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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 30, 1995
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:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, without par value, New York Stock Exchange
stated capital $1 per share and
Preferred Stock Purchase Rights Pacific Stock Exchange
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
----- -----
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/
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As of March 1, 1996, 63,595,054 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 $2.8 billion. In addition, 1,964,942
shares of Series B ESOP Convertible Preferred Stock of the registrant were
outstanding and convertible into 1,571,953 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 30, 1995
(Items 1 and 3 in Part I and Items 5, 6, 7 and 8 in Part II).
Portions of the Proxy Statement dated March 15, 1996 for the Annual Meeting of
Shareholders to be held on April 16, 1996 (Item 4A in Part I, Item 9 in Part II
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 high quality branded jeanswear, knitwear, intimate apparel, children's
playwear and other apparel. VF Corporation, organized in 1899, oversees the
operations of its subsidiaries, providing them with financial and
administrative resources. Management of each operating unit is responsible for
the growth and development of its business, within guidelines established by VF
Corporation management. Unless the context indicates otherwise, the term
"Company" used herein means VF Corporation and its subsidiaries.
1995 SPECIAL CHARGES
The Company in late 1995 recorded $155.9 million in special charges to address
changes in consumer buying habits and the increasingly competitive retail
environment that have occurred in the apparel industry. This plan included
expenses for the closings of higher cost manufacturing facilities in each of
the Company's business groups, as well as charges related to actions to reduce
selling and administrative expenses, primarily from personnel reductions at
most domestic and international headquarters locations. See Note M to the
Consolidated Financial Statements on page 30 of the Company's Annual Report to
Shareholders for the fiscal year ended December 30, 1995 ("1995 Annual
Report"), which is incorporated herein by reference.
BUSINESS GROUPS
In 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 growth opportunities to succeed
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 2, 3, 20, 21 and 23 of the 1995
Annual Report, which information is incorporated herein by reference.
JEANSWEAR
The Jeanswear business group is composed of the Lee and the Wrangler divisions
in the United States and in international markets, primarily in Europe. Lee
manufactures jeanswear and other casualwear sold principally under its LEE(R)
and RIDERS(R) trademarks. 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, the final component of the Jeanswear
business group, licenses the MARITHe & FRANCOIS GIRBAUD(R) label to market
branded fashion jeans and casual apparel in the United States.
According to industry data, approximately 471 million pairs of jeans made of
denim, twill, corduroy and other fabrics were sold in the United States in
1995. This same data indicates that the Company currently has the largest
combined share of this market at approximately a 30% share, with WRANGLER,
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RUSTLER and LEE having the second, third and fourth largest unit shares of the
jeans market in the United States, respectively.
The Jeanswear divisions in the United States own and operate numerous cutting,
sewing and laundry facilities. During 1995, 68% of finished garments were
produced in Lee and Wrangler domestic plants and 13% in their sewing facilities
in Mexico and other Caribbean countries; the balance is manufactured by
independent contractors. With the closure of several manufacturing plants as
discussed in "1995 Special Charges", the percentage manufactured in the
Company's domestic facilities is expected to decline. Also during 1995, 64% of
the Company's Jeanswear products in Europe were produced in owned plants in the
United Kingdom, Ireland, Malta and Poland, with the balance (mostly tops)
sourced from independent contractors. During 1995, the Company acquired a
majority interest in its licensee who manufactures and markets LEE brand jeans
in Mexico. 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 distributors, agents or licensees for jeanswear and related products in
foreign markets where they do not have sales operations.
The Lee division markets its LEE brand products through department and
specialty stores. The Lee division's RIDERS brand is 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, a manufacturer of knitted fleecewear and T-shirts. Operations
are vertically integrated and include the entire process of converting cotton
yarn into finished fleece and T-shirt 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 1995, approximately one-third of Bassett-Walker's volume was
knitted fleecewear and T-shirts marketed under the LEE label. 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 1994, the Company substantially increased its position in imprinted apparel
with the acquisitions of Nutmeg Industries, Inc. and H.H. Cutler Company. Both
companies design, manufacture and market imprinted sports apparel under
licenses granted primarily by the four major American professional sports
leagues, NASCAR and other parties. Nutmeg also manufactures and markets
apparel imprinted with professional soccer and other sports logos in Europe.
Nutmeg's adult licensed apparel is distributed through department, sporting
goods and athletic specialty stores. The Cutler Sports Apparel division
products, primarily in children's sizes, are distributed through mass
merchandisers and
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discount stores. Approximately one-third of the products formerly bearing the
NUTMEG(R) label were marketed in 1995 under the new LEE SPORT(TM) label; use of
the LEE SPORT label will be expanded in 1996. 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.
During 1995, significant pricing pressures throughout the industry, plus the
Major League Baseball and National Hockey League strikes, adversely affected
both Nutmeg and Cutler. As part of the 1995 Special Charges, a plan was
announced to centralize the licensed sports businesses by combining the
manufacturing and distribution functions of Cutler Sports Apparel with those of
Nutmeg, while retaining their separate merchandising and marketing
organizations. This move is expected to reduce costs and provide a more
focused sports apparel group.
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
intimate apparel under the VASSARETTE(R) brand, which is sold through the
discount channel. Vanity Fair also maintains a rather substantial private
label business. Vanity Fair sells most of its products through its own sales
force. The VANITY FAIR brand name is licensed in several foreign countries.
Since 1992, 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, Tunisia and Madagascar, intimate apparel is marketed in
department and specialty stores under the LOU, BOLERO and SILHOUETTE brand
names primarily in France and under the GEMMA, INTIMA CHERRY and BELCOR brand
names primarily in Spain. Intimate apparel is marketed in discount stores in
France under the VARIANCE, CARINA and SILTEX brand names.
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 in the United States. 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. During
1995, Cutler introduced a line of licensed NIKE(R) brand childrenswear. LEE
and WRANGLER children's sizes are marketed in distribution channels consistent
with their respective adult sizes.
SPECIALTY APPAREL
Red Kap is a leading producer of occupational and career apparel sold primarily
under the RED KAP(R) label. Approximately three-fourths of Red Kap's sales
are to industrial laundries that in turn supply work 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
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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
swimwear and sportswear, including coordinated tops and bottoms, primarily
under the JANTZEN(R) trademark and, beginning in 1995, under the licensed
NIKE(R) label. 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 markets its products in
Canada, and the JANTZEN trademark is licensed to other companies in several
foreign countries.
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. The Company purchases fabric for its
United States operations from several domestic suppliers against scheduled
production and fabric for its international operations from several
international suppliers. The fabric is cut and sewn into finished garments in
the Company's manufacturing facilities or, in certain instances, at independent
contractors. The Company also purchases thread and trim (buttons, zippers,
snaps and lace) from numerous suppliers.
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 has not experienced difficulty in obtaining fabric and other raw
materials to meet production needs during 1995 and does not anticipate
difficulties in 1996. 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 demand peaks have been reduced in recent years as more products are
being sold on a replenishment basis.
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 fleece and
T-shirt products in the second half of the year.
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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. Generally
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 1995, the Company spent $231 million advertising and promoting
its products. A significant portion of the anticipated savings arising from
the 1995 cost reduction initiatives (see "1995 Special Charges") is expected to
be invested in increased advertising and other actions to support and build the
Company's brands.
OTHER MATTERS
COMPETITIVE FACTORS
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 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.
TRADEMARKS AND LICENSES
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 products under the Company's trademarks in product categories
and in geographic areas in which the Company does not operate.
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. Apparel is also manufactured and marketed under licenses granted
by Major League Baseball, the National Basketball
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Association, the National Football League, the National Hockey League, The Walt
Disney Company, NIKE, Inc. and others. 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.
CUSTOMERS
The Company's customers are primarily department, discount and specialty stores
in the United States and in international markets, primarily in Europe. Sales
to Wal-Mart Stores, Inc. totaled 10.5% of total sales in 1995. Sales to the
Company's ten largest customers amounted to 35% of total sales in 1995 and 34%
in 1994.
EMPLOYEES
The Company employs approximately 64,000 men and women. Approximately 6,000
employees are covered by various collective bargaining agreements. Employee
relations are considered to be good. See Note M to the Consolidated Financial
Statements on page 30 of the 1995 Annual Report, which is incorporated herein
by reference.
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 being
utilized at the end of 1995 are summarized below for the Company's business
groups:
<TABLE>
<CAPTION>
Square
Business Group Footage
----------------- ------------
<S> <C>
Jeanswear 7,574,000
Decorated Knitwear 5,150,000
Intimate Apparel 2,517,000
Playwear 1,256,000
Specialty Apparel 2,495,000
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18,992,000
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</TABLE>
In addition, the Company owns or leases various administrative and office
space. The Company also owns or leases facilities having 2,775,000 square feet
of space that is used for factory outlet operations. Approximately 77% 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. Finally, the Company owns facilities having 876,000 square feet of
space formerly used in its operations but now leased to other parties or held
for sale.
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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 25 of the 1995 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, 1996.
The term of office of each of the officers continues to the next annual meeting
of the Board of Directors to be held April 16, 1996. There is no family
relationship among any of the VF Corporation officers.
<TABLE>
<CAPTION>
Period Served
Name Position Age In Such Office(s)
- ---- -------- --- -----------------
<S> <C> <C> <C>
Lawrence R. Pugh Chairman of the Board 63 May 1983 to date
Director February 1980 to date
Mackey J. McDonald President 49 October 1993 to date
Chief Executive Officer January 1996 to date
Director October 1993 to date
Candace S. Cummings Vice President - General 48 January 1995 to date
Counsel
Louis J. Fecile Vice President - Employee 56 December 1995 to date
Benefits
Gerard G. Johnson Vice President - Finance and 55 December 1988 to date
Chief Financial Officer
Daniel G. MacFarlan Chairman - Decorated Knitwear 45 February 1995 to date
and Playwear Coalitions
Vice President April 1995 to date
Frank C. Pickard III Vice President - Treasurer 51 April 1994 to date
John P. Schamberger Chairman - Jeanswear Coalition 47 February 1995 to date
Vice President April 1995 to date
Robert K. Shearer Vice President - Controller 44 April 1994 to date
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Lori M. Tarnoski Vice President 56 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, which position he held until December 1995, 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 2 of the Company's definitive proxy
statement dated March 15, 1996 for the Annual Meeting of Shareholders to be
held on April 16, 1996 ("1996 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, President of the Company
in October 1993 and Chief Executive Officer in January 1996. Additional
information is included in page 2 of the 1996 Proxy Statement.
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. Fecile joined the Company in 1980 and was elected Assistant Treasurer in
1982, Assistant Vice President - Employee Benefits in 1987 and Vice President
- - Employee Benefits in December 1995.
Mr. Johnson joined the Company in 1988 as Vice President - Finance and Chief
Financial Officer.
Mr. MacFarlan joined the Company's Jantzen division in 1978 and served in
various capacities, including Vice President - Womens Casualwear from September
1990 to May 1992 and Senior Vice President - Sales and Womens Casualwear to
July 1993. He served as President of the Company's VF Factory Outlet division
from October 1993 to February 1995. Since November 1994, he has served as
President of the Company's Nutmeg division. He was elected as the Company's
Chairman - Decorated Knitwear and Playwear Coalitions in February 1995 and Vice
President in April 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 and held various
positions including Vice President - New Brands from 1987 to his election as
Vice President - Consumer Marketing in March 1991 and President in May 1992.
He was elected as the Company's Chairman - Jeanswear Coalition in February 1995
and Vice President in April 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 19 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 36 of the 1995 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 32 and 33 of the 1995 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 21, 23 and 25 of the 1995 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 20, 22, 24 and 26
through 31 of the 1995 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Information under the caption "Change in Accountants" on pages 20 and 21 of the
1996 Proxy Statement is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
Information under the caption "Election of Directors" on pages 2 through 5 of
the 1996 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 21 of the 1996 Proxy Statement is incorporated herein by
reference.
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ITEM 11. EXECUTIVE COMPENSATION.
Information on pages 10 through 16 of the 1996 Proxy Statement with regard to
this item is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information under the caption "Certain Beneficial Owners" on page 18 and
"Common Stock Ownership of Management" on page 19 of the 1996 Proxy Statement
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information under the caption "Election of Directors" with respect to Messrs.
Sharp and Hurst on page 13 of the 1996 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 20, 22, 24 and
26 through 31 of the 1995 Annual Report (Exhibit 13) and incorporated
by reference in Item 8:
Consolidated statements of income - - Fiscal years ended December 30,
1995, December 31, 1994 and January 1, 1994
Consolidated balance sheets - - December 30, 1995 and December 31, 1994
Consolidated statements of cash flows - - Fiscal years ended December
30, 1995, December 31, 1994 and January 1, 1994
Consolidated statements of common shareholders' equity - - Fiscal
years ended December 30, 1995, December 31, 1994 and January 1, 1994
Notes to consolidated financial statements
Report of independent accountants
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2. Financial statement schedules - The following
consolidated financial statement schedule is included herein:
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
- ------ -----------
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 January 1, 1996 and as
presently in effect
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)
(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)
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(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 (Incorporated by reference to
Exhibit 10(F) to Form 10-K for the fiscal year ended
December 31, 1994)
(G) First Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for L. R. Pugh (Incorporated by reference to Exhibit
10(G) to Form 10-K for the fiscal year ended December 31,
1994)
(H) Second Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Mid-Career Senior Management (Incorporated by
reference to Exhibit 10(H) to Form 10-K for the fiscal
year ended December 31, 1994)
(I) Third Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Senior Management (Incorporated by reference to
Exhibit 10(I) to Form 10-K for the fiscal year ended
December 31, 1994)
(J) Fourth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Deferred
Compensation Plan (Incorporated by reference to Exhibit
10(J) to Form 10-K for the fiscal year ended December 31,
1994)
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 (Incorporated by reference to Exhibit 10(K) to
Form 10-K for the fiscal year ended December 31, 1994)
(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 (Incorporated by reference to Exhibit 10(L)
to Form 10-K for the fiscal year ended December 31, 1994)
(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 (Incorporated by
reference to Exhibit 10(M) to Form 10-K for the fiscal
year ended December 31, 1994)
(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
(Incorporated by reference to Exhibit 10(Q) to Form 10-K
for the fiscal year ended December 31, 1994)
(R) Executive Incentive Compensation Plan (Incorporated by
reference to Exhibit 10(R) to Form 10-K for the fiscal
year ended December 31, 1994)
(S) Restricted Stock Agreement (Incorporated by reference to
Exhibit 10(S) to Form 10-K for the fiscal year ended
December 31, 1994)
(T) Discretionary Supplemental Executive Bonus Plan (Incorporated
by reference to Exhibit 10(T) to Form 10-K for the fiscal
year ended December 31, 1994)
(U) 1995 Key Employee Restricted Stock Plan
11 Computation of earnings per common share
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of Coopers & Lybrand L.L.P.
23.2 Consents of Ernst & Young LLP
23.3 Report of Ernst & Young LLP
23.4 Report of Coopers & Lybrand L.L.P.
23.5 Report of Ernst & Young LLP
24 Power of attorney
27 Financial data schedule
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged
Savings Plan for Salaried Employees for the year
ended December 31, 1995
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.
15
<PAGE> 16
(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 30, 1995.
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/ Mackey J. McDonald
--------------------------
Mackey J. McDonald
President
(Chief Executive Officer)
By: /s/ Gerald 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:
Robert D. Buzzell* Director
Edward E. Crutchfield* Director
Ursula F. Fairbairn* Director
Barbara S. Feigin* Director
Roger S. Hillas* Director
Leon C. Holt, Jr.* Director
Robert J. Hurst* Director
Robert F. Longbine* Director March 25, 1996
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 25, 1996
--------------------------------
L. M. Tarnoski, Attorney-in-Fact
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
Description of Period Expenses Describe Period
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Fiscal year ended December 30, 1995:
Allowance for doubtful accounts $32,794 $14,967 $13,140 (A) $34,621
========= ========= ========= =========
Valuation allowance for deferred
income tax assets $10,866 $12,518 $1,230 (B) $22,154
========= ========= ========= =========
Fiscal year ended December 31, 1994:
Allowance for doubtful accounts $28,808 $11,274 $7,288 (A) $32,794
========= ========= ========= =========
Valuation allowance for deferred
income tax assets $6,733 $4,203 $70 (B) $10,866
========= ========= ========= =========
Fiscal year ended January 1, 1994:
Allowance for doubtful accounts $30,275 $9,146 $10,613 (A) $28,808
========= ========= ========= =========
Valuation allowance for deferred
income tax assets $6,733 (C) $6,733
========= =========
</TABLE>
(A) Deductions include accounts written off, net of recoveries, and in 1994
net of additions of $2.4 million from the acquisition of subsidiaries.
(B) Deduction relates to circumstances where it is more likely than not that
deferred tax assets will be realized.
(C) Adoption of FASB Statement No. 109, "Accounting for Income Taxes."
<PAGE> 19
VF BUSINESS GROUPS/1995 HIGHLIGHTS
Jeanswear
PRODUCT PORTFOLIO: Jeans, casual pants, knit and woven shirts.
HIGHLIGHTS: 1995 sales up 5%. VF owns 3 of the top 4 jeans brands in the U.S.,
with a total unit market share of approximately 30%. Wrangler and Riders
brands continue to expand with national discounters. Lee commences aggressive
marketing campaign to drive share gains. Girbaud positioned as focused, niche
brand in premium jeans category. Lee, Wrangler and Maverick brands exhibiting
healthy growth internationally, driven by authentic American heritage.
STRATEGY: Global brand leadership.
Intimate Apparel
PRODUCT PORTFOLIO: Bras, panties, daywear, shapewear, robes and sleepwear.
HIGHLIGHTS: Sales flat in 1995. Vanity Fair brand continues as a market leader
in department stores with its broad array of products. Excellent performance
by Vassarette in discount channel. Accelerating move to offshore production to
improve competitive position. European brands maintaining strong market
positions and benefiting from consolidation and reorganization.
STRATEGY: Global brand leadership.
Decorated Knitwear
PRODUCT PORTFOLIO: Basic fleece and T-shirts used in private label and screen
print programs, and products decorated with names and logos of sports and
college teams.
HIGHLIGHTS: Sales flat in 1995. Bassett-Walker exhibits modest growth despite
volatile pricing environment and high raw material costs. Licensed sports
apparel market remains difficult, affecting Nutmeg's and Cutler's sales, but
focus on service and cost control starting to pay off.
STRATEGY: Focus on value-added, decorated products.
Playwear
PRODUCT PORTFOLIO: Branded and licensed character playwear and sleepwear, denim
and related youthwear.
HIGHLIGHTS: 1995 sales flat with 1994 levels. Childrenswear category at retail
generally weak, but Healthtex brand gaining market share. Good demand for
Cutler's licensed playwear featuring characters from Disney's Pocahontas, and
for new Nike licensed brand youthwear. Continued growth in Lee and Wrangler
youthwear businesses.
STRATEGY: Expand market share and distribution in fragmented market.
<PAGE> 20
Specialty Apparel
PRODUCT PORTFOLIO: Red Kap occupational apparel, JanSport daypacks and
equipment, Jantzen swimwear and sportswear.
HIGHLIGHTS: Sales down 5%. Jantzen, leader in swimwear, expanding reach with
Nike licensed and Bolero brands. JanSport remains dominant force in daypacks,
while Red Kap leads with exceptional service capability.
STRATEGY: Focus on product line extensions and highest margin opportunities.
<PAGE> 21
MULTIPLE BRANDS/MULTIPLE DISTRIBUTION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Channel of Intimate Decorated Specialty
Distribution Jeanswear Apparel Knitwear Playwear Apparel
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Department Lee Vanity Fair Lee Sport Healthtex JanSport
Marithe & Nutmeg Lee Jantzen
Francois Nike* Bolero
Girbaud*
- -----------------------------------------------------------------------------------------------
Discount Wrangler Vassarette Cutler Sports Cutler Wolf Creek
Riders Wrangler Big Ben
Rustler
Timber Creek
- -----------------------------------------------------------------------------------------------
Specialty Wrangler Nutmeg JanSport
Western JanSport Nike*
Rugged Wear Red Kap
- -----------------------------------------------------------------------------------------------
International Lee Lou Nutmeg
Wrangler Bolero
Maverick Carina
Variance
Siltex
Belcor
Intima Cherry
Gemma
Vanity Fair
- -----------------------------------------------------------------------------------------------
</TABLE>
* licensed
<PAGE> 22
VF Corporation
Index to Exhibits
Number Description
- ------ -----------
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 January 1, 1996 and as
presently in effect
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)
(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)
<PAGE> 23
(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 (Incorporated by reference to
Exhibit 10(F) to Form 10-K for the fiscal year ended
December 31, 1994)
(G) First Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for L. R. Pugh (Incorporated by reference to Exhibit
10(G) to Form 10-K for the fiscal year ended December 31,
1994)
(H) Second Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Mid-Career Senior Management (Incorporated by
reference to Exhibit 10(H) to Form 10-K for the fiscal
year ended December 31, 1994)
(I) Third Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Senior Management (Incorporated by reference to
Exhibit 10(I) to Form 10-K for the fiscal year ended
December 31, 1994)
(J) Fourth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Deferred
Compensation Plan (Incorporated by reference to Exhibit
10(J) to Form 10-K for the fiscal year ended December 31,
1994)
<PAGE> 24
(K) Fifth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan which funds certain benefits upon a Change in
Control (Incorporated by reference to Exhibit 10(K) to
Form 10-K for the fiscal year ended December 31, 1994)
(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 (Incorporated by reference to Exhibit 10(L)
to Form 10-K for the fiscal year ended December 31, 1994)
(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 (Incorporated by
reference to Exhibit 10(M) to Form 10-K for the fiscal
year ended December 31, 1994)
(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
(Incorporated by reference to Exhibit 10(Q) to Form 10-K
for the fiscal year ended December 31, 1994)
(R) Executive Incentive Compensation Plan (Incorporated by
reference to Exhibit 10(R) to Form 10-K for the fiscal
year ended December 31, 1994)
(S) Restricted Stock Agreement (Incorporated by reference to
Exhibit 10(S) to Form 10-K for the fiscal year ended
December 31, 1994)
(T) Discretionary Supplemental Executive Bonus Plan (Incorporated
by reference to Exhibit 10(T) to Form 10-K for the fiscal
year ended December 31, 1994)
(U) 1995 Key Employee Restricted Stock Plan
11 Computation of earnings per common share
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of Coopers & Lybrand L.L.P.
23.2 Consents of Ernst & Young LLP
23.3 Report of Ernst & Young LLP
23.4 Report of Coopers & Lybrand L.L.P.
23.5 Report of Ernst & Young LLP
24 Power of attorney
27 Financial data schedule
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged
Savings Plan for Salaried Employees for the year
ended December 31, 1995
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
Exhibit 3(D)
==============================================================================
VF CORPORATION
BY-LAWS
Effective January 1, 1996
==============================================================================
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
ARTICLE I - MEETINGS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Place of Meeting . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Special Meetings . . . . . . . . . . . . . . . . . . . . . . 1
Section 4. Adjournment . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . 2
Section 6. Quorum of Shareholders . . . . . . . . . . . . . . . . . . . 2
Section 7. Organization . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 8. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) Voting Rights . . . . . . . . . . . . . . . . . . . . . . 2
(b) Proxies . . . . . . . . . . . . . . . . . . . . . . . . . 2
(c) Ballot . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Required Vote . . . . . . . . . . . . . . . . . . . . . . 3
(e) Shares Owned by the Corporation . . . . . . . . . . . . . 3
(f) Shares Owned by Other Corporations . . . . . . . . . . . . 3
(g) Shares Jointly Held or Held by Fiduciaries . . . . . . . . 3
(h) Use of Conference Telephone and
Similar Equipment . . . . . . . . . . . . . . . . . . 4
Section 9. Judges of Election . . . . . . . . . . . . . . . . . . . . . 4
Section 10. Determination of Shareholders of Record . . . . . . . . . . . 4
Section 11. Voting Lists . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 12. Nominating Procedure . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II - BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1. Powers and Election . . . . . . . . . . . . . . . . . . . . 6
Section 2. Qualifications . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Number, Classification, and Term of Office . . . . . . . . . 7
Section 4. Resignations . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 7. Place of Meeting . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . 8
Section 9. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Special Meetings . . . . . . . . . . . . . . . . . . . . . . 8
Section 11. Notice of Meetings; Adjournment . . . . . . . . . . . . . . . 8
Section 12. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 13. Organization . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 14. Action Without a Meeting or By Conference
Telephone or Similar Communications Equipment . . . . . . 9
Section 15. Compensation of Directors . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE III - COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1. Executive Committee . . . . . . . . . . . . . . . . . . . . . 9
Section 2. Other Committees . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV - NOTICE - WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1. Notice - What Constitutes . . . . . . . . . . . . . . . . . . 10
Section 2. Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. Waiver by Attendance . . . . . . . . . . . . . . . . . . . . 10
Section 4. Notice Not Required . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V - OFFICERS AND AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Qualifications . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3. Election and Term of Office . . . . . . . . . . . . . . . . . 11
Section 4. Resignations . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5. Removal of Officers . . . . . . . . . . . . . . . . . . . . . 11
Section 6. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7. The Chairman of the Board of Directors . . . . . . . . . . . 12
Section 8. The President . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. The Vice Presidents . . . . . . . . . . . . . . . . . . . . . 12
Section 10. The Secretary . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Assistant Secretaries . . . . . . . . . . . . . . . . . . . . 12
Section 12. The Treasurer . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 13. Assistant Treasurers . . . . . . . . . . . . . . . . . . . . 13
Section 14. The Controller . . . . . . . . . . . . . . . . . . . . . . . 13
Section 15. Compensation of Officers and Others . . . . . . . . . . . . . 13
Section 16. Agents and Employees . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI - BORROWING, DEPOSITS, PROXIES, ETC. . . . . . . . . . . . . . . . . . 14
Section 1. Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2. Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4. Execution of Instruments . . . . . . . . . . . . . . . . . . 14
ARTICLE VII - CORPORATE RECORDS - INSPECTION . . . . . . . . . . . . . . . . . . 14
Section 1. Records to be Kept . . . . . . . . . . . . . . . . . . . . . 14
Section 2. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VIII - SHARE CERTIFICATES, TRANSFER . . . . . . . . . . . . . . . . . . . 15
Section 1. Share Certificates . . . . . . . . . . . . . . . . . . . . . 15
Section 2. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . 15
Section 3. Transfer Agent and Registrar; Regulations . . . . . . . . . . 16
Section 4. Lost, Destroyed, and Mutilated Certificates . . . . . . . . . 16
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IX - FINANCIAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE X - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1. Right to Indemnification . . . . . . . . . . . . . . . . . . 16
Section 2. Advance of Expenses . . . . . . . . . . . . . . . . . . . . . 17
Section 3. Procedure for Determining Permissibility . . . . . . . . . . 17
Section 4. Contractual Obligation. . . . . . . . . . . . . . . . . . . . 17
Section 5. Limitation of Liability . . . . . . . . . . . . . . . . . . . 18
ARTICLE XI - AMENDMENTS TO BY-LAWS . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XII - PROVISIONS RELATING TO THE ACT OF APRIL 27, 1990
(P.L. 129, NO. 36). . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
<PAGE> 5
BY-LAWS
OF
VF CORPORATION
(A Pennsylvania Corporation)
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE OF MEETING. All meetings of the
shareholders of the Corporation shall be held at the office of the Corporation
at 1047 North Park Road, in Wyomissing, Reading, Pennsylvania, or at any other
location as the Board of Directors may determine.
SECTION 2. ANNUAL MEETING. The Annual Meeting of the
shareholders for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held on the
third Tuesday in April in each year, if such day is not a legal holiday, and if
a legal holiday, then on the first following day that is not a legal holiday,
at such place and hour as shall be fixed by the Board of Directors from time to
time. If the Annual Meeting shall not be called and held within six months
after the designated time, any shareholder may call such meeting at any time
thereafter.
SECTION 3. SPECIAL MEETINGS. Special meetings of
shareholders may be called at any time by the Chairman, the President, or the
Board of Directors, and may be called by a shareholder only as provided in
Section 2521(b) of the Pennsylvania Business Corporation Law. At any time,
upon written request of any person or persons entitled to call a special
meeting, such request stating the purpose or purposes of such meeting, it shall
be the duty of the Secretary forthwith to call a special meeting of the
shareholders, which, if the meeting is called pursuant to a statutory right,
shall be held at such time as the Secretary may fix, not more than 60 days
after the receipt of the request. If the Secretary shall neglect or refuse to
issue such call, the person or persons making the request may do so.
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SECTION 4. ADJOURNMENT. Adjournment or adjournments of any
annual or special meeting may be taken, including one at which directors are to
be elected, for such period as the shareholders present and entitled to vote
shall direct.
SECTION 5. NOTICE OF MEETINGS. Written notice (conforming to
the provisions of Section 1 of Article IV of these By-Laws) of every meeting of
the shareholders shall be given by the Secretary in the case of an Annual
Meeting, and by or at the direction of the person or persons authorized to call
the meeting in the case of a special meeting, to each shareholder of record
entitled to vote at the meeting, at least 10 days prior to the day named for
the meeting, unless a greater period of notice is by law required in a
particular case.
When a meeting is adjourned, it shall not be necessary to give
any notice of the adjourned meeting or of the business to be transacted at an
adjourned meeting, other than by announcement at the meeting at which such
adjournment is taken, unless the Board of Directors fixes a new record date for
the adjourned meeting.
SECTION 6. QUORUM OF SHAREHOLDERS. A shareholders' meeting
duly called shall not be organized for the transaction of business unless a
quorum is present. The presence, in person or by proxy, of the holders of a
majority of the outstanding shares entitled to cast a vote on the particular
matters to be acted upon shall constitute a quorum. The shareholders present
at a duly organized meeting can continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. If a meeting cannot be organized because a quorum has not attended,
those present may adjourn the meeting to such time and place as they may
determine, but in the case of any meeting called for the election of directors,
those who attend the second of such adjourned meetings, although less than a
quorum as fixed in this Section, shall nevertheless constitute a quorum for the
purpose of electing directors.
SECTION 7. ORGANIZATION. At every meeting of the
shareholders, the Chairman of the Board of Directors, or in his absence, the
President, or, in his absence, a Vice President, shall act as chairman of the
meeting and the Secretary, or in his absence, a person appointed by the
Chairman, shall act as secretary of the meeting.
SECTION 8. VOTING.
(a) VOTING RIGHTS. Except as otherwise provided in the
Articles, or by law, every shareholder of record shall have the right, at every
shareholders' meeting, to one vote for every share standing in his name on the
books of the Corporation. Holders of fractional shares shall not be entitled
to any vote in respect thereof. Every shareholder may vote either in person or
by proxy.
(b) PROXIES. Every proxy shall be executed in writing by
the shareholder, or by his duly authorized attorney in fact, and filed with the
Secretary of the Corporation. A proxy, unless coupled with an interest, shall
be revocable at will,
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notwithstanding any other agreement or any provision in the proxy to the
contrary, but the revocation of a proxy shall not be effective until notice
thereof has been given to the Secretary of the Corporation. No unrevoked proxy
shall be valid after three years from the date of its execution, unless a
longer time is expressly provided therein. A proxy shall not be revoked by the
death or incapacity of the maker unless before the vote is counted or the
authority is exercised, written notice of such death or incapacity is given to
the Secretary of the Corporation. A shareholder shall not sell his vote or
execute a proxy to any person for any sum of money or anything of value.
(c) BALLOT. No vote by the shareholders need be by
ballot, except, in elections of directors, upon demand made by a shareholder
entitled to vote at the election before the voting begins.
(d) REQUIRED VOTE. Except as otherwise specified in the
Articles, these By-Laws or provided by law, all matters shall be decided by the
vote of the holders of a majority of the of shares cast at a meeting at which a
quorum shall be present, though such majority be less than a majority of all
the outstanding shares entitled to vote thereon. The shareholders present at a
duly organized meeting can continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. In all elections for directors, the candidate receiving the highest
number of votes up to the number of directors to be elected shall be elected.
(e) SHARES OWNED BY THE CORPORATION. Shares of its own
capital stock belonging to the Corporation (other than shares of its own
capital stock, if any, held by it in a fiduciary capacity) shall not be voted,
directly or indirectly, at any meeting, and shall not be counted in determining
the total number of outstanding shares for voting purposes at any given time.
(f) SHARES OWNED BY OTHER CORPORATIONS. Shares in this
Corporation owned by another corporation may be voted by any officer or agent
of the latter or by proxy appointed by any such officer or agent, unless some
other person, by resolution of its Board of Directors or a provision of its
Articles or By-Laws, a copy of which resolution or provision certified to be
correct by one of its officers has been filed with the Secretary of this
Corporation, shall be appointed its general or special proxy, in which case
such person shall be entitled to vote such shares.
(g) SHARES JOINTLY HELD OR HELD BY FIDUCIARIES. Shares
in this Corporation held by two or more persons jointly or as tenants in
common, as fiduciaries or otherwise (including a partnership), may be voted by
any one or more of such persons, either in person or by proxy. If the persons
are equally divided upon whether the shares held by them shall be voted or upon
the manner of voting the shares, the voting of the shares shall be divided
equally among the persons without prejudice to the rights of the joint owners
or the beneficial owners thereof among themselves. If there has been filed
with the Secretary of the Corporation a copy, certified by an attorney at law
to be correct, of the relevant portions of the agreement under which the shares
are
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held or the instrument by which the trust or estate was created or the order of
court appointing them or of an order of court directing the voting of the
shares, the persons specified as having such voting power in the latest
document so filed, and only those persons, shall be entitled to vote the shares
but only in accordance therewith.
(h) USE OF CONFERENCE TELEPHONE AND SIMILAR EQUIPMENT.
Unless specifically authorized by the Board of Directors, no shareholder may
participate in any meeting of shareholders by means of conference telephone or
similar communications equipment.
SECTION 9. JUDGES OF ELECTION. In advance of any meeting of
shareholders, the Board of Directors may appoint Judges of Election, who need
not be shareholders, to act at such meeting or any adjournment thereof. If
Judges of Election be not so appointed, the Chairman of any such meeting may,
and on the request of any shareholder or his proxy shall, make such appointment
at the meeting. The number of Judges shall be one or three. If appointed at a
meeting on the request of one or more shareholders or proxies, the majority of
shares present and entitled to vote shall determine whether one or three Judges
are to be appointed. No person who is a candidate for office shall act as a
Judge.
In case any person appointed as Judge fails to appear or fails
or refuses to act, the vacancy may be filled by appointment made by the Board
of Directors in advance of the convening of the meeting, or at the meeting by
the person or officer acting as Chairman.
The Judges of Election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, the authenticity, validity, and effect of
proxies, receive votes or ballots, hear and determine all challenges and
questions in any way arising in connection with the right to vote, count and
tabulate all votes, determine the result, and do such acts as may be proper to
conduct the election or vote with fairness to all shareholders. The Judges of
Election shall perform their duties impartially, in good faith, to the best of
their ability, and as expeditiously as is practical. If there be three Judges
of Election, the decision, act, or certificate of a majority shall be as
effective in all respects as the decision, act, or certificate of all.
On the request of the Chairman of the meeting, or of any
shareholder or his proxy, the Judges shall make a report in writing of any
challenge or question or matter determined by them, and execute a certificate
of any fact found by them. Any report or certificate made by them shall be
prima facie evidence of the facts as stated therein.
SECTION 10. DETERMINATION OF SHAREHOLDERS OF RECORD. The
Board of Directors may fix a time prior to the date of any meeting of
shareholders, or prior to any other date, including, but not limited to, the
date fixed for the payment of any dividend or distribution, as a record date
for the determination of the shareholders entitled to
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notice of, and to vote at, any such meeting or entitled to receive payment of
any such dividend or distribution or as a record date for any other purpose.
In the case of a meeting of shareholders, the record date shall be not more
than 90 days prior to the date of the meeting, except in the case of an
adjourned meeting. Only such shareholders as shall be shareholders of record
on the date so fixed shall be entitled to notice of, and to vote at, such
meeting, or to receive payment of such dividend or distribution, or to such
other rights as are involved, notwithstanding any transfer of any shares on the
books of the Corporation after any record date fixed as aforesaid.
Unless a record date is fixed by the Board of Directors: (1)
the record date for determining shareholders entitled to notice of or to vote
at a meeting of shareholders shall be at the close of business on the tenth day
next preceding the day on which notice is given or, if notice is waived, at the
close of business on the day immediately preceding the day on which the meeting
is held, (2) the record date for determining shareholders entitled to express
consent or dissent to corporate action in writing without a meeting, when prior
action by the Board of Directors is not necessary, shall be the close of
business on the day on which the first written consent or dissent is filed with
the Secretary of the Corporation, and (3) the record date for determining
shareholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
SECTION 11. VOTING LISTS. The officer or agent having charge
of the transfer books for shares of the Corporation shall make a complete list
of the shareholders entitled to vote at the meeting, arranged in alphabetical
order, with the address of and number of shares held by each, which list shall
be produced and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole time of the
meeting. The original share ledger or transfer book, or a duplicate thereof
kept in the Commonwealth of Pennsylvania, shall be prima facie evidence as to
who are the shareholders entitled to examine such list or share ledger or
transfer book, or to vote, in person or by proxy, at any meeting of
shareholders. Notwithstanding the foregoing, at any time when the Corporation
has 5,000 or more shareholders, in lieu of making a list, the Corporation may
make such information available at the meeting by any other means.
SECTION 12. NOMINATING PROCEDURE. Subject to the rights of
any class or series of stock having a preference over the common stock as to
dividends or upon dissolution to elect directors under specified circumstances,
nominations for election of directors may be made by any shareholder entitled
to vote for the election of directors only if written notice of such
shareholder's intent to nominate a director at the meeting is given by the
shareholder and received by the Secretary of the Corporation in the manner and
within the time specified herein. Notice must be received by the Secretary of
the Corporation not less than 150 days prior to the date fixed for the annual
meeting of shareholders pursuant to these By-Laws; provided, however, that if
directors are to be elected by the shareholders at any other time, notice must
be received by the Secretary of the Corporation not later than the seventh day
following the day on which notice of the meeting was first mailed to
shareholders. The notice may either be
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delivered or may be mailed to the Secretary of the Corporation by certified or
registered mail, return receipt requested.
The notice shall be in writing and shall contain:
(i) the name and residence of such shareholder;
(ii) a representation that the shareholder is a holder of
voting stock of the Corporation and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice;
(iii) such information regarding each nominee as would have
been required to be included in a proxy statement filed pursuant to Regulation
14A of the rules and regulations established by the Securities and Exchange
Commission under the Securities Exchange Act of 1934 (or pursuant to any
successor act or regulation) had proxies been solicited with respect to such
nominee by the management or Board of Directors of the Corporation.
(iv) a description of all arrangements or understandings
among the shareholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which such nomination or nominations are to
be made by the shareholders; and
(v) the consent of each nominee to serve as director of
the Corporation is so election.
The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that any nomination made at the meeting
was not made in accordance with the foregoing procedures and, in such event,
the nomination shall be disregarded.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. POWERS AND ELECTION. The business and affairs of
the Corporation shall be managed by the Board of Directors, and all powers of
the Corporation, except as otherwise provided by law, by the Articles, or by
these By-Laws, shall be exercised by the Board of Directors.
Except in the case of vacancies, directors shall be elected by
the shareholders.
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SECTION 2. QUALIFICATIONS. Directors shall be natural
persons of full age but need not be residents of the Commonwealth of
Pennsylvania or shareholders in the Corporation. A director may also be a
salaried officer or employee of the Corporation. No person shall be eligible
to be elected a director of the Corporation for a period extending beyond the
Annual Meeting of Shareholders immediately following his attaining the age of
70 years. If any person elected as a director shall within 30 days after
notice of his election fail to accept such office, either in writing or by
attending a meeting of the Board of Directors, the Board of Directors may
declare his office vacant.
SECTION 3. NUMBER, CLASSIFICATION, AND TERM OF OFFICE. The
number of directors of the Corporation shall be not less than six and may
consist of such larger number as may be determined from time to time by the
Board of Directors. The Board of Directors shall be divided into three
classes, each class of which shall be as nearly equal in number as possible,
the term of office of at least one class shall expire in each year, and the
members of a class shall not be elected for a shorter period than one year, or
for a longer period than three years. One-third (or the nearest approximation
thereto) of the number of the Board of Directors, determined as aforesaid,
shall be elected at each Annual Meeting of the shareholders for terms to expire
at the third subsequent meeting of shareholders at which directors are elected.
Each director shall hold office for the term for which he is elected and until
his successor shall have been elected and qualified, subject to earlier
termination as herein provided.
SECTION 4. RESIGNATIONS. Any director of the Corporation may
resign at any time by giving written notice to the Board of Directors, to the
Chairman, to the President, or to the Secretary of the Corporation. Such
resignation shall take effect at the date of the receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 5. REMOVAL. The entire Board of Directors, or a
class of the Board, or any individual director may be removed from office by
the vote of shareholders entitled to cast at least 80% of the votes which all
shareholders would be entitled to cast at any election of directors or of such
class of directors only for cause. In case the Board or such a class of the
Board or any one or more directors be so removed, new directors may be elected
at the same meeting. The repeal of a provision of the Articles or By-Laws
prohibiting, or the addition of a provision to the Articles or By-Laws
permitting, the removal by the shareholders of the Board, a class of the Board
or a director without assigning any cause shall not apply to any incumbent
director during the balance of the term for which he was elected.
SECTION 6. VACANCIES. Vacancies in the Board of Directors,
whether occurring because of death, resignation, removal, increase in the
number of directors, or because of some other reason, may be filled by a
majority of the remaining members of the Board, though less than a quorum. Any
director chosen to fill a vacancy, including a vacancy resulting from an
increase in the number of directors, shall hold office until the next election
of the class for which such director has been chosen, and
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until his successor has been selected and qualified or until his earlier death,
resignation or removal.
SECTION 7. PLACE OF MEETING. The meetings of the Board of
Directors may be held at such place, within the Commonwealth of Pennsylvania or
elsewhere, as a majority of the directors may from time to time determine, or
as may be designated in the notice calling the meeting.
SECTION 8. ANNUAL MEETING. Immediately after each annual
election of directors the Board of Directors shall meet for the purpose of
organization, election of officers, and the transaction of other business, at
the place where such election of directors was held. Notice of such meeting
need not be given. In the absence of a quorum at said meeting, the same may be
held at any other time or place which shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
SECTION 9. REGULAR MEETINGS. Regular meetings of the Board
of Directors shall be held at such time and place, if any, as shall be
designated from time to time by resolution of the Board of Directors. If the
date fixed for any such regular meeting be a legal holiday under the laws of
the State where such meeting is to be held, then the same shall be held on the
next succeeding secular day not a legal holiday under the laws of said State,
or at such other time as may be determined by resolution of the Board of
Directors. At such meetings the directors shall transact such business as may
properly be brought before the meeting.
SECTION 10. SPECIAL MEETINGS. Special meetings of the Board
of Directors may be called by the Chairman of the Board of Directors, by the
President, or by a majority of the directors, and shall be held at such time
and place as shall be designated in the call for the meeting.
SECTION 11. NOTICE OF MEETINGS; ADJOURNMENT. Notice, in
accordance with the provisions of Article IV, Section 1 of these By-Laws, of
each special meeting shall be given, by or at the direction of the person
authorized to call such meeting, to each director, at least six hours prior to
the commencement of the meeting. Notice of regular meetings need not be given.
When a meeting is adjourned, it shall not be necessary to give any notice of
the adjourned meeting, or of the business to be transacted at an adjourned
meeting, other than by a an announcement at the meeting at which such
adjournment is taken.
SECTION 12. QUORUM. A majority of the directors in office
shall be necessary to constitute a quorum for the transaction of business, and
the acts of a majority of the directors present at a meeting at which a quorum
is present shall be the acts of the Board of Directors.
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SECTION 13. ORGANIZATION. At every meeting of the Board of
Directors, the Chairman of the Board of Directors, or in his absence, the
President, or, in his absence, a Vice President, or, in the absence of each
Vice President, a chairman chosen by a majority of the directors present, shall
preside, and the Secretary, or, in his absence, any person appointed by the
chairman, shall act as secretary.
SECTION 14. ACTION WITHOUT A MEETING OR BY CONFERENCE
TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. Any action which may be taken
at a meeting of the directors or any Board committee may be taken without a
meeting if a consent in writing setting forth the action so taken shall be
signed by all of the directors or the members of the committee, as the case may
be, and shall be filed with the Secretary of the Corporation. One or more
directors may participate in a meeting of the Board or of any Board committee
by means of conference telephone or similar communications equipment by means
of which all persons participating in the meeting can communicate with each
other.
SECTION 15. COMPENSATION OF DIRECTORS. Each director who is
not a salaried officer or employee of the Corporation or its subsidiaries shall
be compensated for his services as a member of the Board or any committee
thereof in such manner as the Board of Directors by resolution shall from time
to time provide. Directors shall also be reimbursed by the Corporation for all
reasonable expenses incurred in travelling to and from the place of each
meeting of the Board of Directors or any such committee.
ARTICLE III
COMMITTEES
SECTION 1. EXECUTIVE COMMITTEE. The Board of Directors may,
by resolution adopted by a majority of the whole Board, delegate the Chairman
of the Board, and one or more additional directors to constitute an Executive
Committee which, to the extent provided in such resolution, shall have and
exercise the authority of the Board of Directors in the management of the
business of the Corporation, except that such Executive Committee shall not
have any power or authority as to the following: (i) the submission to
shareholders of any action requiring approval of shareholders under the
Pennsylvania Business Corporation Law; (ii) the creation or filling of
vacancies in the Board of Directors; (iii) the adoption, amendment or repeal of
the By-Laws; (iv) the amendment or repeal of any resolution of the Board that
by its terms is amendable or repealable only by the Board; and (v) action on
matters committed by the By-Laws or resolution of the Board of Directors to
another committee of the Board.
The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors at each regular
meeting.
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SECTION 2. OTHER COMMITTEES. The Board of Directors may, at
any time and from time to time, appoint one or more other committees,
consisting of directors or others, to perform such duties and make such
investigations and reports as the Board of Directors shall by resolution
determine, except that any such committee shall be subject to the same
restrictions on power and authority as the Executive Committee set forth in
Section 1 of this Article III. Such committees shall determine their own
organization and times and places of meeting, unless otherwise directed by such
resolution.
ARTICLE IV
NOTICE - WAIVER
SECTION 1. NOTICE - WHAT CONSTITUTES. Whenever written
notice is required to be given to any person, it may be given to such person,
either personally or by sending a copy thereof by first class or express mail,
postage prepaid, or by telegram (with messenger service specified), telex or
TWX (with answerback received) or courier service, charges prepaid, or by
telecopier, to his address (or to his telex, TWX, telecopier, or telephone
number) appearing on the books of the Corporation, or supplied by him to the
Corporation for the purpose of notice. If the notice is sent by mail,
telegraph, or courier service, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for transmission to such person or in the
case of telex, telecopier, or TWX, when dispatched. If notice of any meeting
is given by telephone, it shall be deemed to have been given when a message is
received by either the person entitled to such notice or a representative
authorized to receive such message. Such notice shall specify the place, day,
and hour of the meeting, and, in the case of a special meeting of shareholders,
the general nature of the business to be transacted.
SECTION 2. WAIVER IN WRITING. Whenever any written notice is
required to be given, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Except in
the case of a special meeting of shareholders, neither the business to be
transacted at nor the purpose of the meeting need be specified in the waiver of
notice of such meeting.
SECTION 3. WAIVER BY ATTENDANCE. The presence of a person,
either in person or by proxy, at any meeting shall constitute a waiver of
notice of such meeting, except where a person attends a meeting for the express
purposes of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting was not lawfully called or convened.
SECTION 4. NOTICE NOT REQUIRED. The giving of notice
required under these By-Laws is not required to be given to any shareholder
with whom the Corporation has been unable to communicate for more than 24
consecutive months, if
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such communications to the shareholder are returned unclaimed or the
shareholder has otherwise failed to provide the Corporation with a current
address. Whenever the shareholder provides the Corporation with a current
address, notice shall be given to that shareholder as required under these
By-Laws.
ARTICLE V
OFFICERS AND AGENTS
SECTION 1. OFFICERS. The officers of the Corporation shall
be a Chairman of the Board of Directors, a President, a Secretary, a Treasurer,
and may include one or more Vice Presidents, one or more Assistant Secretaries,
one or more Assistant Treasurers, a Controller, and such other officers and
assistant officers as the Board of Directors may from time to time determine.
SECTION 2. QUALIFICATIONS. Any two or more offices may be
held by the same person except the offices of President and Secretary. It
shall not be necessary for the officers to be directors. The Board of
Directors may secure the fidelity of any or all of the officers by bond or
otherwise. The officers, other than the Treasurer, shall be natural persons of
full age. The Treasurer shall be either a natural person of full age or a
corporation.
SECTION 3. ELECTION AND TERM OF OFFICE. The officers of the
Corporation shall be elected or appointed by the Board of Directors at its
annual meeting, but the Board of Directors may elect or appoint officers or
fill any vacancies among the officers at any other meeting. Subject to earlier
termination of office as herein provided, each officer shall hold office for
one year and until his successor shall have been duly elected or appointed and
qualified.
SECTION 4. RESIGNATIONS. Any officer may resign at any time
by giving written notice to the Board of Directors, or to the Chairman, or to
the President, or to the Secretary, of the Corporation. Any such resignation
shall take effect at the date of the receipt of such notice or at any later
time specified therein; and unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
SECTION 5. REMOVAL OF OFFICERS. Any officer or agent of the
Corporation may be removed by the Board of Directors with or without cause, but
such removal shall be without prejudice to the contract rights, if any, of the
persons so removed. Election or appointment of an officer or agent shall not
of itself create contract rights.
SECTION 6. VACANCIES. The Board of Directors shall have
power to fill any vacancies in any office occurring from whatever reason.
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SECTION 7. THE CHAIRMAN OF THE BOARD OF DIRECTORS. The
Chairman of the Board of Directors shall serve as Chairman of the Executive
Committee, subject, however, to the control of the Board of Directors. He
shall, if present thereat, preside as Chairman at all meetings of the
shareholders and of the directors. He shall be, ex officio, a member of all
standing committees of the Board of Directors except the Audit, Nominating and
Organization and Compensation Committees. He shall have such other powers and
perform such further duties as may be assigned to him by the Board of
Directors.
SECTION 8. THE PRESIDENT. The President shall be the chief
executive officer of the Corporation and shall have general supervision over
the business and operations of the Corporation, subject, however, to the
control of the Board of Directors. He shall be, ex officio, a member of all
standing committees of the Board of Directors except the Audit, Nominating and
Organization and Compensation Committees.
SECTION 9. THE VICE PRESIDENTS. In the absence or disability
of the President, any Vice President designated by the Board of Directors may
perform all the duties of the President, and, when so acting, shall have all
the powers of, and be subject to all the restrictions upon, the President;
provided, however, that no Vice President shall act as a member of or as
chairman of any special committee of which the President is a member or
chairman by designation or ex officio, except when designated by the Board of
Directors. The Vice Presidents shall perform such other duties as from time to
time may be assigned to them respectively by the Board of Directors, the
Chairman or the President.
SECTION 10. THE SECRETARY. The Secretary shall record all
the votes of the shareholders and of the directors and the minutes of the
meetings of the shareholders and of the Board of Directors in a book or books
to be kept for that purpose; he shall see that notices of meetings of the Board
of Directors and shareholders are given and that all records and reports are
properly kept and filed by the Corporation as required by law; he shall be the
custodian of the seal of the Corporation and shall see that it is affixed to
all documents to be executed on behalf of the Corporation under its seal; he
shall take note in the minutes of a dissent of a director and shall file a
written dissent filed by a director prior to the adjournment of a meeting or
immediately thereafter, and, in general, he shall perform all duties incident
to the office of Secretary, and such other duties as may from time to time be
assigned to him by the Board of Directors, the Chairman or the President.
SECTION 11. ASSISTANT SECRETARIES. In the absence or
disability of the Secretary, any Assistant Secretary may perform all the duties
of the Secretary, and, when so acting shall have all the powers of, and be
subject to all the restrictions upon, the Secretary. The Assistant Secretaries
shall perform such other duties as from time to time may be assigned to them
respectively by the Board of Directors, the Chairman, the President or the
Secretary.
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SECTION 12. THE TREASURER. The Treasurer shall have charge
of all receipts and disbursements of the Corporation and shall have or provide
for the custody of its funds and securities; he shall have full authority to
receive and give receipts for all money due and payable to the Corporation from
any source whatever, and to endorse checks, drafts, and warrants in its name
and on its behalf and to give full discharge for the same; he shall deposit all
funds of the Corporation, except such as may be required for current use, in
such banks or other places of deposit as the Board of Directors may from time
to time designate; and, in general, he shall perform all duties incident to the
office of Treasurer and such other duties as may from time to time be assigned
to him by the Board of Directors, the Chairman or the President.
SECTION 13. ASSISTANT TREASURERS. In the absence or
disability of the Treasurer, any Assistant Treasurer may perform all the duties
of the Treasurer, and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the Treasurer. The Assistant Treasurers
shall perform such other duties as from time to time may be assigned to them
respectively by the Board of Directors, the Chairman, the President or the
Treasurer.
SECTION 14. THE CONTROLLER. The Controller shall be the
accounting officer of the Corporation, shall have the duties and
responsibilities for corporate, general, plant, distribution, and cost
accounting, budgeting, forecasting, financial reporting, systems and
procedures, data processing, taxes, and such other duties as may from time to
time be assigned by the Board of Directors, the Chairman or the President.
SECTION 15. COMPENSATION OF OFFICERS AND OTHERS. The
compensation of all officers shall be fixed from time to time by the Board of
Directors or a Committee thereof or by the Chairman. No officer shall be
precluded from receiving such compensation by reason of the fact that he is
also a director of the Corporation. Additional compensation, fixed as above
provided, may be paid to any officers and/or employees for any year, based on
the success of the operations of the Corporation during such year.
SECTION 16. AGENTS AND EMPLOYEES. The Chairman, the
President or any officer or employee of the Corporation authorized by the
Chairman or the President may appoint or employ such agents and employees as
shall be requisite for the proper conduct of the business of the Corporation,
and may fix their compensation and the terms of their employment; provided that
without the approval of the Board of Directors first had and obtained no agent
or employee shall be appointed or employed under a contract unless it is
terminable by the Corporation on not more than 60 days' notice.
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ARTICLE VI
BORROWING, DEPOSITS, PROXIES, ETC.
SECTION 1. BORROWING, ETC. No officer or officers, agent or
agents, employee or employees of the Corporation shall have any power or
authority to borrow money on its behalf, to pledge its credit, or to mortgage
or pledge its real or personal property, except within the scope and to the
extent of the authority delegated by resolution of the Board of Directors.
Authority may be given by the Board of Directors for any of the above purposes
and may be general or limited to specific instances.
SECTION 2. DEPOSITS. All funds of the Corporation shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies, or other depositaries, as the Board of Directors may approve
or designate, and all such funds shall be withdrawn only upon checks signed by
such one or more officers or employees as the Board of Directors shall from
time to time determine.
SECTION 3. PROXIES. Unless otherwise ordered by the Board of
Directors, any officer of the Corporation may appoint an attorney or attorneys
(who may be or include such officer himself), in the name and on behalf of the
Corporation, to cast the votes which the Corporation may be entitled to cast as
a shareholder or otherwise in any other corporation any of whose shares or
other securities are held by or for the Corporation, at meetings of the holders
of the shares or other securities of such other corporation, or, in connection
with the ownership of such shares or other securities, to consent in writing to
any action by such other corporation, and may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent, and
may execute or cause to be executed in the name and on behalf of the
Corporation and under its seal such written proxies or other instruments as he
may deem necessary or proper in the premises.
SECTION 4. EXECUTION OF INSTRUMENTS. Except as otherwise
authorized by the Board of Directors, any note, mortgage, evidence of
indebtedness, contract, or other instrument of writing, or any assignment or
endorsement thereof, executed or entered into between the Corporation and any
other person, co-partnership, association or corporation, when signed by any
one of the Chairman, the President, a Vice President, the Treasurer and the
Secretary shall be held to have been properly executed for and on behalf of the
Corporation.
ARTICLE VII
CORPORATE RECORDS - INSPECTION
SECTION 1. RECORDS TO BE KEPT. The Corporation shall keep an
original or duplicate record of the proceedings of the shareholders and of the
directors, and a copy of these By-Laws, including all amendments or alterations
thereto, to date,
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certified by the Secretary of the Corporation. It shall also keep at its
registered office, its principal office, or at the office of a Transfer Agent
or Registrar within the Commonwealth of Pennsylvania, an original or a
duplicate share register giving the names of the shareholders, in alphabetical
order, and showing their respective addresses, the number and classes of shares
held by each, the number and date of certificates issued for the shares, and
the number and date of cancellation of every certificate surrendered for
cancellation. It shall also keep appropriate, complete, and accurate books of
records of account, which may be kept at its registered office or at its
principal place of business. Any books, minutes or other records may be in
written form or any other form capable of being converted into written form
within a reasonable time.
SECTION 2. INSPECTION. Every shareholder shall, upon written
verified demand stating the purpose thereof, have a right to examine, in person
or by agent or attorney, at any reasonable time or times, for any proper
purpose, the share register, books or records of account, and records of the
proceedings of the shareholders and directors, and to make copies or make
extracts therefrom.
ARTICLE VIII
SHARE CERTIFICATES, TRANSFER
SECTION 1. SHARE CERTIFICATES. Unless otherwise determined
by the Board of Directors, the shares of the Corporation shall be represented
by share certificates. Share certificates shall contain the matters required
by law, and shall be signed by any one or more of the Chairman of the Board,
the President, a Vice President, the Treasurer and the Secretary. Where such
certificate is signed by a Transfer Agent or a Registrar, the signature of any
corporate officer upon such certificate, and the corporate seal if one is
affixed, may be a facsimile, engraved or printed. In case any officer who has
signed, or whose facsimile signature has been placed upon, any share
certificate shall have ceased to be such officer because of death, resignation,
or otherwise, before the certificate is issued, it may be issued by the
Corporation with the same effect as if the officer had not ceased to be such at
the date of its issue. Every shareholder of record shall be entitled to a
share certificate representing the shares owned by him, but a share certificate
shall not be issued by the Corporation to any shareholder until the shares
represented thereby have been fully paid for. The Board of Directors may
determine that any or all classes and series of shares, or any part thereof,
shall be uncertificated shares, in which case the Corporation shall send to the
registered owner thereof a written notice containing such information as is
required by law.
SECTION 2. TRANSFER OF SHARES. Transfers of share
certificates and the shares represented thereby shall be made only on the books
of the Corporation by the owner thereof, or by his attorney thereunto
authorized, by a power of attorney duly executed and filed with the Secretary
or a Transfer Agent of the Corporation, and on surrender of the share
certificate or certificates. In the case of uncertificated shares,
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the transfer of shares shall be made upon receipt of such documentation as the
Corporation may require.
SECTION 3. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The
Corporation may, if and whenever the Board of Directors may so determine,
maintain in the Commonwealth of Pennsylvania or any other state, or in both,
one or more transfer offices or agencies, each in charge of a Transfer Agent or
Agents designated by the Board of Directors, where the shares of the
Corporation shall be directly transferable, and also one or more registry
offices, each in charge of a Registrar or Registrars designated by the Board of
Directors, where such shares shall be so registered, and no certificates for
shares of the Corporation in respect of which a Transfer Agent and Registrar
shall have been designated shall be valid unless countersigned by such Transfer
Agent and registered by such Registrar. The Board of Directors may also make
such additional rules and regulations as it may deem expedient concerning the
issue, transfer, and registration of share certificates of the Corporation.
SECTION 4. LOST, DESTROYED, AND MUTILATED CERTIFICATES. The
holder of any share certificate of the Corporation shall immediately notify the
Corporation of any loss, destruction, or mutilation thereof, and the Board of
Directors may, in its discretion, by either special or standing resolution,
provide for and cause the issuance to him of a new share certificate or
certificates, in the case of mutilation upon surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon such
proof of loss or destruction and such reasonable notice by publication and/or
the deposit of a bond in such form and in such sum and with such surety or
sureties, as in such resolution the Board of Directors may direct.
ARTICLE IX
FINANCIAL REPORTS
The directors shall cause to be sent to shareholders annual
reports, containing financial statements certified by an independent certified
public accountant, and such other interim reports as may be deemed desirable or
necessary; provided that reports to shareholders shall comply with the
requirements of applicable federal or state securities laws and of the rules
and listing agreements of any national securities exchange where a class of the
Corporation's securities is listed for trading.
ARTICLE X
INDEMNIFICATION; LIMITATION OF LIABILITY
SECTION 1. RIGHT TO INDEMNIFICATION. The Corporation shall
indemnify to the fullest extent permitted by applicable law any person who was
or is a party or is threatened to be made a party to or is otherwise involved
in any threatened, pending or
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completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "Proceeding"), by reason of the fact that such person is or
was a director or officer of the Corporation, or is or was serving at the
request of the corporation as a director or officer of another corporation or
of a partnership, joint venture, trust or other enterprise or entity, whether
or not for profit, whether domestic or foreign, including service with respect
to an employee benefit plan, its participants or beneficiaries, against all
liability, loss and expense (including attorneys' fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by such person in
connection with such Proceeding, whether or not the indemnified liability
arises or arose from any Proceeding by or in the right of the Corporation.
SECTION 2. ADVANCE OF EXPENSES. Subject to Section 3 hereof,
expenses incurred by a director or officer in defending (or acting as a witness
in) a Proceeding shall be paid by the Corporation in advance of the final
disposition of such Proceeding, subject to the provisions of applicable law,
upon receipt of an undertaking by or on behalf of the director or officer to
repay such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation under applicable law.
SECTION 3. PROCEDURE FOR DETERMINING PERMISSIBILITY. To
determine whether any indemnification or advance of expenses under this Article
X is permissible, the Board of Directors by a majority vote of a quorum
consisting of directors who are not parties to such proceeding may, and on
request of any person seeking indemnification or advance of expenses shall,
reasonably determine (i) in the case of indemnification, whether the standards
under applicable law have been met and (ii) in the case of advance of expenses
prior to a change of control of the Corporation as provided below, whether such
advance is appropriate under the circumstance, provided that each such
determination shall be made by independent legal counsel if such quorum is not
obtainable, or even if obtainable, a majority vote of a quorum of directors who
are not parties to the Proceeding so directs; and provided further that, if
there has been a change in control of the Corporation between the time of the
action or failure to act giving rise to the claim for indemnification or
advance of expenses and the time such claim is made, at the option of the
person seeking indemnification or advance of expenses, the permissibility of
indemnification shall be determined by independent legal counsel and the
advance of expenses shall be obligatory subject to receipt of the undertaking
specified in Section 2 hereof. The reasonable expenses of any director or
officer in prosecuting a successful claim for indemnification, and the fees and
expenses of any independent legal counsel engaged to determine permissibility
of indemnification or advance of expenses, shall be borne by the Corporation.
SECTION 4. CONTRACTUAL OBLIGATION. The obligations of the
Corporation to indemnify a director or officer under this Article X, including,
if applicable, the duty to advance expenses, shall be considered a contract
between the Corporation and such director or officer, and no modification or
repeal of any provision of this Article X shall affect, to the detriment of the
director or officer, such obligations of the Corporation in
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connection with a claim based on any act or failure to act occurring before
such modification or repeal.
SECTION 5. LIMITATION OF LIABILITY. A director of the
Corporation shall not be personally liable for monetary damages as such for any
action taken, or any failure to take any action, unless (a) the director has
breached or failed to perform the duties of his office under Section 511 of the
Pennsylvania Associations Code or as such law may be amended from time to time
and (b) the breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness; provided, however, that the provisions of this
Section shall not apply to the responsibility or liability of a director
pursuant to any criminal statute or the liability of a director for the payment
of taxes pursuant to local, state or federal law.
ARTICLE XI
AMENDMENTS TO BY-LAWS
These By-Laws may be amended, altered, or repealed, or new
By-Laws may be adopted, either (a) upon receiving at least 80% of the votes
which all voting shareholders are entitled to cast on the proposed By-Law
change or adoption at any annual or special meeting of shareholders, or (b) in
the event that the proposed By-Law change or adoption has been proposed by a
majority of the Disinterested Directors (as defined below), upon receiving at
least a majority of the votes cast at a duly convened meeting by the holders of
shares entitled to vote on the proposed By-Law change, or (c) by a vote of a
majority of the Disinterested Directors of the Corporation at any regular or
special meeting of the directors.
The term "Disinterested Director" means any member of the
Board of Directors who is unaffiliated with an Interested Shareholder and was a
member of the Board prior to the time that the Interested Shareholder became an
Interested Shareholder, and any successor of a Disinterested Director who is
unaffiliated with the Interested Shareholder and is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors then on the
Board. A member of the Board of Directors who is affiliated with an Interested
Shareholder shall nevertheless be considered a Disinterested Director for the
purpose of voting upon any matter in which the interests of such Interested
Shareholder (or any affiliate or associate of such Interested Shareholder) are
solely as a holder of shares of capital stock and are undifferentiated from the
interests of other holders of the same class of shares of capital stock.
The term "Interested Shareholder" shall mean and include any
individual, corporation, partnership or other person or entity (other than the
Corporation or any subsidiary thereof) who or which, together with its
affiliates and associates (as those terms are defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934 as in effect on October 17, 1989) (a)
becomes the beneficial owner (as that term
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is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934
as in effect on October 17, 1989) of an aggregate of 20% or more of the
outstanding voting stock of the Corporation, (b) is an affiliate or associate
of the Corporation and at any time within the five-year period immediately
prior to the date in question was the beneficial owner, directly or indirectly,
of 20% or more of the voting power of the then outstanding voting stock or (c)
is the beneficial owner of 5% or more of the shares of any class of voting
stock which were at any time within the five-year period immediately prior to
the date in question beneficially owned by any Interested Shareholder;
provided, however, that the term "Interested Shareholder" shall not include any
employee benefit plan of the Corporation or a majority-owned subsidiary of the
Corporation or any trustee or fiduciary with respect to any such plan when
acting in the capacity of a trustee or fiduciary.
A majority of the Disinterested Directors of the Corporation
shall have the power and duty to determine for the purposes of this Article XI,
on the basis of information known to them after reasonable inquiry, (a) whether
a person is an Interested Shareholder or a Disinterested Director, (b) the
number of shares of each class of stock beneficially owned by any person, and
(c) whether a person is an affiliate or associate of another. A majority of
the Disinterested Directors of the Corporation shall have the further power to
interpret all of the terms and provisions of this Article XI.
ARTICLE XII
PROVISIONS RELATING TO THE ACT OF APRIL 27, 1990
(P.L. 129, NO. 36)
The provisions of Subsections (d) through (f) of Section 511,
Subsections (e) through (g) of Section 1721 and Subchapters G and H of Chapter
25 of the Pennsylvania Business Corporation Law shall not be applicable to the
Corporation.
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EXHIBIT 10(U)
VF CORPORATION
1995 KEY EMPLOYEE RESTRICTED STOCK PLAN
1. PURPOSE OF THE PLAN
The purpose of this 1995 Key Employee Restricted Stock Plan
(the "Restricted Stock Plan") is to attract, motivate, and retain outstanding
individuals as key employees of VF Corporation (the "Corporation") and its
Subsidiaries (as hereinafter defined), to align their future interests with
those of the Corporation's shareholders, and to award appropriately those who
make substantial contributions to the success and welfare of the Corporation
and its Subsidiaries.
2. DEFINITIONS
As used herein, the following definitions shall apply:
(a) "Award" shall mean the award of Restricted Stock
under this Restricted Stock Plan.
(b) "Board" shall mean the Board of Directors of the
Corporation.
(c) "Change in Control" shall mean a change in control of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A, as in effect on the Effective Date hereof,
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided that, without limitation, such a Change in Control
shall be deemed to have occurred if (i) any "Person" (as such term is used in
Section 13(d) and Section 14(d) of the Exchange Act), except for (A) those
certain trustees under Deeds of Trust dated August 21, 1951 and under the Will
of John E. Barbey, deceased (a "Trust" or the "Trusts"), and (B) any employee
benefit plan of the Corporation or any Subsidiary, or any entity holding voting
securities of the Corporation for or pursuant to the terms of any such plan (a
"Benefit Plan" or the "Benefit Plans"), is or becomes the beneficial owner,
directly or indirectly, of securities of the Corporation representing 20% or
more of the combined voting power of the Corporation's then outstanding
securities; (ii) there occurs a contested proxy solicitation of the
Corporation's shareholders that results in the contesting party obtaining the
ability to vote securities representing 30% or more of the combined voting
power of the Corporation's then outstanding securities; (iii) there occurs a
sale, exchange, transfer or other disposition of substantially all of the
assets of the Corporation to another entity, except to an entity controlled
directly or indirectly by the Corporation, or a merger, consolidation or other
reorganization of the Corporation in which the Corporation is not the surviving
entity, or a plan of
<PAGE> 2
liquidation or dissolution of the Corporation other than pursuant to bankruptcy
or insolvency laws is adopted; or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Corporation's shareholders, of
each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
Notwithstanding the foregoing, a Change in Control shall not
be deemed to have occurred for purposes of this Restricted Stock Plan (x) in
the event of a sale, exchange, transfer or other disposition of substantially
all of the assets of the Corporation to, or a merger, consolidation or other
reorganization involving the Corporation and officers of the Corporation, or
any entity in which such officers have, directly or indirectly, at least a 5%
equity or ownership interest or (y) in a transaction otherwise commonly
referred to as a "management leveraged buy-out."
Clause (i) above to the contrary notwithstanding, a Change in
Control shall not be deemed to have occurred if a Person becomes the beneficial
owner, directly or indirectly, of securities of the Corporation representing
20% or more of the combined voting power of the Corporation's then outstanding
securities solely as the result of an acquisition by the Corporation or any
Subsidiary of voting securities of the Corporation which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the combined voting power
of the Corporation's then outstanding securities; provided, however, that if a
Person becomes the beneficial owner of 20% or more of the combined voting power
of the Corporation's then outstanding securities by reason of share purchases
by the Corporation or any Subsidiary and shall, after such share purchases by
the Corporation or a Subsidiary, become the beneficial owner, directly or
indirectly, of any additional voting securities of the Corporation, then a
Change in Control of the Corporation shall be deemed to have occurred with
respect to such Person under clause (i). Notwithstanding the foregoing, in no
event shall a Change in Control of the Corporation be deemed to occur under
clause (i) with respect to any Trust or Benefit Plan.
Clauses (i) and (ii) to the contrary notwithstanding, the
Board may, by resolution adopted by at least two-thirds of the directors who
were in office at the date a Change in Control occurred, declare that a Change
in Control described in clause (i) or (ii) has become ineffective for purposes
of this Restricted Stock Plan if the following conditions then exist: (x) the
declaration is made within 120 days of the Change in Control; and
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(y) no Person, except for (A) the Trusts, and (B) the Benefit Plans, either is
the beneficial owner, directly or indirectly, of securities of the Corporation
representing 10% or more of the combined voting power of the Corporation's
outstanding securities or has the ability or power to vote securities
representing 10% or more of the combined voting power of the Corporation's then
outstanding securities. If such a declaration shall be properly made, the
Change in Control shall be ineffective ab initio.
(d) "Committee" shall mean the members of the
Organization and Compensation Committee of the Board who are "outside
directors" 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
Corporation as described in the Corporation's Articles of Incorporation, or
such other stock as shall be substituted therefor.
(f) "Corporation" shall mean VF Corporation, or any
successor to the Corporation, and shall include, where relevant, the Subsidiary
which employs a Key Employee.
(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) "Good Reason" shall mean, unless the Key Employee
shall have consented in writing thereto, any of the following:
(i) a reduction in the Key Employee's
title, duties, responsibilities or status, as compared to such title, duties,
responsibilities or status immediately prior to the Change in Control or as the
same may be increased after the Change in Control;
(ii) the assignment to the Key Employee
of duties inconsistent with the Key Employee's office on the date of the Change
in Control or as the same may be increased after the Change in Control;
(iii) a reduction by the Corporation in
the Key Employee's base salary as in effect immediately prior to the Change in
Control or as the same may be increased after the Change in Control; or a
failure by the Corporation to increase, within twelve
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(12) months of the Key Employee's last increase in annual base salary, his or
her base salary by an amount not less than the greater of (A) 6% or (B) the
average percentage increase in base salary for all officers of the Corporation
during the twelve (12) month period immediately following his or her last
increase in base salary; provided, however, that the Corporation's failure to
increase his or her base salary more than 15% annually shall not constitute
Good Reason under any circumstances;
(iv) a requirement after the Change in
Control that the Key Employee relocate anywhere not mutually acceptable to the
Key Employee and the Corporation if the relocation is to other than the greater
Reading, Pennsylvania area or the imposition on the Key Employee of business
travel obligations substantially greater than his or her business travel
obligations during the year prior to the Change in Control;
(v) the relocation after the Change in
Control of the Corporation's principal executive offices to a location outside
the greater Reading, Pennsylvania area;
(vi) the failure by the Corporation to
continue in effect any material fringe benefit or compensation plan, retirement
plan, life insurance plan, health and accident plan or disability plan,
including but not limited to the Corporation's Executive Incentive Compensation
Plan, Annual Discretionary Management Incentive Compensation Program or other
applicable bonus program, the Amended and Restated Supplemental Executive
Retirement Plan, the Executive Deferred Savings Plan, the Deferred Compensation
Plan, the 1991 Stock Option Plan and this Restricted Stock Plan, in which the
Key Employee is participating at the time of a Change in Control of the
Corporation (or plans providing the Key Employee with substantially similar
benefits), the taking of any action by the Corporation which would adversely
affect the Key Employee's participation in or materially reduce his or her
benefits under any of such plans or deprive the Key Employee of any material
fringe benefit enjoyed by him or her at the time of the Change in Control, or
the failure by the Corporation to provide the Key Employee with the number of
paid vacation days to which he or she is then entitled under (A) the
Corporation's normal vacation policy in effect immediately prior to the Change
in Control or (B) any agreement regarding vacation entitlement which the Key
Employee had with the Corporation immediately prior to the Change in Control,
whichever is greater; or
(vii) the adoption or pursuit by the
Corporation or its management of one or more policies or practices which, in
the sole opinion of the Key Employee, are contrary to the ethics, traditions,
policies or practices of the Corporation as in effect
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immediately prior to the Change in Control.
(i) "Key Employees" shall mean (i) Mackey J. McDonald,
the Corporation's President and Chief Operating Officer ("McDonald"), and (ii)
those other employees of the Corporation or a Subsidiary designated by the
Committee.
(j) "Normal Retirement Date" shall mean the date on which
a Key Employee attains age sixty-five (65).
(k) "Performance Objective" shall mean a performance
objective established pursuant to Subsection 7(b) hereof.
(l) "Restricted Stock" shall mean the Common Stock
awarded to Key Employees under the terms of this Restricted Stock Plan and any
Common Stock purchased with distributions made on the Restricted Stock.
(m) "Restricted Stock Plan" shall mean the VF Corporation
1995 Key Employee Restricted Stock Plan and any amendments thereto.
(n) "Subsidiary" shall mean a corporation with respect to
which the Corporation owns, directly or indirectly through one or more
Subsidiaries, at least 50% of the total voting power, unless the Committee
determines in its discretion that such corporation is not a Subsidiary.
(o) "Termination" shall mean a Key Employee's voluntary
or involuntary cessation of employment with the Corporation and its
Subsidiaries other than by reason of death, permanent disability, attaining his
or her Normal Retirement Date, or Good Reason within thirty-six (36) months
following a Change in Control of the Corporation.
3. STOCK SUBJECT TO THE RESTRICTED STOCK PLAN
The maximum total number of shares of Restricted Stock,
including additional shares purchased with distributions payable on Restricted
Stock, that may be issued under the Restricted Stock Plan shall be Three
Hundred Thousand (300,000) shares (except as such amount may be adjusted in
accordance with the provisions of Subsection 10(b) hereof).
4. ELIGIBILITY AND PARTICIPATION
The Key Employees eligible to receive Awards under this
Restricted Stock Plan shall be (a) McDonald, and (b) those other Key Employees
of the Corporation and its Subsidiaries selected by
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the Committee. Subject to the express provisions hereof, Awards made under the
Restricted Stock Plan in any year shall neither preclude nor require selection
of an Award recipient to receive future Awards or require that the recipient
receive the same amount of Award as at any other time, or as may be received by
any other Award recipient at any time.
5. ADMINISTRATION OF THE RESTRICTED STOCK PLAN
The Restricted Stock Plan shall be administered by the
Committee. Subject to the express provisions hereof, the Committee shall have
sole and complete authority to grant Awards. Such authority shall include, but
not be limited to, selecting Key Employees to receive Awards under the
Restricted Stock Plan, interpreting and administering the Restricted Stock
Plan, determining the number of shares of Common Stock (subject to the
limitations in Section 7 hereof) to be awarded to each Key Employee under the
Restricted Stock Plan, certifying in writing as to attainment of the
Performance Objective(s) during each fiscal year, determining a Key Employee's
permanent disability or death, Normal Retirement Date, Termination, termination
for Good Reason, or whether a Change in Control has occurred for purposes of
this Restricted Stock Plan, and determining the appropriate adjustment(s)
pursuant to Subsection 10(b) hereof.
The decisions of the Committee regarding the Restricted Stock
Plan shall be final. A majority of the Committee members shall constitute a
quorum. The acts of the majority of the members present at any meeting at
which a quorum is present (or acts approved in writing by a majority of the
Committee members) shall be the acts of the Committee regarding the Restricted
Stock Plan.
6. EFFECTIVE DATE
The Effective Date of the Restricted Stock Plan is February
14, 1995, subject to approval of the Restricted Stock Plan by the shareholders
of the Corporation at the annual meeting of shareholders on April 18, 1995.
7. TERMS AND CONDITIONS OF AWARDS OF RESTRICTED STOCK
(a) No later than ninety (90) days after the commencement
of each fiscal year of the Corporation, the Committee, in its sole discretion,
shall establish in writing an Award target for each respective Key Employee for
such fiscal year. Notwithstanding the foregoing, the Award target for McDonald
for each fiscal year from 1995 through 2006 shall be Five Thousand (5,000)
shares of Restricted Stock.
6
<PAGE> 7
(b) No later than ninety (90) days after the commencement
of each fiscal year of the Corporation, the Committee, in its sole discretion,
shall establish with respect to each respective Key Employee one or more
Performance Objectives to be satisfied prior to the grant to such Key Employee
of an Award for such fiscal year. Any Performance Objective shall be comprised
of specified annual corporate, business group or divisional levels of one or
more of the following performance criteria: earnings per share; net earnings;
pre-tax earnings; operating income; net sales; market share; balance sheet
measurements; cash return on assets; book value; shareholder return; and return
on average common equity. In establishing the level of Performance Objective
to be attained, the Committee may disregard or offset the effect of any
extraordinary and/or nonrecurring items. Awards may also be payable, in the
sole discretion of the Committee, when the Corporation's performance, as
measured by one or more of the criteria enumerated in this Subsection 7(b), as
compared to peer companies, equals or exceeds an objective target established
by the Committee not later than ninety (90) days after the commencement of the
fiscal year for which the Award is to be granted.
(c) Notwithstanding attainment of the applicable
Performance Objective(s) or any provision of this Restricted Stock Plan to the
contrary, the Committee shall have the power, in its sole discretion, to
exercise negative discretion to reduce the Award to a Key Employee for any
fiscal year to zero or such other amount as it shall determine.
(d) Notwithstanding any provision of this Restricted
Stock Plan to the contrary, the maximum Award which may be granted for any
fiscal year is Five Thousand (5,000) shares to any Key Employee, exclusive of
additional shares purchased with distributions payable on Restricted Stock.
(e) No Award shall be made to a Key Employee for a fiscal
year prior to written certification by the Committee of attainment of the
Performance Objective(s) applicable to such Key Employee. Upon such
certification by the Committee, the Corporation shall cause to be issued in the
name of each Key Employee entitled to an Award the number of shares of Common
Stock representing such Award.
8. DELIVERY OF RESTRICTED STOCK
(a) If McDonald continuously remains in the employ of the
Corporation or a Subsidiary through December 31, 2005, any shares of Restricted
Stock awarded to McDonald during the years 1996 through 2001 shall be delivered
to McDonald without any restrictions promptly after January 1, 2006, and if
McDonald
7
<PAGE> 8
continuously remains in the employ of the Corporation or a Subsidiary through
December 31, 2007, any shares of Restricted Stock awarded to McDonald during
the years 2002 through 2007 shall be delivered to McDonald without any
restrictions promptly after January 1, 2008, and any shares of Restricted Stock
awarded to McDonald after 2007 shall be delivered to McDonald promptly after
the Award of such shares; provided, however, that in the event of an earlier
termination of McDonald's employment with the Corporation and its Subsidiaries
as a result of his permanent disability or for Good Reason within thirty-six
(36) months following a Change in Control of the Corporation, all restrictions
on Restricted Stock awarded to McDonald prior to such termination shall lapse
and all shares of Common Stock awarded to McDonald pursuant to prior Awards
shall be delivered to McDonald.
(b) If a Key Employee other than McDonald continuously
remains in the employ of the Corporation or a Subsidiary for a period specified
by the Committee, but in no event sooner than December 31 of the ninth (9th)
year following the year with respect to which the initial Award target under
the Restricted Stock Plan is established for such Key Employee, the shares of
Restricted Stock awarded to such Key Employee through such period shall be
delivered to such Key Employee without any restrictions promptly after the
expiration of such period; provided, however, that upon such Key Employee
reaching his or her Normal Retirement Date or in the event of an earlier
termination of the Key Employee's employment with the Corporation and its
Subsidiaries as a result of such Key Employee's permanent disability or for
Good Reason within thirty-six (36) months following a Change in Control of the
Corporation, all restrictions on Restricted Stock awarded to the Key Employee
shall lapse and all shares of Common Stock awarded to the Key Employee pursuant
to prior Awards shall be delivered to the Key Employee.
(c) Stock certificates evidencing the Restricted Stock
awarded to each Key Employee shall be issued in the name of the respective Key
Employee but shall be held and retained by the Corporation until the
restrictions set forth herein shall have lapsed. All such stock certificates
shall bear the following legend:
The shares of V.F. Corporation common stock evidenced by this
certificate are subject to the terms and conditions of the VF
Corporation 1995 Key Employee Restricted Stock Plan; such
shares are subject to forfeiture under the terms of said
Restricted Stock Plan; and such shares shall not be sold,
transferred, assigned, pledged, encumbered or otherwise
8
<PAGE> 9
alienated or hypothecated, except pursuant to the provisions
of said Restricted Stock Plan, a copy of which is available
from V.F. Corporation upon request.
Until the shares of Restricted Stock are delivered without restrictions to the
Key Employee in accordance with the terms of this Restricted Stock Plan, the
Key Employee shall deposit with the Corporation a stock power or other
instrument of transfer or assignment, duly endorsed in blank, with signature
guaranteed, corresponding to each certificate for Restricted Stock or
distributions thereon. If a Key Employee shall fail to provide the Corporation
with any such stock power or other instrument of transfer or assignment, such
Key Employee hereby irrevocably appoints the Secretary of the Corporation as
his or her 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
Corporation.
(d) No Key Employee shall 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 accordance with this Restricted
Stock Plan. Any attempt to effect a Disposition of any shares of Restricted
Stock shall be void ab initio.
9. FORFEITURE
Except as otherwise provided in this Restricted Stock Plan, in
the event of a Key Employee's Termination before completion of the employment
period established pursuant to Section 8 hereof, the shares of Restricted Stock
shall be returned to the Corporation and shall be deemed to have been forfeited
by the Key Employee as of the date of Termination.
10. RIGHTS WITH RESPECT TO RESTRICTED STOCK
(a) Except as otherwise provided in this Restricted Stock
Plan, each Key Employee shall have, with respect to all shares of Restricted
Stock, all the rights of a shareholder of the Corporation, 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 Corporation and
reinvested in additional shares of Common Stock to be issued in the name of the
Key Employee. 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 Restricted Stock Plan. No fractional shares shall be issued
under
9
<PAGE> 10
this Restricted Stock Plan, and any balance of cash distributions on the
Restricted Stock shall be paid to the Key Employee (or his or her
beneficiaries) upon distribution of the Restricted Stock in accordance with the
Restricted Stock Plan.
(b) In the event that there are any changes in the
outstanding Common Stock of the Corporation by reason of stock dividends, stock
splits, or recapitalizations (whether by way of mergers, consolidations,
combinations, or exchanges of shares or the like), the aggregate number and
kind of shares available under the Restricted Stock Plan shall be appropriately
adjusted by the Committee, if necessary, to reflect equitably such change or
changes. Any shares of stock or other securities received by an Award
recipient with respect to shares still subject to the restrictions imposed by
this Restricted Stock Plan will be subject to the same restrictions and shall
be deposited with the Corporation.
11. TAXES
(a) If a Key Employee properly elects, within thirty (30)
days of the date on which an Award is granted, to include in gross income for
federal income tax purposes an amount equal to the fair market value (on the
date of grant of the Award) of the Restricted Stock subject to the Award, the
Key Employee shall make arrangements satisfactory to the Committee to pay to
the Corporation in the year of such Award any federal, state or local taxes
required to be withheld with respect to such shares. If the Key Employee shall
fail to make such tax payments as are required, the Corporation shall, to the
extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Key Employee any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock subject to
such Award.
(b) If the Key Employee does not make the election
described in Subsection 11(a) above, the Key Employee shall, no later than the
date as of which the restrictions referred to in Section 8 hereof shall lapse,
pay to the Corporation, 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 subject to such Award, and the
Corporation shall, to the extent permitted by law, have the right to deduct
from any payment of any kind otherwise due to the Key Employee any federal,
state or local taxes of any kind required by law to be withheld with respect to
the Restricted Stock subject to such Award.
10
<PAGE> 11
12. DELIVERY UPON DEATH
In the event of a Key Employee's death prior to the date as of
which the restrictions referred to in Section 8 hereof shall lapse, any shares
of Restricted Stock shall be delivered, without continuance of any restrictions
provided for in this Restricted Stock Plan, to the beneficiary or beneficiaries
designated by the Key Employee in writing delivered to the Corporation, or, if
such beneficiary or beneficiaries are then deceased or if the Key Employee has
not so designated any beneficiary, such shares shall be delivered to the
executor or administrator of the Key Employee's estate.
13. SECURITIES AND OTHER LAWS
In any case where, in the opinion of the Committee, the issue
and/or delivery of shares of Common Stock under the Restricted Stock Plan would
violate requirements of federal or state securities or other laws, or the
requirements of any exchange on which the securities are listed, the
Corporation shall be entitled to postpone such issue and/or delivery until such
requirements have been met. The Committee may require representations and
agreements from any Key Employee in order to ensure compliance with federal or
state securities or other laws.
14. AMENDMENTS AND TERMINATION
Except as otherwise provided in this Section 14, the
Restricted Stock Plan or any portion hereof may be amended, modified or
suspended at any time and from time to time, or terminated by the Committee.
No amendment, modification, suspension or termination shall adversely affect
the terms and conditions of prior Awards without the written consent of the Key
Employee, except that the Restricted Stock Plan may be amended, modified or
suspended without the consent of any Key Employee in order to conform to
changes in or restrictions or limitations imposed by securities or tax laws or
regulations, or any other laws or regulations deemed by the Committee to be
binding on the Restricted Stock Plan. Notwithstanding any other provision of
this Restricted Stock Plan, no amendment or modification shall be effective
without the approval of the shareholders of the Corporation if such shareholder
approval is required to preserve the Corporation's federal income tax deduction
for Awards under this Restricted Stock Plan pursuant to the "other
performance-based compensation" exception in Section 162(m)(4)(C) of the Code,
or a successor provision.
11
<PAGE> 12
15. MISCELLANEOUS
(a) No Right to Employment - The grant of an Award shall
not be construed as giving a Key Employee the right to be retained in the
employ of the Corporation or any Subsidiary, nor affect in any way the right of
the Corporation or any Subsidiary to terminate such employment at any time,
with or without cause.
(b) No Limit on Other Compensation Arrangements - Nothing
contained in this Restricted Stock Plan shall preclude the Corporation or any
Subsidiary 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 the Restricted
Stock Plan or any Award is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction or would disqualify the Restricted Stock Plan
or any Award under any law deemed applicable by the 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 sole discretion of the
Committee, materially altering the purpose or intent of the Restricted Stock
Plan and any Award hereunder, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Restricted Stock Plan or any
such Award shall remain in full force and effect.
(d) No Trust or Fund Created - Neither the Restricted
Stock Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or fiduciary relationship between the Corporation or
any Subsidiary and any Key Employee or any other person. To the extent that
any Key Employee or other person acquires a right to receive payments from the
Corporation pursuant to the Restricted Stock Plan, such right shall be no
greater than the right of any unsecured general creditor of the Corporation.
(e) Governing Law - The validity, interpretation,
construction and performance of the Restricted Stock Plan or any Award
hereunder 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 Sections and
Subsections of the Restricted Stock 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 Restricted Stock Plan or any
provision hereof.
12
<PAGE> 1
Exhibit 11
VF CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------
DECEMBER 30 DECEMBER 31 JANUARY 1
1995 1994 1994
----------- ----------- ---------
<S> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Net income $157,291 $274,536 $246,415
Less Preferred Stock dividends 3,683 3,430 3,094
-------- -------- --------
Net income available to common stockholders $153,608 $271,106 $243,321
======== ======== ========
Average number of common shares outstanding 63,743 64,620 64,011
======== ======== ========
Primary earnings per share $2.41 $4.20 $3.80
======== ======== ========
FULLY DILUTED EARNINGS PER SHARE
Net income $157,291 $274,536 $246,415
Increased ESOP contribution required if
Preferred Stock were converted to Common
Stock 1,430 1,508 1,567
-------- -------- --------
Fully diluted earnings $155,861 $273,028 $244,848
======== ======== ========
Average number of common shares outstanding 63,743 64,620 64,011
Additional common equivalent shares
resulting from:
Conversion of Preferred Stock 1,586 1,623 1,647
Dilutive effect of stock options 409 351 367
-------- -------- --------
Average number of common and common
equivalent shares 65,738 66,594 66,025
======== ======== ========
Fully diluted earnings per share $2.37 $4.10 $3.71
======== ======== ========
</TABLE>
<PAGE> 1
EXHIBIT 13
VF CORPORATION
QUARTERLY RESULTS OF OPERATIONS
In thousands, except per share amounts
<TABLE>
<CAPTION>
EARNINGS PER COMMON SHARE
FULLY DIVIDENDS PER
NET SALES GROSS PROFIT NET INCOME PRIMARY DILUTED COMMON SHARE
---------- ------------ ---------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
1995
FIRST QUARTER $1,187,587 $ 388,439 $ 57,953 $ .89 $ .87 $ .34
SECOND QUARTER 1,271,936 400,924 65,237 1.01 .99 .34
THIRD QUARTER 1,332,102 412,552 69,718 1.08 1.05 .34
FOURTH QUARTER 1,270,674 282,829 (35,617)* (0.57)* (0.57)* .36
---------------------------------------------------------------------------------------------
$5,062,299 $1,484,744 $157,291 $2.41 $2.37 $1.38
=============================================================================================
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
=============================================================================================
</TABLE>
* Special charges reduced net income by $155.9 million ($1.61 per share).
See Note M.
** Interest income relating to settlement of income tax examinations
increased net income by $15.1 million ($.24 per share).
19
<PAGE> 2
VF CORPORATION
SALES AND OPERATING INCOME BY BUSINESS GROUP (Unaudited)
<TABLE>
<CAPTION>
In thousands Fiscal year ended DECEMBER 30, 1995 December 31, 1994 January 1, 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES
Jeanswear $2,664,930 $2,547,131 $2,418,533
Decorated Knitwear 619,932 623,272 392,002
Intimate Apparel 729,149 724,462 668,995
Playwear 371,717 367,508 196,245
Specialty Apparel 676,571 709,340 644,629
- ---------------------------------------------------------------------------------------------------------------------
$5,062,299 $4,971,713 $4,320,404
=====================================================================================================================
OPERATING INCOME
Jeanswear $ 311,688 $ 372,392 $ 310,165
Decorated Knitwear 8,039 32,423 3,853
Intimate Apparel (778) 60,349 57,318
Playwear 2,745 36,457 18,344
Specialty Apparel 72,421 75,851 80,212
- ---------------------------------------------------------------------------------------------------------------------
394,115 577,472 469,892
OTHER OPERATING (EXPENSE) INCOME (6,064) (8,297) 2,671
CORPORATE EXPENSES (40,661) (38,669) (38,083)
- ---------------------------------------------------------------------------------------------------------------------
$ 347,390 $ 530,506 $ 434,480
=====================================================================================================================
</TABLE>
20
<PAGE> 3
VF CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------
DECEMBER 30 DECEMBER 31 JANUARY 1
In thousands, except per share amounts 1995 1994 1994
---------- ---------- ----------
<S> <C> <C> <C>
NET SALES $5,062,299 $4,971,713 $4,320,404
COSTS AND OPERATING EXPENSES
Cost of products sold 3,577,555 3,387,295 2,974,861
Marketing, administrative and general expenses 1,131,290 1,045,615 913,734
Other operating expense (income) 6,064 8,297 (2,671)
---------- ---------- ----------
4,714,909 4,441,207 3,885,924
---------- ---------- ----------
OPERATING INCOME 347,390 530,506 434,480
OTHER INCOME (EXPENSE)
Interest income 11,085 9,296 35,284
Interest expense (77,302) (80,280) (72,671)
Miscellaneous, net 2,962 (3,861) 2,894
---------- ---------- ----------
(63,255) (74,845) (34,493)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 284,135 455,661 399,987
INCOME TAXES 126,844 181,125 153,572
---------- ---------- ----------
NET INCOME $ 157,291 $ 274,536 $ 246,415
========== ========== ==========
EARNINGS PER COMMON SHARE
Primary $2.41 $4.20 $3.80
Fully diluted 2.37 4.10 3.71
CASH DIVIDENDS PER COMMON SHARE $1.38 $1.30 $1.22
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 63,743 64,620 64,011
</TABLE>
See notes to consolidated financial statements.
20
<PAGE> 4
VF CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 30 DECEMBER 31
In thousands 1995 1994
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 84,075 $ 59,742
Accounts receivable, less allowances of
$34,621 in 1995 and $32,794 in 1994 629,506 613,337
Inventories 841,907 801,338
Deferred income taxes 84,952 48,388
Other current assets 27,197 28,361
---------- ----------
Total current assets 1,667,637 1,551,166
PROPERTY, PLANT AND EQUIPMENT 749,880 767,011
INTANGIBLE ASSETS 887,606 911,285
OTHER ASSETS 141,948 106,146
---------- ----------
$3,447,071 $3,335,608
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 229,945 $ 321,161
Current portion of long-term debt 2,715 2,773
Accounts payable 276,598 291,088
Accrued liabilities 359,062 297,310
---------- ----------
Total current liabilities 868,320 912,332
LONG-TERM DEBT 614,217 516,700
OTHER LIABILITIES 169,392 152,871
REDEEMABLE PREFERRED STOCK 60,667 62,195
DEFERRED CONTRIBUTIONS TO EMPLOYEE STOCK OWNERSHIP PLAN (37,031) (42,499)
---------- ----------
23,636 19,696
COMMON SHAREHOLDERS' EQUITY
Common Stock, stated value $1; shares authorized 150,000,000; shares
outstanding, 63,438,933 in 1995 and 64,164,524 in 1994 63,439 64,165
Additional paid-in capital 593,976 552,927
Foreign currency translation 20,483 4,557
Retained earnings 1,093,608 1,112,360
---------- ----------
1,771,506 1,734,009
---------- ----------
$3,447,071 $3,335,608
========== ==========
</TABLE>
See notes to consolidated financial statements.
22
<PAGE> 5
VF CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------
DECEMBER 30 DECEMBER 31 JANUARY 1
In thousands 1995 1994 1994
----------- ----------- ---------
<S> <C> <C> <C>
OPERATIONS
Net income $ 157,291 $ 274,536 $ 246,415
Adjustments to reconcile net income
to cash provided by operations:
Depreciation 134,039 126,902 106,678
Amortization of intangible assets 33,682 31,609 19,087
Other, net (15,048) (4,973) (3,177)
Changes in current assets and liabilities:
Accounts receivable (2,045) (45,519) (24,094)
Inventories (31,881) 72,061 (41,797)
Accounts payable (18,623) 14,559 421
Other, net 66,241 10,226 (9,782)
--------- --------- ---------
Cash provided by operations 323,656 479,401 293,751
INVESTMENTS
Capital expenditures (155,206) (132,908) (209,494)
Business acquisitions (12,004) (494,751) (17,629)
Sale of outlet facilities - - 62,000
Other, net 4,216 1,053 45,840
--------- --------- ---------
Cash invested (162,994) (626,606) (119,283)
FINANCING
Increase (decrease) in short-term borrowings (92,655) 282,739 (86,756)
Proceeds from long-term debt 98,718 99,207 98,557
Payment of long-term debt (3,123) (222,718) (283,560)
Sale of Common Stock - - 232,068
Purchase of Common Stock (86,251) (27,878) -
Cash dividends paid (92,038) (88,223) (82,831)
Other, net 39,020 12,256 13,298
--------- --------- ---------
Cash provided (used) by financing (136,329) 55,383 (109,224)
--------- --------- ---------
NET CHANGE IN CASH AND EQUIVALENTS 24,333 (91,822) 65,244
CASH AND EQUIVALENTS - BEGINNING OF YEAR 59,742 151,564 86,320
--------- --------- ---------
CASH AND EQUIVALENTS - END OF YEAR $ 84,075 $ 59,742 $ 151,564
========= ========= =========
</TABLE>
See notes to consolidated financial statements.
24
<PAGE> 6
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 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>
CONTINUED . . .
26
<PAGE> 7
VF CORPORATION
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
(continued)
<TABLE>
<CAPTION>
ADDITIONAL FOREIGN
COMMON PAID-IN CURRENCY RETAINED
In thousands STOCK CAPITAL TRANSLATION EARNINGS
-------- --------- ----------- ----------
<S> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1994 $64,165 $552,927 $ 4,557 $1,112,360
Net income - - - 157,291
Cash dividends:
Common Stock - - - (87,907)
Series B Preferred Stock - - - (4,131)
Tax benefit from Preferred Stock dividends - - - 955
Redemption of Preferred Stock - - - (507)
Restricted stock 5 (230) - 248
Purchase of treasury shares (1,720) - - (84,531)
Exercise of stock options,
net of shares surrendered 989 41,279 - (170)
Foreign currency translation, less
deferred income taxes of $8,576 - - 15,926 -
------- -------- ------- ----------
BALANCE DECEMBER 30, 1995 $63,439 $593,976 $20,483 $1,093,608
======= ======== ======= ==========
</TABLE>
26
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Shareholders
VF Corporation
We have audited the accompanying consolidated balance sheet of VF Corporation
as of December 30, 1995, and the related consolidated statements of income,
cash flows, and common shareholders' equity for the year then ended. The
financial statements of VF Corporation as of December 31, 1994 and for the
years ended December 31, 1994 and January 1, 1994 were audited by other
auditors, whose report dated February 8, 1995 expressed an unqualified opinion
on those statements. 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 audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of VF Corporation
at December 30, 1995, and the consolidated results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
February 8, 1996
27
<PAGE> 9
VF CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 30, 1995
VF Corporation's principal business is designing, manufacturing and marketing
high quality branded jeanswear, knitwear, intimate apparel, children's playwear
and other apparel. Jeanswear and related products represent over one-half of
consolidated sales and earnings and approximately one-half of total assets.
The Company's customers are primarily department, discount and specialty stores
throughout the world. One domestic discount store group comprises 10.5% of
consolidated sales in 1995.
NOTE A - ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of VF Corporation and all majority 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 1995 and 1994 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 $208.4
million and $174.0 million in 1995 and 1994. These assets are amortized on the
straight-line method over five to forty years.
The Company's policy has been to record an impairment loss against intangible
assets when it is determined that the carrying amount of such assets is not
recoverable. This evaluation, performed at least annually, is based on a
number of factors, including a business unit's expectations for operating
income and undiscounted cash flows that will result from the use of such
assets.
Effective for fiscal 1996, the Company will adopt Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of. This Statement requires
long-lived assets to be evaluated for impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable, and provides specific measurement guidelines. The Company does
not expect this Statement to have a material effect on its 1996 consolidated
results of operations.
ADVERTISING COSTS are expensed as incurred and were $230.6 million in 1995,
$218.9 million in 1994 and $199.8 million in 1993.
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
28
<PAGE> 10
earnings per share assume the conversion of Preferred Stock and the exercise of
stock options that have a dilutive effect.
STOCK-BASED EMPLOYEE BENEFIT PLANS: Compensation expense is not recorded for
stock options granted at fair market value. For grants of restricted stock,
compensation equal to the market value of shares at the date of grant is
deferred and amortized to expense over the vesting period.
RECLASSIFICATIONS: Net royalty income and amortization of intangible assets
are included in Other Operating Expense (Income) for 1995. Prior year amounts
have been reclassified to conform with this presentation.
USE OF ESTIMATES: In preparing financial statements in accordance with
generally accepted accounting principles, management makes estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
NOTE B - ACQUISITIONS
In January 1995, the Company acquired for $12.0 million an 80% interest in a
company that manufactures and markets Lee branded products in Mexico. In
January 1994, the Company acquired the common stock of H.H. Cutler Company for
a total consideration of $154.7 million and the common stock of Nutmeg
Industries, Inc. for a total consideration of $352.2 million, of which $349.1
million related to intangible assets of these companies. Both companies
manufacture and market licensed apparel. In December 1993, the Company
acquired for $17.6 million the principal operating assets of a company that
manufactures and markets Belcor branded intimate apparel in Spain.
All acquisitions have been accounted for as purchases, and accordingly the
purchase prices have been allocated to the net assets acquired based on fair
values at the dates of acquisition. The excess of cost over fair value of the
purchased businesses has been allocated to intangible assets and is being
amortized primarily over 40 years. Operating results of these companies have
been included in the consolidated financial statements since the dates of
acquisition.
NOTE C - INVENTORIES
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In thousands)
<S> <C> <C>
Finished products $514,688 $473,646
Work in process 139,721 139,255
Materials and supplies 187,498 188,437
-------- --------
$841,907 $801,338
======== ========
</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.
28
<PAGE> 11
NOTE D - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(In thousands)
<S> <C> <C>
Land $ 42,605 $ 42,745
Buildings 389,135 391,250
Machinery and equipment 1,058,644 969,857
---------- ----------
1,490,384 1,403,852
Less accumulated depreciation 740,504 636,841
---------- ----------
$ 749,880 $ 767,011
========== ==========
</TABLE>
NOTE E - SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(In thousands)
<S> <C> <C>
Commercial paper $ 143,070 $ 216,703
Banks 86,875 104,458
---------- ----------
$ 229,945 $ 321,161
========== ==========
</TABLE>
The weighted average interest rate was 6.62% at the end of 1995 and 6.16% at
the end of 1994.
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, which
extends to 1999, requires a .12% facility fee per year and contains various
financial covenants, including minimum net worth and debt ratio requirements.
At December 30, 1995, there were no borrowings under the agreement.
NOTE F - ACCRUED LIABILITIES
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(In thousands)
<S> <C> <C>
Income taxes $ 44,182 $ 43,220
Compensation 49,583 64,147
Insurance 50,805 38,940
Special charges 66,277 -
Other 148,215 151,003
---------- ----------
$ 359,062 $ 297,310
========== ==========
</TABLE>
29
<PAGE> 12
NOTE G - LONG-TERM DEBT
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In thousands)
<S> <C> <C>
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 100,000 100,000
6.75% notes, due 2005 100,000 -
9.25% debentures, due 2022 100,000 100,000
Capital leases and other 16,932 19,473
-------- --------
616,932 519,473
Less current portion 2,715 2,773
-------- --------
$614,217 $516,700
======== ========
</TABLE>
The scheduled payments of long-term debt are $2.2 million in 1997, $1.1 million
in 1998, $100.8 million in 1999 and $2.3 million in 2000. The Company paid
interest of $74.4 million in 1995, $83.1 million in 1994 and $70.3 million in
1993.
NOTE H - OTHER LIABILITIES
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In thousands)
<S> <C> <C>
Deferred income taxes $ 59,191 $ 64,830
Deferred compensation 76,834 49,283
Other 33,367 38,758
-------- --------
$169,392 $152,871
======== ========
</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.
29
<PAGE> 13
The effect of the defined benefit plan on income is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Service cost - benefits earned during the year $ 14,660 $ 16,230 $ 10,337
Interest cost on projected benefit obligation 26,409 25,639 22,148
Actual return on plan assets (68,659) (5,193) (34,895)
Net amortization and deferral 44,606 (18,124) 12,574
-------- -------- --------
Pension expense $ 17,016 $ 18,552 $ 10,164
======== ======== ========
</TABLE>
The funded status of the defined benefit plan, based on a September 30
valuation date, is as follows:
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In thousands)
<S> <C> <C>
Present value of vested benefits $307,952 $251,540
======== ========
Present value of accumulated benefits $333,846 $273,037
======== ========
Plan assets at fair value $358,051 $286,554
Present value of projected benefits 392,112 313,150
-------- --------
Funded status (34,061) (26,596)
Unrecognized net loss 31,526 22,468
Unrecognized net asset (11,824) (16,202)
Unrecognized prior service cost 23,195 28,182
-------- --------
Pension asset recorded in Other Assets $ 8,836 $ 7,852
======== ========
</TABLE>
The projected benefit obligation was determined using an assumed discount rate
of 7.75% in 1995, 8.25% in 1994 and 7.50% in 1993. The assumption for
compensation increases was 5.00% in each year, and the assumption for return on
plan assets was 8.75% in each year.
The Company 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 $5.8 million in
1995, $5.6 million in 1994 and $4.5 million in 1993. Plan expense was $6.2
million in 1995, $6.4 million for 1994 and $6.0 million for 1993, after giving
effect to tax-deductible dividends on the Series B Preferred Stock of $4.1
million in 1995, $4.2 million in 1994 and $4.3 million in 1993.
The Company sponsors other savings and profit sharing plans for certain
domestic and foreign employees. Expense for these plans totaled $13.3 million
in 1995, $9.7 million in 1994 and $7.7 million in 1993.
30
<PAGE> 14
NOTE J - CAPITAL
Common shares outstanding are net of shares held in treasury of 1,376,976 in
1995, 2,358,675 in 1994 and 1,769,131 in 1993. During 1995, 2,700,000 treasury
shares were retired.
There are 25,000,000 authorized shares of Preferred Stock, $1 par value. As of
December 30, 1995, 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 1,964,942 shares of Series B Preferred Stock outstanding at December
30, 1995, 2,014,427 shares outstanding at December 31, 1994 and 2,050,491
shares outstanding at January 1, 1994, 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 $4.9
million in 1995, $5.3 million in 1994 and $5.7 million in 1993. 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 to officers, directors and key employees nonqualified
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.
30
<PAGE> 15
Changes in the status of the stock option plans are summarized as follows:
<TABLE>
<CAPTION>
SHARES
SHARES UNDER AVAILABLE FOR
OPTION 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 granted 1,088,775 (1,088,775)
Options exercised at $16.19 to $48.00 per share (992,710) -
Options canceled (73,504) 69,100
--------- ----------
Balance December 30, 1995 4,762,049 255,165
========= ==========
Options exercisable at December 30, 1995 at $16.19 to $57.20 per share 3,673,274
=========
</TABLE>
The Company has granted to a key employee 5,130 shares of restricted stock that
vest in 2006. The Company has 300,000 shares available for future grants under
the 1995 Key Employee Restricted Stock Plan.
NOTE M - SPECIAL CHARGES
During the fourth quarter of 1995, the Company recorded special charges
totaling $155.9 million ($1.61 per share) to address changes in consumer buying
habits and the increasingly competitive retail environment that have occurred
in the apparel industry. These charges are aimed at reducing the Company's
overall cost structure, including both manufacturing and administrative costs,
through the closure of higher cost manufacturing facilities and personnel
reductions in administrative positions. In addition, included in the charges
are provisions related to better align inventories to existing retailer and
consumer requirements.
These actions affect approximately 7,800 of the Company's employees in
manufacturing and headquarters locations throughout North America and Europe.
Charges related to personnel reductions, including severance and related
benefits, total $46.9 million. As of December 30, 1995, 1,969 employees have
been terminated and $6.7 million of termination benefits have been paid. The
remainder of the employees included in the cost reduction initiatives are
generally located at manufacturing facilities and will work through the plant
closing transition periods that will end in early 1996. At that time, the
remaining cash payments to employees of $40.2 million will be made.
Of the remaining $109.0 million of special provisions, $49.1 million
represents charges that require an outlay of cash, including lease and other
contract terminations related to the plan for cost reduction. Of this amount,
$23.0 million has been paid through December 30, 1995, with the remaining
payments to be made principally in 1996. The noncash charges of $59.9 million
represent asset write-offs for closed manufacturing facilities and business and
inventory realignments.
30
<PAGE> 16
The special charges were recorded in the consolidated statement of income as
follows: Cost of Products Sold - $109.8 million; Marketing, Administrative and
General - $41.7 million; Miscellaneous and Other Operating Expense - $4.4
million.
NOTE N - INCOME TAXES
The provision for income taxes is computed based on the following amounts of
income before income taxes:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Domestic $261,437 $409,806 $356,109
Foreign 22,698 45,855 43,878
-------- -------- --------
$284,135 $455,661 $399,987
======== ======== ========
</TABLE>
The provision for income taxes consists of:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Current:
Federal $136,863 $149,000 $125,966
Foreign 32,535 24,649 17,863
State 11,299 12,978 13,806
-------- -------- --------
180,697 186,627 157,635
Deferred, primarily federal (53,853) (5,502) (4,063)
-------- -------- --------
$126,844 $181,125 $153,572
======== ======== ========
</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>
1995 1994 1993
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Tax at federal statutory rate $ 99,448 $159,481 $139,995
State income taxes, net of federal tax benefit 7,344 8,436 8,974
Amortization of intangible assets 7,319 7,126 4,234
Foreign operating losses
with no current benefit 11,169 2,302 2,210
Other, net 1,564 3,780 (1,841)
-------- -------- --------
$126,844 $181,125 $153,572
======== ======== ========
</TABLE>
31
<PAGE> 17
Deferred income tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In thousands)
<S> <C> <C>
Deferred income tax assets:
Employee benefits $ 39,567 $ 27,758
Other accrued expenses 82,453 51,095
Inventories 19,603 18,748
Operating loss carryforwards 27,018 12,988
-------- --------
168,641 110,589
Valuation allowance (22,154) (10,866)
-------- --------
$146,487 $ 99,723
======== ========
Deferred income tax liabilities:
Depreciation $ 62,473 $ 65,767
Inventories 22,492 21,207
Foreign currency translation 11,030 2,454
Unremitted foreign earnings 11,373 12,812
Other 6,349 11,520
-------- --------
$113,717 $113,760
======== ========
</TABLE>
The Company has $64.2 million of foreign operating loss carryforwards expiring
at various dates; a valuation allowance has been provided where it is more
likely than not that the deferred tax assets relating to certain of those loss
carryforwards will not be realized. Income taxes paid were $172.0 million in
1995; $177.0 million in 1994 and $152.1 million in 1993. Interest income in
1993 includes $24.4 million relating to settlements of tax examinations of
acquired companies.
NOTE O - OPERATIONS BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
(In thousands)
<S> <C> <C> <C>
Net sales:
United States $4,192,435 $4,209,090 $3,678,577
Foreign 869,864 762,623 641,827
---------- ---------- ----------
$5,062,299 $4,971,713 $4,320,404
========== ========== ==========
Operating income:
United States $ 328,878 $ 493,922 $ 406,414
Foreign 59,173 75,253 66,149
---------- ---------- ----------
388,051 569,175 472,563
Corporate expenses (40,661) (38,669) (38,083)
Interest, net (66,217) (70,984) (37,387)
Miscellaneous, net 2,962 (3,861) 2,894
---------- ---------- ----------
Income before income taxes $ 284,135 $ 455,661 $ 399,987
========== ========== ==========
</TABLE>
31
<PAGE> 18
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Identifiable assets:
United States $2,672,864 $2,632,079 $2,178,754
Foreign 684,426 610,543 562,053
Corporate 89,781 92,986 136,541
---------- ---------- ----------
$3,447,071 $3,335,608 $2,877,348
========== ========== ==========
</TABLE>
Foreign operations are conducted primarily in Europe. Foreign operations
located elsewhere are not significant. Corporate assets consist primarily of
cash and cash equivalents. The 1995 special charges (Note M) were incurred as
follows: United States - $127.1 million; Foreign - $22.9 million; Corporate
- - $2.9 million; Miscellaneous - $3.0 million.
NOTE P - LEASES
The Company leases certain facilities and equipment under noncancelable
operating leases. Rental expense was $70.4 million in 1995, $55.5 million in
1994 and $46.9 million in 1993. Future minimum lease payments are $47.8
million, $37.7 million, $29.2 million, $22.8 million and $21.6 million for the
years 1996 through 2000 and $60.4 million thereafter.
NOTE Q - FINANCIAL INSTRUMENTS
The following represents the carrying amount and fair value of financial
instruments included in the balance sheets:
<TABLE>
<CAPTION>
DECEMBER 30, 1995 DECEMBER 31, 1994
----------------------- ------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- -------- ---------- --------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Financial liabilities:
Short-term borrowings $229,945 $229,945 $321,161 $321,161
Long-term debt 614,217 668,108 516,700 506,900
Series B Preferred Stock 60,667 82,921 62,195 78,361
</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.
31
<PAGE> 19
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
ANALYSIS OF OPERATIONS
Following increases in sales and net income during the first half of 1995, VF's
sales declined in the second half, reflecting a general slowdown in the United
States in retail sales. To address the changes that are taking place in
overall retail conditions and specifically within apparel, we accelerated our
long-term strategy of achieving greater balance in lower cost manufacturing and
aggressively addressing our total cost structure. Accordingly, during the
fourth quarter of 1995, we recorded special charges of $155.9 million ($1.61
per share) to implement these cost reduction initiatives. These charges
included costs to close a number of higher cost domestic manufacturing
facilities and to effect reductions in selling and administrative expenses,
primarily from personnel reductions at domestic and international division
headquarters locations. In addition, the special charges included provisions
to better align inventories with the existing consumer and retail environment.
A significant portion of the anticipated savings from these actions is expected
to be invested in increased advertising and other actions to support and build
our brands.
Net sales in 1995 increased by 2% over 1994, resulting primarily from flat unit
sales, modest pricing increases and the impact of a weaker U.S. dollar in
translating foreign currencies. Sales in 1994 increased 15% over the 1993
level, with approximately one-half of the increase resulting from the January
1994 acquisitions of H.H. Cutler Company (Cutler) and Nutmeg Industries, Inc.
(Nutmeg) and the balance resulting primarily from unit volume growth in
existing businesses.
Gross margins were 29.3% of sales in 1995, compared with 31.9% in 1994 and
31.1% in 1993. Excluding special charges included in cost of products sold of
$109.8 million, gross margins were 31.5% of sales in 1995. The remaining
margin decline in 1995 results from provisions for inventory write-downs and
manufacturing plant downtime in certain divisions, generally reflecting the
slowdown in sales in the United States. The increase in 1994 over 1993 is due
to higher
21
<PAGE> 20
margins in the Jeanswear business group resulting from manufacturing
efficiencies. In addition, margins in 1993 were impacted by a provision for
capacity reduction in knitwear.
Marketing, administrative and general expenses were 22.3% of sales in 1995,
compared with 21.0% and 21.1% in 1994 and 1993, respectively. Excluding
special charges of $41.7 million in 1995, expenses were 21.5% of sales. The
increase in 1995, after excluding the special charges, was due to increased
advertising and other marketing expenses on lower than expected sales.
Other operating income and expense consists of net royalty income and
amortization of goodwill. Royalty income increased over the three year period,
while amortization of goodwill increased in 1994 and 1995 with the January 1994
acquisitions of Cutler and Nutmeg.
Interest expense declined slightly in 1995 due to a lower borrowing level.
Interest expense increased in 1994 due to higher borrowings incurred to fund
the acquisitions of Cutler and Nutmeg, offset in part by lower interest rates.
Interest income in 1993 included $24.4 million related to a refund of prior
years' income taxes.
The effective income tax rate was 44.6% in 1995, 39.7% in 1994 and 38.4% in
1993. The rate increase in 1995 over 1994 was due to a higher level of foreign
operating losses with no current tax benefit. The increase in 1994 over 1993
resulted from higher nondeductible goodwill amortization arising from the 1994
acquisitions.
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. International sales growth in
1995 and 1994 was at a higher rate than in the United States. Operating income
in 1995 includes $54.8 million of special charges related to both domestic and
international
21
<PAGE> 21
operations. The margin improvement in 1994 resulted from increased
manufacturing efficiencies and reduced use of outside contractors in domestic
divisions.
The Decorated Knitwear business group consists of Bassett-Walker, JanSport
imprinted apparel and, with their acquisitions in 1994, Cutler Sports Apparel
and Nutmeg. Operating income in 1995 includes $28.7 million in special
charges. The 1994 sales and profit increase resulted from the additions of
Cutler and Nutmeg and improvements in our basic fleece and T-shirt business.
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 were flat in 1995. The operating loss in 1995 includes $45.4
million in special charges, as well as declines in operating income in both our
domestic and international businesses. The sales increase in 1994 was due to
growth in our domestic branded and private label businesses.
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 from the 1993 level resulted from the acquisition of Cutler in
1994. Operating income in the business group in 1995 was impacted by $12.7
million in special charges, as well as lower profits due to continued pricing
pressures at retail in this product category. Growth in profits in 1994
included the newly acquired Cutler business and increased profit contributions
at other units.
Red Kap, Jantzen and the equipment division of JanSport are the larger
components of the Specialty Apparel group. While sales grew in each division
during 1994, sales for the group in 1995 were lower due to discontinuation of
the Jantzen men's sportswear and sweater businesses. Included in operating
income in 1995 are $6.9 million in special charges. Profits increased at each
company in 1994, with the exception of Jantzen which incurred a charge for
discontinuing its men's businesses.
23
<PAGE> 22
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. It is management's
goal to maintain a debt to capital ratio of less than 40%. Our debt to capital
ratio was within these guidelines: 32.3% at the end of 1995 and 32.7% at the
end of 1994. Despite our stated goal, we will exceed this level if warranted by
appropriate investment opportunities.
.BALANCE SHEETS.
Accounts receivable increased due to higher sales in late 1995. Inventories
are higher at the end of 1995, reflecting the anticipation of increased sales
that did not materialize in the last half of the year. Total interest-bearing
debt was comparable at the end of each year.
Over 15% of our 1995 sales and operating income were derived from international
locations. VF's financial position and operating results can be influenced by
economic conditions in countries where VF conducts business and by changing
foreign currency exchange rates. VF does not hedge the translation of foreign
currencies into the U.S. dollar, but we do enter into foreign currency forward
contracts to minimize the effect of fluctuating foreign currencies on cash
flows from foreign operations. These contracts are not material.
LIQUIDITY AND CASH FLOW
Working capital increased in 1995, and the current ratio increased to 1.9 to 1
from 1.7 to 1 in 1994. Included in current liabilities in 1995 is $66.3
million related to the 1995 special charges, substantially all of which is
expected to be paid during 1996.
23
<PAGE> 23
Cash provided by operations of $324 million in 1995 was lower than 1994 because
of lower net income and an increase in working capital. The 1994 amount was
significantly higher than prior years due to higher net income and reduced
working capital requirements.
Capital expenditures were $155 million in 1995, compared with $133 million and
$209 million in 1994 and 1993, respectively. Capital expenditures in 1996
should be comparable with the 1995 level 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.
Beginning in late 1994 and continuing through 1995, the Company purchased
2,308,000 shares of its Common Stock in open market transactions for a total of
$114.1 million pursuant to an authorization from the Board of Directors to
purchase up to three million shares.
Dividends totaled $1.38 per common share in 1995, compared with $1.30 in 1994
and $1.22 in 1993. The dividend payout rate increased to 57% due to lower 1995
earnings, compared with a payout rate of 31% in 1994 and 32% in 1993. The
indicated annual dividend rate for 1996 is $1.44 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.
25
<PAGE> 24
VF CORPORATION 1995 FINANCIAL SUMMARY
<TABLE>
<CAPTION>
In thousands, except per share amounts 1995 1994 1993 1992 1991
---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales $5,062,299 $4,971,713 $4,320,404 $3,824,449 $2,952,433
Cost of products sold 3,577,555 3,387,295 2,974,861 2,603,726 2,039,787
------------------------------------------------------------------------------------------------------------------------------
Gross profit 1,484,744 1,584,418 1,345,543 1,220,723 912,646
Marketing, administrative and other 1,137,354 1,053,912 911,063 788,216 604,774
------------------------------------------------------------------------------------------------------------------------------
Operating income 347,390 530,506 434,480 432,507 307,872
Interest, net (66,217) (70,984) (37,387) (53,615) (55,155)
Miscellaneous, net 2,962 (3,861) 2,894 (3,119) 10,480
------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 284,135 455,661 399,987 375,773 263,197
Income taxes 126,844 181,125 153,572 138,742 101,867
------------------------------------------------------------------------------------------------------------------------------
Net income $ 157,291 $ 274,536 $ 246,415 $ 237,031 $ 161,330
------------------------------------------------------------------------------------------------------------------------------
Per share of Common Stock (1)
Earnings - primary $ 2.41 $ 4.20 $ 3.80 $ 3.97 $ 2.75
Dividends 1.38 1.30 1.22 1.11 1.02
Average number of common shares
outstanding 63,743 64,620 64,011 58,608 57,152
Net income as % of average common 8.8% 16.8% 16.9% 23.0% 18.8%
shareholders' equity
Net income as % of average total assets 4.4% 7.9% 8.5% 9.7% 8.0%
------------------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Accounts receivable, net $ 629,506 $ 613,337 $ 511,887 $ 493,030 $ 333,073
Inventories 841,907 801,338 778,767 742,474 537,027
Total current assets 1,667,637 1,551,166 1,500,180 1,365,573 1,071,109
Property, plant and equipment, net 749,880 767,011 712,759 711,087 577,019
Total assets 3,447,071 3,335,608 2,877,348 2,712,380 2,126,913
Total current liabilities 868,320 912,332 659,848 684,002 510,776
Long-term debt 614,217 516,700 527,573 767,641 583,209
Common shareholders' equity 1,771,506 1,734,009 1,547,400 1,153,971 938,078
------------------------------------------------------------------------------------------------------------------------------
OTHER STATISTICS
Working capital $ 799,317 $ 638,834 $ 840,332 $ 681,571 $ 560,333
Current ratio 1.9 1.7 2.3 2.0 2.1
Debt to total capital ratio (2) 32.3% 32.7% 30.3% 44.8% 42.2%
Dividends $ 92,038 $ 88,223 $ 82,831 $ 69,552 $ 62,712
Purchase of Common Stock 86,251 27,878 - - -
Cash provided by operations 323,656 479,401 293,751 123,060 287,172
Capital expenditures (excluding 155,206 132,908 209,494 207,202 110,762
acquisitions)
Depreciation and amortization 167,721 158,511 125,765 108,281 90,991
------------------------------------------------------------------------------------------------------------------------------
MARKET DATA
Market price range (1) $57-1/8--46-3/4 $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) 27.92 27.02 23.99 19.39 16.26
Price earnings ratio -- high-low 23.7 - 19.4 12.8 - 10.5 14.9 - 10.4 14.5 - 9.7 15.1 - 6.4
Rate of payout (3) 57.3% 31.0% 32.1% 28.0% 37.1%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Per share computations and market price ranges have been
adjusted to reflect 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.
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 (UK) Ltd. N. Ireland
The H. D. Lee GmbH Germany
The H. D. Lee Company, Inc. Delaware
Lee Europe N.V. Belgium
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 Diffusion, SNC France
Vanity Fair, Inc. Delaware
Vanity Fair Mills, Inc. Alabama
Vives Vidal, Vivesa, 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 30, 1995.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS FOR FORM 10-K
We hereby 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, 1996 on our audit of the consolidated financial
statements of VF Corporation as of December 30, 1995, and for the year then
ended, appearing on page 27 of the 1995 Annual Report of Shareholders, which is
incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the consolidated financial
statement schedule, which appears on page 19 of this Form 10-K.
/s/ COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
March 25, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS FOR FORM 11-K
We hereby 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, of our
report dated March 15, 1996 on our audit of the financial statements of the VF
Corporation Tax-Advantaged Savings Plan for Salaried Employees as of December
31, 1995 and for the year then ended included in this Annual Report on Form
11-K.
/s/ COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
March 25, 1996
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS FOR FORM 10-K
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, (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 balance sheet of VF
Corporation as of December 31, 1994, and the related consolidated statements of
income, cash flows, and common shareholders' equity for each of the two fiscal
years in the period ended December 31, 1994.
/s/ Ernst & Young LLP
Reading, Pennsylvania
March 25, 1996
CONSENT OF INDEPENDENT AUDITORS FOR FORM 11-K
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 statement of net assets available for benefits of
the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees at
December 31, 1994, and the changes in its net assets available for benefits for
each of the two years then ended.
/s/ Ernst & Young LLP
Reading, Pennsylvania
March 25, 1996
<PAGE> 1
Exhibit 23.3
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
VF Corporation
We have audited the accompanying consolidated balance sheet of VF Corporation
as of December 31, 1994, and the related consolidated statements of income,
cash flows, and common shareholders' equity for each of the two fiscal years in
the period ended December 31, 1994. Our audits also included the financial
statement schedule (as it pertains to 1994 and 1993) as listed in Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule 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
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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of VF
Corporation at December 31, 1994 and the consolidated results of its operations
and its cash flows for each of the two fiscal years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic 1994 and 1993 financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Reading, Pennsylvania
February 8, 1995
<PAGE> 1
Exhibit 23.4
REPORT OF INDEPENDENT ACCOUNTANTS ON
1995 FINANCIAL STATEMENT SCHEDULE
Board of Directors and Shareholders
VF Corporation
Our report on the 1995 consolidated financial statements of VF Corporation has
been incorporated by reference in this Form 10-K from page 27 of the 1995
Annual Report to Shareholders of VF Corporation. In connection with our audit
of such consolidated financial statements, we have also audited the related
consolidated financial statement schedule listed in Item 14(a)2 on page 13 of
this Form 10-K.
In our opinion, the consolidated financial statement schedule referred to
above, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
/s/ COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
March 25, 1996
<PAGE> 1
Exhibit 23.5
REPORT OF INDEPENDENT AUDITORS
VF Corporation Pension Plan Committee
VF Corporation Tax-Advantaged Plan
for Salaried Employees
We have audited the accompanying statement of net assets available for benefits
of the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees as of
December 31, 1994, and the related statement of changes in net assets
available for benefits for each of the two years in the period then ended.
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 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
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 the changes in its net assets available for benefits for each of
the two years in the period then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The Fund Information in the statement
of net assets available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The Fund Information has been subjected
to the auditing procedures applied in our audits of the financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the financial statements taken as a whole.
/s/ Ernst & Young LLP
Reading, Pennsylvania
March 10, 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 30, 1995.
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Power of Attorney this 13th day of February, 1996.
<TABLE>
<S> <C>
ATTEST: V.F. CORPORATION
/s/ L. M. Tarnoski By: /s/ Mackey J. McDonald
- ------------------------------- -----------------------------------
L. M. Tarnoski Mackey J. McDonald, President and Chief
Secretary Executive Officer
Principal Executive Officer: Principal Financial Officer:
/s/ Mackey J. McDonald /s/ G. G. Johnson
- ------------------------------- -----------------------------------
Mackey J. McDonald, President, G. G. Johnson, Vice-President-Finance
Chief Executive Officer and Director and Chief Officer
Principal Accounting Officer:
/s/ R. K. Shearer
- -------------------------------
R. K. Shearer, Controller
/s/ Robert D. Buzzell /s/ Edward E. Crutchfield
- ------------------------------- -----------------------------------
Robert D. Buzzell, Director Edward E. Crutchfield, Director
/s/ Ursula F. Fairbairn /s/ Barbara S. Feigin
- ------------------------------- -----------------------------------
Ursula F. Fairbairn, Director Barbara S. Feigin, Director
/s/ Roger S. Hillas /s/ Leon C. Holt, Jr.
- ------------------------------- -----------------------------------
Roger S. Hillas, Director Leon C. Holt, Jr., Director
/s/ Robert J. Hurst /s/ Robert F. Longbine
- ------------------------------- -----------------------------------
Robert J. Hurst, Director R. F. Longbine, Director
/s/ William E. Pike /s/ L. R. Pugh
- ------------------------------- -----------------------------------
William E. Pike, Director L. R. Pugh, Director
/s /M. Rust Sharp /s/ L. Dudley Walker
- ------------------------------- -----------------------------------
M. Rust Sharp, Director L. D. Walker, Director
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1995
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-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 84,075
<SECURITIES> 0
<RECEIVABLES> 664,127
<ALLOWANCES> 34,621
<INVENTORY> 841,907
<CURRENT-ASSETS> 1,667,637
<PP&E> 1,490,384
<DEPRECIATION> 740,504
<TOTAL-ASSETS> 3,447,071
<CURRENT-LIABILITIES> 868,320
<BONDS> 614,217
<COMMON> 63,439
23,636
0
<OTHER-SE> 1,708,067
<TOTAL-LIABILITY-AND-EQUITY> 1,771,506
<SALES> 5,062,299
<TOTAL-REVENUES> 5,062,299
<CGS> 3,577,555
<TOTAL-COSTS> 3,577,555
<OTHER-EXPENSES> 1,137,354
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,302
<INCOME-PRETAX> 284,135
<INCOME-TAX> 126,844
<INCOME-CONTINUING> 157,291
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,291
<EPS-PRIMARY> 2.41
<EPS-DILUTED> 2.37
</TABLE>
<PAGE> 1
EXHIBIT 99(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1995
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 executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
1
<PAGE> 2
Item 1. Changes in the Plan
Effective April 1, 1994, the amount of compensation that eligible employees may
elect to contribute to the Plan was increased from 8% to 10%.
Item 2. Changes in Investment Policy
The Fidelity Puritan Fund and Templeton Foreign Fund were added in 1995 as
investment options.
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 7,587 enrolled participants in the Plan as of December
31, 1995, out of approximately 8,419 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.
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 of investments 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.
2
<PAGE> 3
Item 8. Investment of Funds
Each participant by calling the VF Savings Line directs the recordkeeper who
notifies the Trustee to invest his/her own contributions in one or more of the
following funds:
- Money Market Fund
- Fixed Income Fund
- Balanced Fund
- Equity Growth & Income Fund
- Equity Growth Fund
- Foreign Fund
- VF Corporation Common Stock Fund (investing in common stock
of the Corporation)
Brokerage commissions of $8,909, $6,859 and $6,436 for the years ended December
31, 1995, 1994 and 1993 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
<TABLE>
<CAPTION>
(a)Financial Statements Page No.
<S> <C>
Report of Independent Accountants 5
Statements of Net Assets Available for Benefits -
For the Years Ended December 31, 1995 and 1994
- Combined Plan 6
- Money Market Fund and Fixed Income Fund 7
- Balanced Fund and Equity Growth & Income Fund 8
- Equity Growth Fund and Foreign Fund 9
- VF Corporation Common Stock Fund and 10
Employee Stock Ownership Plan
Statements of Changes in Net Assets Available for Benefits -
For the Years Ended December 31, 1995, 1994 and 1993
- Combined Plan 11
- Money Market Fund 12
- Fixed Income Fund 13
- Balanced Fund 14
- Equity Growth & Income Fund 15
- Equity Growth Fund 16
- Foreign Fund 17
- VF Corporation Common Stock Fund 18
- Employee Stock Ownership Plan 19
Notes to Financial Statements 20
</TABLE>
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/ Louis J. Fecile
---------------------------------------
Louis J. Fecile
Vice President - Employee Benefits
Date: March 19, 1996
4
<PAGE> 5
Report of Independent Accountants
VF Corporation Pension Plan Committee
VF Corporation Tax-Advantaged Savings Plan
for Salaried Employees
We have audited the accompanying statement of net assets available for benefits
of the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees as of
December 31, 1995, and the related statement of changes in net assets available
for benefits for the year then ended. The financial statements of the VF
Corporation Tax-Advantaged Savings Plan for Salaried Employees as of December
31, 1994, and for the years ended December 31, 1994 and 1993, were audited by
other auditors whose report dated March 10, 1995 expressed an unqualified
opinion on these statements. 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 audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the 1995 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,
1995 and the changes in its net assets available for benefits for the year then
ended, in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the
statement of net assets available for benefits and in the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for
benefits and changes in net assets available for benefits of each fund. The
fund information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
March 15, 1996
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 1995 1994
------ ---- ----
<S> <C> <C>
Investments at fair value
VF Corporation Common Stock -
340,506 shares in 1995
396,815 shares in 1994 $ 17,961,692 $ 19,295,129
VF Corporation ESOP
Preferred Stock -
1,964,942 shares in 1995
2,014,427 shares in 1994 82,920,550 78,361,197
United States government obligations 17,329,048 15,767,773
Other securities 73,881,463 48,287,278
-------------- --------------
Total investments 192,092,753 161,711,377
Dividends and interest receivable 338,457 275,090
Loans receivable from participants 8,705,631 7,283,233
-------------- --------------
TOTAL ASSETS 201,136,841 169,269,700
-------------- --------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 0 1,988,052
Employee Stock Ownership
Plan obligation - payable to VF Corporation 46,650,286 51,667,392
-------------- --------------
TOTAL LIABILITIES 46,650,286 53,655,444
-------------- --------------
Net assets available for benefits $154,486,555 $115,614,256
============== ==============
</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 (CONTINUED)
MONEY MARKET FUND AND FIXED INCOME FUND
<TABLE>
<CAPTION>
Money Market Fund Fixed Income Fund
December 31 December 31
----------------------------------- ------------------------------------
ASSETS 1995 1994 1995 1994
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
United States government obligations $ 0 $ 0 $17,329,048 $15,767,773
Other securities 6,187,337 5,717,176 1,175,779 1,236,587
-------------- ------------- ------------- -------------
Total investments 6,187,337 5,717,176 18,504,827 17,004,360
Dividends and interest receivable 31,938 27,978 302,060 242,709
Loans receivable from participants 1,423,668 1,224,845 1,630,963 1,406,351
-------------- ------------- ------------- -------------
TOTAL ASSETS 7,642,943 6,969,999 20,437,850 18,653,420
-------------- ------------- ------------- -------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 0 90,309 0 526,219
-------------- ------------- ------------- -------------
TOTAL LIABILITIES 0 90,309 0 526,219
-------------- ------------- ------------- -------------
Net assets available for benefits $ 7,642,943 $ 6,879,690 $20,437,850 $18,127,201
============== ============= ============= =============
</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 (CONTINUED)
BALANCED FUND AND EQUITY GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Balanced Fund Equity Growth & Income Fund
December 31 December 31
------------- ---------------------------------
ASSETS 1995 1995 1994
------ ---- ---- ----
<S> <C> <C> <C>
Investments, at fair value
Other securities $ 3,932,420 $34,980,125 $25,348,419
------------- ------------- -------------
Total investments 3,932,420 34,980,125 25,348,419
Dividends and interest receivable 30 223 125
Loans receivable from participants 53,297 2,457,411 1,986,103
------------- ------------- -------------
TOTAL ASSETS 3,985,747 37,437,759 27,334,647
------------- ------------- -------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 0 0 387,091
------------- ------------- -------------
TOTAL LIABILITIES 0 0 387,091
------------- ------------- -------------
Net assets available for benefits $ 3,985,747 $37,437,759 $26,947,556
============= ============= =============
</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 (CONTINUED)
EQUITY GROWTH FUND & FOREIGN FUND
<TABLE>
<CAPTION>
Equity Growth Fund Foreign Fund
December 31 December 31
------------------------------------- --------------
ASSETS 1995 1994 1995
------ ---- ---- ----
<S> <C> <C> <C>
Investments, at fair value
Other securities $24,727,939 $15,730,539 $ 2,370,207
-------------- -------------- --------------
Total investments 24,727,939 15,730,539 2,370,207
Dividends and interest receivable 321 148 12
Loans receivable from participants 994,276 543,483 (34,572)
-------------- -------------- --------------
TOTAL ASSETS 25,722,536 16,274,170 2,335,647
-------------- -------------- --------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 0 294,676 0
-------------- -------------- --------------
TOTAL LIABILITIES 0 294,676 0
-------------- -------------- --------------
Net assets available for benefits $25,722,536 $15,979,494 $ 2,335,647
-------------- -------------- --------------
</TABLE>
See notes to financial statements.
9
<PAGE> 10
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
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 1995 1994 1995 1994
------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
VF Corporation Common Stock
340,506 shares in 1995
396,815 shares in 1994 $17,961,692 $19,295,129 $ 0 $ 0
VF Corporation ESOP
Preferred Stock
1,964,942 shares in 1995
2,014,427 shares in 1994 0 0 82,920,550 78,361,197
Other securities 315,239 177,387 192,417 77,170
-------------- -------------- ---------------- --------------
Total investments 18,276,931 19,472,516 83,112,967 78,438,367
Dividends and interest receivable 514 637 3,359 3,493
Loans receivable from participants 2,180,588 2,122,451 0 0
-------------- -------------- ---------------- --------------
TOTAL ASSETS 20,458,033 21,595,604 83,116,326 78,441,860
-------------- -------------- ---------------- --------------
LIABILITIES
-----------
Withdrawals and terminations
payable to participants 0 314,703 0 352,878
Employee Stock Ownership
Plan obligation - payable to VF Corporation 0 0 46,650,286 51,667,392
Forfeitures related to withdrawals
and terminations 0 0 0 22,176
-------------- -------------- ---------------- --------------
TOTAL LIABILITIES 0 314,703 46,650,286 52,042,446
-------------- -------------- ---------------- --------------
Net assets available for benefits $20,458,033 $21,280,901 $36,466,040 $26,399,414
============== ============== ================ ==============
</TABLE>
10
See notes to financial statements.
<PAGE> 11
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
------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on VF Corporation
Common Stock $ 538,867 $ 497,205 $ 492,821
Dividends on ESOP
Preferred Stock 4,131,256 4,228,632 4,290,967
Interest 1,255,562 979,143 1,052,117
Income from mutual funds and
bank common trust funds 3,693,225 2,614,714 2,285,814
-------------- -------------- --------------
9,618,910 8,319,694 8,121,719
-------------- -------------- --------------
Contributions
Interest on loan repayments 548,512 402,626 288,773
Participants 14,883,216 15,290,975 10,822,389
VF Corporation 5,762,864 5,570,215 4,542,628
-------------- -------------- --------------
21,194,592 21,263,816 15,653,790
-------------- -------------- --------------
Withdrawals (6,901,351) (8,128,767) (4,975,559)
Forfeitures that reduce
VF Corporation contributions (255,310) (118,128) (146,621)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (4,878,310) (5,344,502) (5,698,769)
Expenses (53,764) 0 0
Net realized and unrealized appreciation
(depreciation) in fair value of investments 20,147,532 2,951,585 (12,026,086)
-------------- -------------- --------------
Net increase 38,872,299 18,943,698 928,474
Net assets available for benefits
at beginning of year 115,614,256 96,670,558 95,742,084
-------------- -------------- --------------
Net assets available for benefits
at end of year $154,486,555 $115,614,256 $ 96,670,558
============== ============== ==============
</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 (CONTINUED)
MONEY MARKET FUND
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 338,605 $ 204,216 $ 185,319
------------- -------------- -------------
338,605 204,216 185,319
------------- -------------- -------------
Contributions
Interest on loan repayments 49,368 34,933 29,013
Participants 1,146,077 1,024,192 965,642
------------- -------------- -------------
1,195,445 1,059,125 994,655
------------- -------------- -------------
Withdrawals (373,362) (434,310) (427,805)
Forfeitures that reduce
VF Corporation contributions (579) (435) (2,177)
Fund transfers, net (396,856) (311,109) (1,106,278)
------------- -------------- -------------
Net increase (decrease) 763,253 517,487 (356,286)
Net assets available for benefits at
beginning of year 6,879,690 6,362,203 6,718,489
------------- -------------- -------------
Net assets available for benefits at
end of year $ 7,642,943 $ 6,879,690 $ 6,362,203
============= ============== =============
</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 (CONTINUED)
FIXED INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Interest $ 1,255,562 $ 979,143 $ 1,052,117
Income from mutual funds and
bank common trust funds 41,620 38,440 10,278
-------------- -------------- --------------
1,297,182 1,017,583 1,062,395
-------------- -------------- --------------
Contributions
Interest on loan repayments 96,211 59,901 51,108
Participants 2,700,460 2,598,897 2,339,497
-------------- -------------- --------------
2,796,671 2,658,798 2,390,605
-------------- -------------- --------------
Withdrawals (1,402,288) (1,771,571) (1,157,076)
Forfeitures that reduce
VF Corporation contributions (706) (890) (1,946)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 191,476 (123,376) (25,488)
Fund transfers (net) (571,686) (13,095) (303,898)
-------------- -------------- --------------
Net increase 2,310,649 1,767,449 1,964,592
Net assets available for benefits at
beginning of year 18,127,201 16,359,752 14,395,160
-------------- -------------- --------------
Net assets available for benefits at
end of year $ 20,437,850 $ 18,127,201 $ 16,359,752
============== ============== ==============
</TABLE>
See notes to financial statements.
13
<PAGE> 14
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
BALANCED FUND
<TABLE>
<CAPTION>
Year Ended December 31
------------------------
1995
----
<S> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 141,331
-------------
141,331
-------------
Contributions
Interest on loan repayments 7,685
Participants 226,246
-------------
233,931
-------------
Withdrawals (40,993)
Net realized and unrealized
appreciation in fair value of investments 90,964
Fund transfers, net 3,560,514
-------------
Net increase 3,985,747
Net assets available for benefits at
beginning of year 0
-------------
Net assets available for benefits at
end of year $ 3,985,747
=============
</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 (CONTINUED)
EQUITY GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 1,688,047 $ 1,833,144 $ 1,197,977
-------------- -------------- --------------
1,688,047 1,833,144 1,197,977
-------------- -------------- --------------
Contributions
Interest on loan repayments 154,780 123,536 84,286
Participants 4,215,860 4,624,489 3,056,697
-------------- -------------- --------------
4,370,640 4,748,025 3,140,983
-------------- -------------- --------------
Withdrawals (1,378,118) (2,031,249) (1,170,331)
Forfeitures that reduce
VF Corporation contributions (1,272) (1,164) (3,966)
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 7,296,660 (1,267,002) 2,215,015
Fund transfers, net (1,485,754) (25,479) 628,464
-------------- -------------- --------------
Net increase 10,490,203 3,256,275 6,008,142
Net assets available for benefits at
beginning of year 26,947,556 23,691,281 17,683,139
-------------- -------------- --------------
Net assets available for benefits at
end of year $ 37,437,759 $ 26,947,556 $ 23,691,281
============== ============== ==============
</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 (CONTINUED)
EQUITY GROWTH FUND
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 1,353,455 $ 515,020 $ 877,085
-------------- -------------- --------------
1,353,455 515,020 877,085
-------------- -------------- --------------
Contributions
Interest on loan repayments 100,380 81,580 35,211
Participants 3,329,947 3,834,443 1,450,084
-------------- -------------- --------------
3,430,327 3,916,023 1,485,295
-------------- -------------- --------------
Withdrawals (1,087,899) (1,129,617) (409,898)
Forfeitures that reduce
VF Corporation contributions (1,444) (118) (1,512)
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 4,253,881 (726,720) 657,363
Fund transfers, net 1,794,722 2,439,546 2,471,670
-------------- -------------- --------------
Net increase 9,743,042 5,014,134 5,080,003
Net assets available for benefits at
beginning of year 15,979,494 10,965,360 5,885,357
-------------- -------------- --------------
Net assets available for benefits at
end of year $ 25,722,536 $ 15,979,494 $ 10,965,360
============== ============== ==============
</TABLE>
See notes to financial statements.
16
<PAGE> 17
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
FOREIGN FUND
<TABLE>
<CAPTION>
Year Ended December 31
------------------------
1995
----
<S> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 98,277
-------------
98,277
-------------
Contributions
Interest on loan repayments 5,537
Participants 165,453
-------------
170,990
-------------
Withdrawals (9,708)
Net realized and unrealized
(depreciation) in fair value
of investments (122,155)
Fund transfers, net 2,198,243
-------------
Net increase 2,335,647
Net assets available for benefits at
beginning of year 0
-------------
Net assets available for benefits at
end of year $ 2,335,647
=============
</TABLE>
See notes to financial statements.
17
<PAGE> 18
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
VF CORPORATION COMMON STOCK FUND
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on VF Corporation
Common Stock $ 538,867 $ 497,205 $ 492,821
Income from mutual funds and
bank common trust funds 6,622 4,284 2,559
--------------- --------------- ---------------
545,489 501,489 495,380
--------------- --------------- ---------------
Contributions
Interest on loan repayments 134,551 102,676 89,155
Participants 3,099,173 3,208,954 3,010,469
--------------- --------------- ---------------
3,233,724 3,311,630 3,099,624
--------------- --------------- ---------------
Withdrawals (1,137,459) (1,310,494) (1,023,379)
Forfeitures that reduce
VF Corporation contributions (802) (841) (4,057)
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 1,635,363 985,506 (3,106,592)
Fund transfers, net (5,099,183) (2,089,863) (1,689,958)
--------------- --------------- ---------------
Net (decrease) increase (822,868) 1,397,427 (2,228,982)
Net assets available for benefits at
beginning of year 21,280,901 19,883,474 22,112,456
--------------- --------------- ---------------
Net assets available for benefits at
end of year $ 20,458,033 $ 21,280,901 $ 19,883,474
=============== =============== ===============
</TABLE>
See notes to financial statements.
18
<PAGE> 19
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EMPLOYEE STOCK OWNERSHIP PLAN
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on ESOP Preferred Stock $ 4,131,256 $ 4,228,632 $ 4,290,967
Income from mutual funds and
bank common trust funds 25,268 19,610 12,596
--------------- --------------- --------------
4,156,524 4,248,242 4,303,563
--------------- --------------- --------------
Contributions
VF Corporation 5,762,864 5,570,215 4,542,628
--------------- --------------- --------------
5,762,864 5,570,215 4,542,628
--------------- --------------- --------------
Withdrawals (1,471,524) (1,451,526) (787,070)
Forfeitures that reduce
VF Corporation contributions (250,507) (114,680) (132,963)
Expenses (53,764) 0 0
Interest paid to VF Corporation on Employee Stock
Ownership Plan obligation (4,878,310) (5,344,502) (5,698,769)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 6,801,343 4,083,177 (11,766,384)
--------------- --------------- --------------
Net increase (decrease) 10,066,626 6,990,926 (9,538,995)
Net assets available for benefits at
beginning of year 26,399,414 19,408,488 28,947,483
--------------- --------------- --------------
Net assets available for benefits at
end of year $ 36,466,040 $ 26,399,414 $ 19,408,488
=============== =============== ==============
</TABLE>
See notes to financial statements.
19
<PAGE> 20
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF THE PLAN
VF Corporation (the Corporation) sponsors the VF 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 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, 765,568 shares in 1995 and 637,947
shares in 1994 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 loan will be
repaid in increasing installments through 2003 from future minimum Corporation
matching contributions to the ESOP and dividends on the ESOP Preferred Stock.
The Corporation's minimum required matching contributions and dividends are
$8.5 million in 1996 and increases each year to $9.3 million over the following
four years.
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) Balanced Fund: Monies are invested in investment
vehicles to obtain as much income as possible,
consistent with the preservation and conservation of
capital.
(d) Equity Growth & Income Fund: Monies are invested in
investments with emphasis on capital appreciation
which are currently paying dividends and/or offer
prospects for growth of capital and future income.
(e) Equity Growth Fund: Monies are primarily invested in
common stock ,securities convertible into common
stock and debt securities in search of long-term
growth opportunities.
(f) Foreign Fund: Monies are invested in stocks and debt
obligations of companies and governments outside the
United States.
(g) 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.
20
<PAGE> 21
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
VF 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 total vested account balance, but may not borrow from the
Corporation matching portion. Payment in full is required at termination of
employment. There were 2,730 loans outstanding at December 31, 1995.
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
----------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Money Market Fund 2,805 2,818 2,549
Fixed Income Fund 4,308 4,382 3,818
Balanced Fund 1,035 0 0
Equity Growth & Income Fund 5,725 5,603 4,665
Equity Growth Fund 4,513 3,999 2,776
Foreign Fund 700 0 0
VF Corporation Common Stock Fund 4,553 4,839 4,327
Employee Stock Ownership Plan 7,461 7,317 6,214
</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.
21
<PAGE> 22
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.
The plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments, which
consists of the realized gains or losses and the unrealized appreciation or
depreciation on those investments.
Administrative expenses consisting primarily of fees for legal, accounting and
other services are paid by the Corporation in accordance with the Plan
Agreement and are based on customary and reasonable rates for such services.
Payment of Benefits: Effective in 1995, the Plan includes amounts allocated to
withdrawing participants as assets available for plan benefits in accordance
with the AICPA Audit and Accounting Guide, "Audits of Employee Benefit Plans."
Previously, these amounts were reported as a liability in the Statements of Net
Assets Available for Benefits.
Use of Estimates: In preparing financial statements in accordance with
generally accepted accounting principles, management makes estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has issued a Favorable Determination Letter dated
January 16, 1996, 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 affect the Plan's qualified status.
22
<PAGE> 23
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS
Net unrealized appreciation (depreciation) in fair value of investments
included in Plan equity includes the following:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation (Depreciation)
in Fair Value for the Year Ended December 31
--------------------------------------------------------------
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common Stock $ 52,620 $ 215,007 $ (3,612,779)
ESOP Preferred Stock 6,484,308 3,812,036 (11,944,828)
Mutual funds and
bank common trust funds 11,083,328 (2,153,697) 2,749,507
-------------- -------------- --------------
17,620,256 1,873,346 (12,808,100)
Fair value as determined by
Plan trustee:
United States government
obligations 0 0 0
Commercial notes 191,467 (146,268) (12,832)
Mutual funds and
bank common trust funds 0 0 0
Unallocated insurance
contracts 0 0 0
-------------- -------------- --------------
191,467 (146,268) (12,832)
-------------- -------------- --------------
$17,811,723 $ 1,727,078 $(12,820,932)
============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Fair Value
at December 31
--------------------------------------------------------------
1995 1994 1993
--------------- --------------- ---------------
<S> <C> <C> <C>
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common Stock $ 17,961,692 $ 19,295,129 $ 18,219,790
ESOP Preferred Stock 82,920,550 78,361,197 75,663,118
Mutual funds and
bank common trust funds 71,875,357 46,457,343 38,268,505
--------------- --------------- ---------------
172,757,599 144,113,669 132,151,413
Fair value as determined by
Plan trustee:
United States government
obligations 17,329,048 15,767,773 13,673,576
Commercial notes 678,070 249,552 1,041,341
Mutual funds and
bank common trust funds 1,328,036 1,580,383 621,992
Unallocated insurance
contracts 0 0 217,487
--------------- --------------- ---------------
19,335,154 17,597,708 15,554,396
--------------- --------------- ---------------
$192,092,753 $161,711,377 $147,705,809
=============== =============== ===============
</TABLE>
Unrealized appreciation in fair value of investments at December 31, 1995, 1994
and 1993 was $39,182,641, $21,770,129 and $20,043,051 respectively.
23
<PAGE> 24
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Net unrealized appreciation (depreciation) in fair value of investments
includes the following:
<TABLE>
<CAPTION>
Year Ended December 31
1995 1994 1993
--------------- --------------- --------------
<S> <C> <C> <C>
Aggregate proceeds $ 57,592,059 $49,419,023 $47,003,365
Aggregate cost 55,256,250 48,194,516 46,208,519
--------------- --------------- --------------
Net realized gain $ 2,335,809 $ 1,224,507 $ 794,846
=============== =============== ==============
</TABLE>
Of the net realized gain, $1,690,513, $1,041,640 and $684,631 related to gains
recognized on the sale of VF Common Stock and the redemption of VF Preferred
Stock for the years ended 1995, 1994 and 1993, respectively.
The fair value of individual investments that represent 5% or more of the
Plan's net assets at December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
ESOP Preferred Stock $82,920,550 $78,361,197
Fidelity Growth & Income Fund 34,838,023 25,189,257
Fidelity Magellan Fund 24,637,151 15,590,208
VF Corporation Common Stock 17,961,692 19,295,129
</TABLE>
24
<PAGE> 25
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Investment held at December 31, 1995:
<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 340,506 $ 17,961,692 $ 12,440,314
VF Corporation 6.75% Series B ESOP
Convertible Preferred Stock 1,964,942 82,920,550 60,667,584
--------------- --------------
100,882,242 73,107,898
--------------- --------------
United States Government Obligations:
Small Business Administration Loans: $ 15,883,599 16,078,387 16,000,534
(Rates of 5.20% to 10.00%,
maturities of 9/15/96 to 8/31/14)
N.O.A.A. loan (Rate of 7.975%, matures 1/2/97) $ 133,000 132,834 132,834
F.M.H.A. loans (Rates of 6.475% to 9.875%,
maturities of 2/01/96 to 11/19/08) $ 1,127,817 1,117,827 1,117,827
--------------- --------------
17,329,048 17,251,195
--------------- --------------
Other Securities:
Mutual funds and bank common trust funds:
Kemper Money Market Fund 6,123,674 6,123,674 6,123,674
Fidelity Puritan Fund 230,260 3,916,714 3,825,966
Fidelity Growth & Income Fund 1,287,912 34,838,023 27,154,156
Fidelity Magellan Fund 286,545 24,637,151 20,979,169
Templeton Foreign Fund 257,058 2,359,795 2,481,137
UMB Bank Funds:
Money Market Account 690,127 690,127 690,127
Scout Prime - I 637,909 637,909 637,909
American Commercial Lines (Due 7/15/01) 250,000 251,893 251,893
International Business Machines (Due 1/12/96) 200,000 199,567 199,038
Private Export Funding Corp. (Due 4/30/04) 212,500 226,610 207,950
--------------- --------------
73,881,463 62,551,019
--------------- --------------
$192,092,753 $152,910,112
=============== ==============
</TABLE>
25
<PAGE> 26
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE E -- RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
<TABLE>
<CAPTION>
1995
----
<S> <C>
Net assets available for benefits per the financial statements $154,486,555
Amounts allocated to withdrawing participants 2,881,962
------------
Net assets available for benefits per Form 5500 $151,604,593
============
</TABLE>
The following is a reconciliation of withdrawals paid to participants per the
financial statements to Form 5500:
<TABLE>
<CAPTION>
1995
----
<S> <C>
Withdrawals paid to participants and forfeitures per the
financial statements $ 7,156,661
Add amounts allocated to withdrawing participants at
December 31, 1995 2,881,962
------------
Withdrawals paid to participants and forfeitures per Form 5500 $ 10,038,623
============
</TABLE>
Amounts allocated to withdrawing participants are recorded on Form 5500 as
withdrawal claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
26
