into common stock and debt securities.
(e) VF Corporation Common Stock Fund: Monies are invested in Common
Stock of the Corporation purchased on the open market at prevailing
prices on the New York Stock Exchange on the date of purchase.
Employees can direct no more than 50% of their contributions to
the VF Corporation Common Stock Fund.
17
<PAGE> 18
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
Individual accounts are maintained for each participant; each account includes
the individual's contributions, Corporation matching contributions and
investment funds' earnings. Accounts may become payable upon retirement,
disability, death or termination of employment. Participants may also withdraw
all or a portion of their accounts by filing a written request that
demonstrates financial hardship. Participants may elect to receive
distributions in a lump sum or in an annuity, or accounts may be rolled over
into another IRS-approved tax deferral vehicle. Forfeitures are used to reduce
VP Corporation's obligation to pay plan expenses.
Participants may borrow from their individual account. They are charged
interest at the Morgan Guaranty "Published" prime rate at the time of the loan
and repay the principal within 60 months, or 120 months if the loan is for the
purchase of their primary residence. Participants may borrow up to 100% of the
Money Market Fund and 75% of remaining funds, not to exceed 50% of the
participant's vested account balance, but may not borrow from the Corporation
matching portion. Payment in full is required at termination of employment.
There were 2,383 loans outstanding at December 31, 1994.
Although it has no intent to do so, the Corporation may terminate the Plan in
whole or in part at any time. In the event of termination, participants become
fully vested in their accounts.
The number of participants in each fund was as follows:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Money Market Fund 2,818 2,549 2,657
Fixed Income Fund 4,382 3,818 3,734
Equity Growth & Income Fund 5,603 4,665 4,125
Equity Growth Fund 3,999 2,776 3,914
VF Corporation Common Stock Fund 4,839 4,327 1,666
Employee Stock Ownership Plan 7,317 6,214 5,552
</TABLE>
The total number of participants in the Plan was less than the sum of
participants shown above because many were participating in more than one fund.
18
<PAGE> 19
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value. Securities traded on a national
securities exchange are valued at the last reported sales price on the last
business day of the plan year. The ESOP Preferred Stock is stated at fair
value, based on the greater of 80% of the fair value of the Corporation's
common stock or the preferred stock's stated redemption price. For commercial
notes and United States government obligations, the Plan trustee has
established a fair value based on yields currently available on comparable
instruments. The fair value of the participation units owned by the Plan in
mutual funds and bank common trust funds is based on quoted redemption values
on the last business day of the plan year. Unallocated insurance contracts are
valued at contract values as estimated by the insurer. Contract value
represents contributions made under the contract, plus interest at the contract
rate, less funds used to pay the insurance company's administrative expenses.
The changes in the difference between fair value and cost of investments are
reflected as unrealized appreciation or depreciation in fair value of
investments in the statements of changes in net assets available for benefits.
In determining the realized gain or loss on investments sold, the cost of
investments has been determined on the average cost basis for marketable
securities and on the identified cost basis for mutual funds and bank common
trust funds, commercial notes and unallocated insurance contracts.
Administrative expenses consisting primarily of fees for legal, accounting and
other services are paid directly by the Corporation in accordance with the
Plan Agreement and are based on customary and reasonable rates for such
services.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has issued a Favorable Determination Letter dated
May 12, 1987, stating that the Plan qualifies under the appropriate sections of
the Internal Revenue Code (IRC) and is, therefore, not subject to tax under
present income tax law. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. The Pension Plan
Committee is not aware of any action or series of events that have occurred
that might adversely effect the Plan's Qualified Status.
19
<PAGE> 20
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D INVESTMENTS
The net unrealized appreciation (depreciation) in fair value of investments
included in Plan equity is as follows:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation (Depreciation) Fair value
in Fair Value for the Year Ended December 31 at December 31
------------------------------------------------ -----------------------------------------------
1994 1993 1992 1994 1993 1992
------------- ---------------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common Stock $ 215,007 $ (3,612,779) $ 4,831,401 $ 19,295,129 $ 18,219,790 $ 21,206,226
ESOP Preferred Stock 3,812,036 (11,944,828) 22,589,301 78,361,197 75,663,118 88,284,786
Mutual Funds and
bank common trust funds (2,153,697) 2,749,507 (983,494) 46,457,343 38,268,505 28,631,723
------------- ---------------- ------------- -------------- -------------- --------------
1,873,346 (12,808,100) 26,437,208 144,113,669 132,151,413 138,122,735
Fair value as determined by
Plan trustee:
United States government
obligations 15,767,773 13,673,576 11,024,047
Commercial notes (146,268) (12,832) (30,255) 249,552 1,041,341 2,044,427
Mutual funds and
bank common trust funds 1,580,383 621,992 807,326
Unallocated insurance
contracts 0 217,487 206,132
------------- ---------------- ------------- -------------- -------------- --------------
(146,268) (12,832) (30,255) 17,597,708 15,554,396 14,081,932
------------- ---------------- ------------- -------------- -------------- --------------
$ 1,727,078 $(12,820,932) $ 26,406,953 $161,711,377 $147,705,809 $152,204,667
============= ================ ============= ============== ============== ==============
</TABLE>
Unrealized appreciation in fair value of investments at December 31, 1994 and
1993 was $21,770,129 and $20,043,051, respectively.
20
<PAGE> 21
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
The net realized gain on the disposition of investments was as follows:
<TABLE>
<CAPTION>
Year Ended December 31
1994 1993 1992
-------------- -------------- --------------
<S> <C> <C> <C>
Aggregate proceeds $49,419,023 $47,003,365 $42,047,185
Aggregate cost 48,194,516 46,208,519 41,625,614
-------------- -------------- --------------
Net realized gain $ 1,224,507 $ 794,846 $ 421,571
============== ============== ==============
</TABLE>
Of the net realized gain, $1,041,640, $684,631, and $435,465 related to gains
recognized on the sale of VF Common Stock and the redemption of VF Preferred
Stock for the years ended 1994, 1993, and 1992, respectively.
The fair value of individual investments that represent 5% or more of the
Plan's net assets at December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
ESOP Preferred Stock $78,361,197 $75,663,118
Fidelity Growth & Income Fund 25,189,257 22,264,551
VF Corporation Common Stock 19,295,129 18,219,790
Fidelity Magellan Fund 15,590,208 10,617,124
Kemper Money Market Fund 5,386,830
</TABLE>
21
<PAGE> 22
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Investment held at December 31, 1994:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF ISSUER AND TITLE OF ISSUE OR PRINCIPAL AMOUNT FAIR VALUE COST
--------------------------------- ------------------- ---------- ----
<S> <C> <C> <C>
Securities of participating employer:
VF Corporation Common Stock 396,815 $ 19,295,129 $ 13,824,745
VF Corporation 6.75% Series B ESOP
Convertible Preferred Stock 2,014,427 78,361,197 62,195,433
---------------- ----------------
97,656,326 76,020,178
---------------- ----------------
United States Government Obligations:
Small Business Administration Loans: $ 14,518,471 14,396,787 14,492,120
(Rates of 5.37% to 10.625%),
maturities of 9/15/96 to 2/22/09)
N.O.A.A. loan (rate of 7.975%, matures 1/2/97) $ 149,710 149,583 149,583
F.M.H.A. loans Rates of 6.475% to 9.875%,
maturities of 2/01/96 to 11/15/08) $ 1,212,620 1,221,403 1,221,403
---------------- ----------------
15,767,773 15,863,106
---------------- ----------------
Other Securities;
Mutual funds and bank common trust funds:
Kemper Money Market Fund 5,677,878 5,677,878 5,677,878
Fidelity Growth & Income Fund 1,194,370 25,189,257 24,491,123
Fidelity Magellan Fund 233,386 15,590,208 16,059,937
UMB Bank Funds:
Money Market Account 1,064,205 1,064,205 1,064,205
UMB Prime - I 516,178 516,178 516,178
Deere and Company (Due 1/10/95) $ 250,000 249,552 248,643
---------------- ----------------
48,287,278 48,057,964
---------------- ----------------
$161,711,377 $139,941,248
================ ================
</TABLE>
22
