<PAGE> 1
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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V. F. CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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PENNSYLVANIA 2320 23-1180120
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION NUMBER) IDENTIFICATION NUMBER)
</TABLE>
628 GREEN VALLEY ROAD, SUITE 500
GREENSBORO, NORTH CAROLINA 27408
(336) 547-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CANDACE S. CUMMINGS, ESQ.
GENERAL COUNSEL
628 GREEN VALLEY ROAD, SUITE 500
GREENSBORO, NORTH CAROLINA 27408
(336) 547-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPY TO:
SARAH BESHAR, ESQ.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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8.10% Notes due 2005................... $300,000,000 100% $300,000,000 $79,200
8.50% Notes due 2010................... $200,000,000 100% $200,000,000 $52,800
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Total.................................. $500,000,000 -- $500,000,000 $132,000
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(1) Determined pursuant to Rule 457(f) of the rules and regulations under the
Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 30, 2000
PROSPECTUS
DECEMBER , 2000
$500,000,000
V. F. CORPORATION LOGO
V.F. CORPORATION
Offer to Exchange
$300,000,000 8.10% Notes due 2005
$200,000,000 8.50% Notes due 2010
for
$300,000,000 8.10% New Notes due 2005 and
$200,000,000 8.50% New Notes due 2010
------------------------
We are offering to exchange up to $300,000,000 of our 8.10% notes due 2005
and up to $200,000,000 of our 8.50% notes due 2010 (the New Notes), which will
be registered under the Securities Act of 1933, as amended, for up to
$300,000,000 of our existing 8.10% notes due 2005 and up to $200,000,000 of our
existing 8.50% notes due 2010 (the Old Notes). We are offering to issue the New
Notes to satisfy our obligations contained in the registration rights agreement
entered into when the Old Notes were sold in transactions permitted by Rule 144A
and Regulation S under the Securities Act.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that the transfer restrictions, registration
rights and additional interest provisions relating to the Old Notes do not apply
to the New Notes.
The exchange offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on , 2001 unless extended.
------------------------
To exchange your Old Notes for New Notes:
- You must complete and send the letter of transmittal that accompanies
this prospectus to the exchange agent by 5:00 p.m., New York City time,
on , 2001.
- If your Old Notes are held in book-entry form at The Depository Trust
Company, you must instruct DTC, through your signed letter of
transmittal, that you wish to exchange your Old Notes for New Notes. When
the exchange offer closes, your DTC account will be changed to reflect
your exchange of Old Notes for New Notes.
- You should read the section called "The Exchange Offer" for additional
information on how to exchange your Old Notes for New Notes.
------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 3
NOTICE TO INVESTORS
Based on interpretations of the staff of the SEC set forth in no-action
letters issued to third parties, we believe that New Notes issued pursuant to
the exchange offer in exchange for Old Notes may be offered for resale, resold,
and otherwise transferred by a holder (other than broker-dealers, as set forth
below, and any holder that is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without further registration under the
Securities Act and without delivery to prospective purchasers of a prospectus
pursuant to the provisions of the Securities Act, provided that the holder is
acquiring the New Notes in the ordinary course of its business, is not
participating and has no arrangement or understanding with any person to
participate in the distribution of the New Notes. Eligible holders wishing to
accept the exchange offer must represent to us in the letter of transmittal that
these conditions have been met. See "The Exchange Offer -- Procedures for
Tendering."
Each broker-dealer who holds Old Notes acquired for its own account as a
result of market-making or other trading activities and who receives New Notes
for its own account pursuant to the exchange offer must acknowledge that it will
deliver a prospectus in connection with any resale of New Notes. The letter of
transmittal states that by acknowledging and delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with the resales of New Notes received for the broker-dealer's own account in
exchange for Old Notes where Old Notes were acquired by the broker-dealer as a
result of market-making activities or other trading activities. For a period of
up to 180 days after the expiration date, we will make this prospectus available
to those broker-dealers (if they so request in the letter of transmittal) for
use in connection with those resales. See "Plan of Distribution."
The Old Notes and the New Notes constitute new issues of securities with no
established public trading market. We do not intend to apply for listing of the
New Notes on any securities exchange or for inclusion of the New Notes in any
automated quotation system. There can be no assurance that an active public
market for the New Notes will develop or as to the liquidity of any market that
may develop for the New Notes, the ability of holders to sell the New Notes, or
the price at which holders would be able to sell the New Notes. We have been
advised by the initial purchasers that they intend to make a market in the New
Notes; however, these entities are under no obligation to do so and any market
making activities with respect to the New Notes may be discontinued at any time.
Future trading prices of the New Notes will depend on many factors, including
among other things, prevailing interest rates, our operating results and the
market for similar securities.
Any Old Notes not tendered or accepted in the exchange offer will remain
outstanding. To the extent that Old Notes are tendered and accepted in the
exchange offer, your ability to sell untendered, and tendered but unaccepted,
Old Notes could be adversely affected. Following consummation of the exchange
offer, the holders of Old Notes will continue to be subject to the existing
restrictions on transfer thereof, and we will have no further obligation to
those holders, under the exchange and registration rights agreement, to provide
for the registration under the Securities Act of the Old Notes. There may be no
trading market for the Old Notes.
We will not receive any proceeds from, and have agreed to bear the expenses
of, the exchange offer. No underwriter is being used in connection with the
exchange offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL WE ACCEPT SURRENDERS FOR
EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE
OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES
OR BLUE SKY LAWS OF THOSE JURISDICTIONS.
<PAGE> 4
WHERE YOU CAN FIND ADDITIONAL INFORMATION
V.F. Corporation files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
Our SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the SEC
at its public reference facilities:
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Public Reference Room Office New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of the documents at prescribed rates by writing
to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on
the operations of the public reference facilities. Our SEC filings are also
available at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The SEC allows us to "incorporate by reference" in this prospectus the
information we file with the SEC, which means:
- incorporated documents are considered part of this prospectus;
- we can disclose important information to you by referring you to those
documents; and
- information that we file with the SEC will automatically update and
supersede the information in this prospectus and any information that was
previously incorporated in this prospectus.
We incorporate by reference the documents listed below which were filed
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"):
(1) our Annual Report on Form 10-K for the fiscal year ended January 1,
2000;
(2) our Quarterly Report on Form 10-Q for the quarter ended April 1, 2000;
(3) our Quarterly Report on Form 10-Q for the quarter ended July 1, 2000;
(4) our Quarterly Report on Form 10-Q for the quarter ended September 30,
2000; and
(5) our Current Report on Form 8-K filed on November 20, 2000.
You can obtain any of the filings incorporated by reference in this
prospectus through us or from the SEC through the SEC's web site or at the
addresses listed above. Documents incorporated by reference are available from
us without charge, excluding any exhibits to those documents that are not
specifically incorporated by reference in such documents. You can request a copy
of the documents incorporated by reference in this prospectus and a copy of the
indenture, registration rights agreement and other agreements referred to in
this prospectus by requesting them in writing or by telephone from us at the
following address:
V.F. Corporation
628 Green Valley Road, Suite 500
Greensboro, North Carolina 27408
Attention: Investor Relations
Telephone: (336) 547-6000
We have filed with the SEC under the Securities Act and the rules and
regulations thereunder a registration statement on Form S-4 with respect to the
New Notes issuable pursuant to the exchange offer. This prospectus does not
contain all of the information contained in the registration statement, certain
portions of which have been omitted pursuant to the rules and regulations of the
SEC and to which reference is hereby made.
2
<PAGE> 5
SUMMARY
The following summary contains basic information about this exchange offer.
It may not contain all the information that is important to you in making your
investment decision. More detailed information appears elsewhere in this
prospectus and in our consolidated financial statements and accompanying notes
that we incorporate by reference. "The Exchange Offer" and the "Description of
New Notes" sections of this prospectus contain more detailed information
regarding the terms and conditions of the exchange offer and the New Notes.
Certain capitalized terms used in this prospectus summary are defined elsewhere
in this prospectus. Unless the context clearly implies otherwise, the words
"company," "we," "our," "ours" and "us" refer to V.F. Corporation and its
subsidiaries.
THE EXCHANGE OFFER
New Notes..................... $300,000,000 in principal amount of our new
8.10% notes due 2005 and $200,000,000 in
principal amount of our new 8.50% notes due
2010.
The Exchange Offer............ We are offering to issue the New Notes in
exchange for a like principal amount of
outstanding Old Notes that we issued on
September 29, 2000. We are offering to issue
the New Notes to satisfy our obligations
contained in the exchange and registration
rights agreement we entered into when we sold
the Old Notes in transactions pursuant to Rule
144A and Regulation S under the Securities Act.
The Old Notes were subject to transfer
restrictions that will not apply to the New
Notes so long as you are acquiring the New
Notes in the ordinary course of your business,
you are not participating in a distribution of
the New Notes and you are not an affiliate of
ours.
Maturity Dates................ October 1, 2005 and October 1, 2010.
Interest Payment Dates........ April 1 and October 1 of each year, commencing
April 1, 2001.
Ranking....................... The New Notes are unsecured general obligations
of V.F. Corporation and will rank equally with
all of the other general unsecured indebtedness
of V.F. Corporation.
Optional Redemption........... We may redeem some or all of the New Notes at
any time or from time to time at the redemption
price described under the heading "Description
of the New Notes -- Optional Redemption" plus
accrued interest, if any, to the date of
redemption.
Certain Covenants............. The indenture governing the New Notes contains
covenants that, among other things, limit our
ability to:
- create mortgages and other liens;
- engage in certain sale/leaseback
transactions; or
- merge or consolidate with another company.
For more details, see the section under the
heading "Description of the New
Notes -- Covenants" and "Description of the New
Notes -- Special Situations -- Mergers and
Similar Events" in the prospectus.
3
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Use of Proceeds............... We will not receive any proceeds from the
issuance of the New Notes.
Denominations and Issuance of
New Notes................... The New Notes will be issued only in registered
form without coupons, in minimum denominations
of $1,000 and multiples of $1,000.
Tenders, Expiration Date,
Withdrawal.................. The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2001, unless it
is extended. To tender your Old Notes, you must
follow the detailed procedures described under
the heading "The Exchange Offer -- Process for
Tendering" including special procedures for
certain beneficial owners and broker-dealers.
If you decide to exchange your Old Notes for
New Notes, you must acknowledge that you do not
intend to engage in and have no arrangement
with any person to participate in a
distribution of the New Notes. If you decide to
tender your Old Notes pursuant to the exchange
offer, you may withdraw them at any time prior
to 5:00 p.m., New York City time, on the
expiration date.
Federal Income Tax
Consequences.................. Your exchange of Old Notes for New Notes
pursuant to the exchange offer will not result
in a gain or loss to you.
Exchange Agent................ U.S. Bank Trust National Association is the
exchange agent for the exchange offer.
Failure to Exchange Your Old
Notes....................... If you fail to exchange your Old Notes for New
Notes in the exchange offer, your Old Notes
will continue to be subject to transfer
restrictions and you will not have any further
rights under the exchange and registration
rights agreement, including any right to
require us to register your Old Notes or to pay
any additional interest.
Trading Market................ To the extent that Old Notes are tendered and
accepted in the exchange offer, your ability to
sell untendered, and tendered but unaccepted,
Old Notes could be adversely affected. There
may be no trading market for the Old Notes.
We cannot assure you that an active public
market for the New Notes will develop or as to
the liquidity of any market that may develop
for the New Notes, the ability of holders to
sell the New Notes, or the price at which
holders would be able to sell the New Notes.
For more details, see the section under the
heading "Notice to Investors."
4
<PAGE> 7
V.F. CORPORATION
V.F. Corporation, through its operating subsidiaries, designs, manufactures
and markets branded jeanswear, intimate apparel, children's playwear,
occupational apparel, knitwear, daypacks, backpacks, high performance outdoor
apparel and equipment and other apparel. V.F. Corporation, organized in 1899,
oversees the operations of its individual businesses, providing them with
financial and administrative resources.
We manage our business through over two dozen consumer-focused marketing
units that support specific brands. The management team of each of the
individual marketing units has the responsibility to build and develop their
brands within guidelines established by the Company. We have grouped together
marketing units with generally similar products into three reportable business
segments -- Consumer Apparel, Occupational Apparel and All Other.
CONSUMER APPAREL SEGMENT
JEANSWEAR AND RELATED PRODUCTS
We manufacture and market jeanswear and related casual products in the
United States and in many international markets. In the United States, we
manufacture and market jeanswear products under the LEE(R), WRANGLER(R),
RUSTLER(R), RIDERS(R), BRITTANIA(R), CHIC(R) and GITANO(R) brands. We also offer
cotton casual pants and shirts under the LEE CASUALS(R) and TIMBER CREEK BY
WRANGLER(R) brands.
According to industry data, approximately 664 million pairs of jeans made
of denim, twill, corduroy and other fabrics were sold in the United States in
1999, representing a 3.9% increase over 1998. According to rolling twelve
months' industry data, we have the largest combined unit market share at
approximately 28%, with the WRANGLER, LEE and RUSTLER brands having the second,
third and fourth largest unit shares of the jeans market in the United States,
respectively.
In domestic markets, we sell our LEE branded products through department
and specialty stores. We market WRANGLER westernwear through western specialty
stores, and we sell other WRANGLER brand products primarily through the mass
merchant and discount store channels. We market the RUSTLER and RIDERS brands to
national and regional discount chains. We generally sell all our brands directly
to retailers through full-time salespersons.
In international markets, our largest jeanswear operation is in Western
Europe, where we manufacture and market LEE, WRANGLER, HERO BY WRANGLER(TM),
MAVERICK(R), OLD AXE(R) and H.I.S.(R) jeanswear and related products. We sell
LEE and WRANGLER jeanswear products through department stores and specialty
shops, while we sell the HERO BY WRANGLER, MAVERICK and OLD AXE brands to
discount stores. Jeanswear in Europe and in most international markets is more
fashion-driven and has a higher relative price than similar products in the
United States. We sell Jeanswear products to retailers through our sales forces
and independent sales agents.
We also market the LEE and WRANGLER brands in Canada and Mexico.
Additionally, over the last three years, we have converted several licensed
operations in South America into owned operations. Currently, we manufacture and
market the WRANGLER and LEE brands in several South American countries through
operations based in Brazil, Argentina and Chile. We sell these products through
department and specialty stores. Also, in late 1999, we acquired a business that
manufactures and markets the licensed UFO(R) brand, a leading local jeans brand
in Argentina.
We also manufacture and market LEE products in China, and participate in
joint ventures in Spain and Portugal. In foreign markets where we do not have
owned operations, we market LEE and WRANGLER jeanswear and related products
through distributors, agents or licensees.
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<PAGE> 8
INTIMATE APPAREL
We manufacture and market women's intimate apparel under the VANITY
FAIR(R), LILY OF FRANCE(R) and the licensed OSCAR DE LA RENTA(R) labels for sale
to domestic department and specialty stores. Products include bras, panties,
daywear, shapewear, robes and sleepwear. During 1999, we introduced a line of
sports bras under the licensed NIKE(R) label. In addition, we entered into a
license agreement with Tommy Hilfiger Licensing, Inc. to produce and distribute
women's intimate apparel. This line of intimates was launched in department
stores in fall 2000 and includes bras, panties, daywear and shapewear.
We manufacture and market women's intimate apparel under the VASSARETTE(R),
BESTFORM(R) and EXQUISITE FORM(R) brands for sale to the discount store channel
of distribution. We also have a significant private label lingerie business with
various national chain and specialty stores in the United States. Most products
are sold through our sales force.
In the international market, we manufacture and market women's intimate
apparel to department and specialty stores under the LOU(R) and BOLERO(R) brand
names primarily in France and under the GEMMA(R), INTIMA CHERRY(R) and BELCOR(R)
brands in Spain. We market intimate apparel in discount stores in France under
the VARIANCE(R), VASSARETTE and BESTFORM brands.
CHILDREN'S PLAYWEAR
We manufacture and market infant and children's apparel in the United
States under the HEALTHTEX(R) and LEE brands and under the licensed NIKE brand.
We sell these products primarily to department and specialty stores. During
1999, we made the HEALTHTEX brand available over the internet through a website,
www.healthtex.com, as our first e-commerce initiative selling directly to
consumers.
SWIMWEAR
We design, manufacture and market an extensive line of women's swimwear
under the JANTZEN(R) trademark and the licensed NIKE label. We sell these
products primarily to department and specialty stores in the United States and
Canada through our sales force. We license the JANTZEN trademark to other
companies in several foreign countries. We also manufacture and market swimwear
under various labels in Spain and France.
OCCUPATIONAL APPAREL SEGMENT
We produce occupational and career apparel sold under the RED KAP(R) label
in the United States. Approximately two-thirds of 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. Since industrial laundries maintain minimal inventories of work
clothes, a supplier's ability to offer rapid delivery is an important factor in
this market. Our commitment to customer service, supported by an automated
central distribution center with several satellite locations, enables us to fill
customer orders within 24 hours of receipt and has helped the RED KAP brand
obtain a significant share of the industrial laundry rental business.
Through several acquisitions, we have broadened our offerings to include
several new product categories. We manufacture restaurant apparel and linen
products under the PENN STATE TEXTILE(TM) brand and "clean room" garments under
the FIBROTEK(TM) brand. We market uniforms and specialized corporate image
apparel to a number of business and governmental organizations under the
UNIFORMSOLUTIONS(TM) and HORACE SMALL PROFESSIONAL APPAREL(TM) labels; many of
these utilize business-to-business internet sites to reach ultimate consumers.
In addition, we market safety apparel in the United States and Canada under the
BULWARK(R) brand.
6
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ALL OTHER SEGMENT
KNITWEAR
We manufacture and market knitted fleecewear and T-shirts in the United
States. We market blank fleece and T-shirt products under the LEE brand to
wholesalers and garment screen-print operators. Approximately 40% of knitwear
sales are for private label accounts, including NIKE, Inc. and various national
chain, department and discount stores.
We also design, manufacture and market imprinted sports apparel under
licenses granted by the four major American professional sports leagues, NASCAR
and other parties. We distribute these sports apparel products for adults
through department, sporting goods and athletic specialty stores under the LEE
SPORT(R), NUTMEG(R) and the licensed CHASE AUTHENTICS(R) brands. We distribute
CSA(R) branded products, primarily in children's sizes, through mass
merchandisers and discount stores.
DAYPACKS AND RELATED PRODUCTS
We manufacture and market JANSPORT(R) brand daypacks through department and
sports specialty stores and college bookstores in the United States and through
department and specialty stores in Europe. We market EASTPAK(R) brand daypacks
through sporting goods chains and mass merchandisers in the United States and
through department and specialty stores in Europe. JANSPORT daypacks and
bookbags have a leading brand share in the United States. We sell JANSPORT
branded fleece casualwear and T-shirts imprinted with college logos through
college bookstores. In addition, we sell JANSPORT backpacking and mountaineering
gear through outdoor and sporting goods stores.
OUTDOOR APPAREL AND RELATED PRODUCTS
We manufacture and market high performance outdoor apparel and equipment
under THE NORTH FACE(R) brand. Apparel products consist of outerwear, snowsports
gear and functional sportswear. Equipment consists of tents, sleeping bags,
backpacks, daypacks and accessories. The Company designs many of its products
for extreme applications, such as high altitude mountaineering and ice and rock
climbing, although most consumers who purchase THE NORTH FACE products do not
use them for such extreme activities. Products are sold through specialty
outdoor and premium sporting goods stores.
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NO CASH PROCEEDS TO THE COMPANY
This exchange offer is intended to satisfy certain of our obligations under
the exchange and registration rights agreement. We will not receive any proceeds
from the issuance of the New Notes and have agreed to pay the expenses of the
exchange offer. In consideration for issuing the New Notes as contemplated in
the registration statement of which this prospectus is a part, we will receive,
in exchange, Old Notes in like principal amount. The form and terms of the New
Notes are identical in all material respects to the form and terms of the Old
Notes, except as otherwise described herein under "The Exchange Offer -- Terms
of the Exchange Offer." The Old Notes surrendered in exchange for the New Notes
will be retired and canceled and cannot be reissued. Accordingly, issuance of
the New Notes will not result in any increase in our outstanding debt.
CAPITALIZATION OF V.F. CORPORATION
The following table sets forth the unaudited consolidated summary
capitalization at September 30, 2000 of V.F. Corporation. The table should be
read in conjunction with our consolidated financial statements and related notes
and other financial data included in our Annual Report on Form 10-K for the
fiscal year ended January 1, 2000, and our Quarterly Report on Form 10-Q for the
nine month period ended September 30, 2000.
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<CAPTION>
AT SEPTEMBER 30, 2000
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(IN MILLIONS)
<S> <C>
Cash and Equivalents........................................ $ 233
======
Short-term Debt (including current portion of Long-term
Debt)..................................................... $ 474
Long-term Debt.............................................. 906
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Total Debt............................................. 1,380
Redeemable Preferred Stock.................................. 49
Common Shareholders' Equity
Common Stock, par value $1 per share...................... 114
Additional Paid-in Capital................................ 832
Accumulated Other Comprehensive Loss...................... (95)
Retained Earnings......................................... 1,401
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Total Common Shareholders' Equity...................... 2,252
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Total Debt, Redeemable Preferred Stock and Common
Shareholders' Equity...................................... $3,681
======
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SELECTED FINANCIAL INFORMATION
The following selected financial data (except for the ratio of earnings to
fixed charges and the ratio of earnings to combined fixed charges and preferred
stock dividends) are derived from the consolidated financial statements of the
Company which have been audited by PricewaterhouseCoopers LLP, independent
accountants, for the 1999 and 1998 fiscal years, and by its predecessor Coopers
& Lybrand L.L.P. for fiscal years 1995 through 1997. The selected financial data
for the nine month periods ended September 30, 2000 and October 2, 1999,
respectively, are derived from unaudited financial statements. The unaudited
financial statements include all adjustments, consisting of normal recurring
accruals, which we consider necessary for a fair presentation of the financial
position and the results of operations for these periods. Operating results for
the nine month period ended September 30, 2000 are not necessarily indicative of
the results that may be expected for the entire 2000 fiscal year. The data
should be read in conjunction with the consolidated financial statements,
related notes, and other financial information included or incorporated by
reference herein.
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEARS ENDED
-------------------------- ----------------------------------------------------------------
SEPTEMBER 30, OCTOBER 2, JANUARY 1, JANUARY 2, JANUARY 3, JANUARY 4, DECEMBER 30,
2000 1999 2000 1999 1998 1997 1995
------------- ---------- ---------- ---------- ---------- ---------- ------------
(IN MILLIONS, EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales......................... $4,306 $4,188 $5,552 $5,479 $5,222 $5,137 $5,062
Operating income.................. 473 485 653 684 605 557 347
Interest expense.................. 62 54 71 62 50 63 77
Other income, net................. 8 6 14 10 31 14 14
Income before income taxes........ 419 437 596 632 586 508 284
Income taxes...................... 157 168 229 243 235 209 127
Net income........................ 262 269 366 388 351 300 157
Ratio of earnings to fixed charges
(1)............................. 6.4x 7.3x 7.4x 8.5x 9.1x 7.0x 3.8x
Ratio of earnings to combined
fixed charges and preferred
stock dividends (2)............. 6.2x 7.0x 7.1x 8.1x 8.6x 6.6x 3.7x
Per common share data:
Earnings -- Basic............... $ 2.26 $ 2.22 $ 3.04 $ 3.17 $ 2.76 $ 2.32 $ 1.20
Earnings -- Diluted............. 2.22 2.19 2.99 3.10 2.70 2.28 1.19
Cash dividends.................. 0.66 0.63 0.85 0.81 0.77 0.73 0.69
Average number of common and
common equivalent shares:
Basic........................... 115 119 119 121 126 127 127
Diluted......................... 118 123 122 125 130 131 131
BALANCE SHEET DATA
(AT END OF PERIOD):
Working capital................... $1,120 $ 788 $ 764 $ 815 $ 836 $ 940 $ 799
Intangible assets................. 1,122 998 992 952 814 864 888
Total assets...................... 4,721 4,182 4,027 3,837 3,323 3,450 3,447
Short-term debt................... 359 462 409 245 24 18 230
Current portion of long-term
debt............................ 116 1 5 1 0 1 3
Long-term debt.................... 906 523 518 522 516 519 614
Redeemable preferred stock........ 49 52 52 54 56 58 61
Deferred contribution to employee
stock ownership plan............ (9) (16) (14) (20) (26) (32) (37)
Common shareholders' equity....... 2,252 2,153 2,164 2,066 1,867 1,974 1,772
CASH FLOW DATA:
Depreciation...................... $ 102 $ 101 $ 134 $ 128 $ 129 $ 132 $ 134
Amortization of intangible
assets.......................... 26 25 33 33 28 28 34
</TABLE>
---------------
(1) For the purposes of this ratio, fixed charges consist of interest expense,
capitalized interest and one-third of rental expense, which approximates the
interest factor of such rental expense.
(2) For the purposes of this ratio, fixed charges consist of interest expense,
capitalized interest and one-third of rental expense, which approximates the
interest factor of such rental expense. Preferred stock dividends relate to
the outstanding Series B Preferred Stock held by the Employee Stock
Ownership Plan.
9
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS FOR THE QUARTER AND NINE MONTHS ENDED
SEPTEMBER 30, 2000
RECENT DEVELOPMENTS
During the second quarter of 2000, the Company acquired the trademark
rights to the CHIC(R) brand name and the rights to the H.I.S.(R) brand name
outside of Europe. The Company also acquired approximately 81% of the common
stock of The North Face, Inc. on May 24 and the Eastpak backpack and daypack
business on May 26. During the third quarter of 2000, the Company acquired the
trademarks and inventory of the Gitano(R) brand and the remaining 19% of the
common stock of The North Face. The purchase prices totaled $269.5 million,
including the repayment of $107.7 million of indebtedness. These acquisitions
have been accounted for as purchases, and accordingly, operating results have
been included in the financial statements from the dates of acquisition. The net
assets of these companies are included in the Company's financial presentation
based on preliminary allocations of the purchase prices, with approximately
$152.2 million representing intangible assets to be amortized over 40 years.
Final asset and liability valuations are not expected to have a material effect
on the financial statements.
Subsequent to the end of the third quarter, the Company acquired
approximately 84% of the outstanding shares of H.I.S. Sportswear AG, which owns
the H.I.S. trademarks in Europe and markets H.I.S. products in Europe, for an
aggregate purchase price of approximately $44 million.
On November 17, 2000, the Company announced a series of actions to position
itself to achieve its long-term earnings growth target of 8% to 10%. In
conjunction with these actions, the Company announced that it will take a charge
to fourth quarter earnings of approximately $120 million to $140 million, or
$.68 to $.79 per share. The cash requirement related to these actions is
approximately $40 million. As a result of these actions, excluding charges, the
Company expects to report earnings per share between $2.95 and $3.00 for the
fiscal year ended January 1, 2001. Following are some of the specific actions
the Company is taking to improve profitability in underperforming units and
further reduce costs across its businesses:
- EXIT OF NONSTRATEGIC WORKWEAR BUSINESSES. Following an analysis of its
workwear operations, the Company has decided to discontinue several of
the more complex pieces of businesses acquired in 1998 and 1999 that have
impacted profitability. Accounting for approximately $40 million in
annual sales, the discontinued businesses include napery and certain
customized and catalog programs serving primarily small businesses.
- NEW JEANS STRATEGY IN JAPAN. To combat changing market conditions in
Japan and unite the management of its Wrangler and Lee brands under a
single entity, the Company has agreed to transfer the license for the
Wrangler brand to Lee Japan Co. Ltd., a subsidiary of Tokyo-based Edwin
Co. Ltd. Edwin has successfully marketed the Lee brand in Japan under a
licensing agreement since 1987. The Company's annual sales of Wrangler in
Japan were approximately $60 million.
- ADDITIONAL COST SAVING ACTIONS. Other actions the Company is taking to
reduce costs include the consolidation of several distribution centers in
both the U.S. and Europe, a general reorganization of its Latin American
jeans business, and a restructuring of its international intimates
business.
RESULTS OF OPERATIONS
Consolidated sales increased 8% for the third quarter and 3% for the nine
months ended September 30, 2000, compared with 1999. In translating foreign
currencies to the U.S. dollar, a stronger U.S. dollar reduced sales comparisons
by $19 million in the third quarter of 2000 (earnings per share by $.02) and by
$50 million in the nine months ended September 30, 2000 (earnings per share by
$.04).
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<PAGE> 13
Gross margins were 33.9% of sales in the third quarter of 2000, compared
with 34.3% in the prior year quarter. Gross margins were 34.2% in both nine
month periods. Gross margins improved in most businesses due to the continuing
shift to lower cost sourcing, lower raw material costs and improved operating
efficiencies. These improvements were offset by declines in occupational apparel
resulting from complexities created by the integration of recent acquisitions.
Marketing, administrative and general expenses were 22.0% of sales during
the quarter and 22.9% in the nine months of 2000, compared with 21.4% and 22.4%
in the 1999 periods. The higher expense ratios in 2000 resulted from recently
acquired companies, which sell to upper tier distribution channels that
traditionally require higher levels of marketing expenditures.
Other operating expense, which includes amortization of intangible assets
and net royalty income, increased in 2000 due to amortization of intangible
assets related to the businesses acquired in 2000.
Net interest expense increased 29% in the third quarter and 18% in the nine
months of 2000, compared with the same periods in 1999. The increase is due to
higher average short-term borrowings to support acquisitions, as well as higher
short-term borrowing rates in 2000.
The effective income tax rate for the nine months of 2000 was 37.5%, based
on the expected rate for the year, compared with 38.4% in the prior year. The
lower tax rate for 2000 is due to an expected reduction in foreign operating
losses with no benefit, reduction in state income taxes and an increase in
employment-related tax credits.
Net income decreased 3% during both the third quarter and nine months of
2000. Basic earnings per share were the same for the third quarter and increased
2% in the nine months, including the benefit of the Company's share repurchase
program. The 2000 acquisitions are expected to have a dilutive impact for the
year 2000 of $.10 to $.15 per share, with the majority of this in the fourth
quarter.
INFORMATION BY BUSINESS SEGMENT
The Consumer Apparel segment consists of jeanswear, women's intimate
apparel, swimwear and the children's apparel businesses. Overall, this segment's
sales increased 1% for the third quarter of 2000 and decreased 1% for the nine
months, compared with the same periods of 1999. Domestic jeans sales increased
9% in the third quarter and 4% for the nine months, led by increases in the
Company's domestic Western and Mass Market businesses in both periods. Sales
also increased in the third quarter at Lee. International jeanswear sales
declined 4% in the third quarter and 6% in the nine months primarily due to the
effects of foreign currency. Excluding the effects of currency translation,
European jeanswear sales increased 2% in the quarter and declined 3% in the nine
months.
Sales in Asia, however, declined for both the quarter and the nine months
as a result of a declining premium jeans market in Japan and difficult overall
economic conditions within the country. Domestic intimate apparel sales declined
7% in the quarter and 9% in the nine months, with increases in the Vanity Fair
and Lily of France brands offset by lower private label and Vassarette brand
sales. Playwear sales were flat for the quarter, but increased in the nine
months of 2000 due to increased sales in NIKE branded product. Segment profit
increased 11% for the quarter and 8% for the nine months of 2000, due to
increases in domestic jeanswear sales and profitability in both periods.
International jeanswear profit increased significantly in the quarter but was
down slightly in the nine months. While European jeanwear profit increased in
both the quarter and nine months, profits in Asia declined in both periods.
The Occupational Apparel segment includes the Company's industrial, career
and safety apparel businesses. Sales increased during the nine months of 2000
due to acquisitions made during 1999. This segment's profit decreased in the
third quarter and nine months due to
11
<PAGE> 14
manufacturing and distribution inefficiencies related to integration of the four
businesses acquired in late 1998 and early 1999.
The All Other segment includes the Company's knitwear, daypack and outdoor
businesses. Sales increased in the third quarter and nine months due to the
acquisitions of Eastpak and The North Face. Segment profit increased in the
quarter due to the 2000 acquisitions.
Management will continue to address profitability issues within its
underperforming units. Any actions resulting from this evaluation could have an
impact on operating results. From time to time, the Company engages in
acquisitions or dispositions of companies or assets. Except as disclosed herein,
there are no current agreements or understandings with respect to any material
acquisitions or dispositions.
ANALYSIS OF FINANCIAL CONDITION
The financial condition of the Company is reflected in the following:
<TABLE>
<CAPTION>
SEPTEMBER 30 JANUARY 1 OCTOBER 2
2000 2000 1999
------------ --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Working capital............................... $ 1,119.6 $ 763.9 $ 788.4
Current ratio................................. 1.9 to 1 1.7 to 1 1.6 to 1
Debt to total capital......................... 38.0% 30.1% 31.4%
</TABLE>
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. In addition, in June 2000,
the Company entered into a $100.0 million unsecured revolving credit agreement
that terminates in December 2000. Terms for this facility are similar to the
terms of the $750.0 million credit agreement. There are no borrowings
outstanding under these agreements.
Accounts receivable at the end of the third quarter of 2000 are higher than
at the end of the same period in 1999 due to higher sales. The number of days
sales outstanding in accounts receivable at the end of the third quarter periods
are flat. Receivables are higher than at the end of 1999 due to higher sales in
the third quarter of 2000 and seasonal sales patterns.
Inventories at the end of the third quarter of 2000 are 15% higher than at
the comparable date in 1999 due to higher inventories in occupational apparel
resulting from operating inefficiencies related to integration of the businesses
acquired in 1998 and 1999, higher days of inventory in recently acquired
companies and expected increases in sales. Excluding the 2000 acquisitions,
inventory balances would have been 6% higher. Inventories are higher than at the
end of 1999 due to seasonal sales patterns and the impact of acquisitions
completed during 2000.
Accrued liabilities at the end of the quarter are higher than year-end due
to seasonal patterns.
On September 29, 2000, the Company issued $500.0 million in principal
amount of long-term notes.
As of October 27, 2000, substantially all of the net proceeds of $495.2
million had been used to reduce short-term borrowings.
During the first nine months of 2000, the Company repurchased 2.6 million
shares of its Common Stock in open market transactions for a total cost of $64.2
million. Under its current authorization from the Board of Directors, the
Company may repurchase up to an additional 5.4 million common shares. For
information regarding the Company's exposure to certain market risks, see Item
7A, Quantitative and Qualitative Disclosures about Market Risk, in the annual
report on Form 10-K for fiscal 1999. There have been no significant changes in
the Company's market risk exposures since year-end.
12
<PAGE> 15
ANALYSIS OF OPERATIONS FOR THE FISCAL YEARS 1999, 1998 AND 1997
RESULTS OF OPERATIONS
Consolidated sales rose 1% to a record $5,551 million in 1999. The sales
increase in 1999 was primarily due to the acquisitions of occupational apparel
businesses in late 1998/early 1999 and jeanswear businesses in South America,
offset in part by a slowdown of jeanswear sales in Europe and in the mid-tier
channel in the U.S. Sales in 1998 rose 5% over the 1997 level, due primarily to
the acquisition of Bestform Group, Inc., a major manufacturer and marketer of
women's intimate apparel.
Gross margins were 34.1% of sales in 1999, compared with 34.5% in 1998 and
34.1% in 1997. Margins were favorably impacted during the last two years from
the continuing shift to lower cost sourcing, lower raw material costs and
increased operating efficiencies. However, in 1999 this was offset by lower
gross margins in the domestic Lee jeanswear, European jeanswear and workwear
businesses. In jeanswear, these reductions resulted from lower than anticipated
volume and the resulting impact in expense absorption, as well as the need to
reduce inventory levels closer to demand. In workwear, lower margins resulted
from the newly acquired companies.
For the United States market, we manufacture our products in owned domestic
plants and offshore plants, primarily in Mexico. In addition, we contract
production from independent contractors mostly located outside of the U.S. There
has been a shift over the last three years toward a more balanced sourcing mix,
with more products being manufactured in and contracted from lower cost
facilities in Mexico and the Caribbean Basin. The amount of domestic sales
derived from products sewn outside the United States has increased each year so
that now 65% is sourced from international locations. Similarly, in foreign
markets, sourcing is being shifted from higher cost owned plants located
primarily in Western Europe to lower cost owned and contracted production in
locations outside of Western Europe.
Marketing, administrative and general expenses were 22.2% of sales in 1999,
compared with 21.9% and 22.5% in 1998 and 1997, respectively. Expenses as a
percent of sales increased in 1999 primarily due to fixed short-term expenses on
a lower sales level in European jeanswear. This increase was partially offset by
lower advertising spending.
Other operating income and expense includes goodwill amortization expense,
offset by net royalty income. In each of the last two years, amortization of
goodwill increased from acquisitions completed during those years, and net
royalty income declined from the conversion of certain formerly licensed
businesses to owned operations.
Net interest expense increased in each of the last two years due to higher
short-term borrowings related to the business acquisitions. Interest income
includes $3.0 million in 1999 and $10.5 million in 1997 related to settlements
of prior years' tax examinations.
The effective income tax rate was 38.5% in 1999 and 1998 and 40.1% in 1997.
The effective rate declined in 1998 due to a reduction in foreign operating
losses with no current tax benefit, lower state income taxes and higher tax-free
income attributable to investments that fund certain deferred compensation
plans.
INFORMATION BY BUSINESS SEGMENT
The Consumer Apparel segment sales were relatively flat in 1999. Record
sales in mass market domestic jeanswear sold in the discount channel and sales
in the newly acquired Latin American jeanswear businesses offset declines
reported in the Lee branded domestic business and in European jeanswear
businesses. The decline in Lee was due to softness in retail sales in mid-tier
department stores in the U.S., and the decline in Europe was due to a consumer
shift away from basic jeans products to alternative fabrics and stylings.
Segment profit in 1999 declined due to lower sales in Lee, lower sales in
Europe, European jeanswear consolidation efforts that created operating
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<PAGE> 16
difficulties, and a $6 million charge to close the Jantzen women's sportswear
division. In 1998, segment sales advanced due to the acquisition of Bestform and
growth in all categories of domestic jeanswear, offset in part by the
elimination of unprofitable children's playwear product lines. Segment profit in
1998 increased due to the acquisition of Bestform and higher profitability in
domestic jeanswear, existing intimate apparel businesses and children's
playwear, offset in part by a modest decline in European jeanswear.
The Occupational Apparel segment sales increased in 1999 over the prior two
years due to one acquisition in the latter part of 1998 and three acquisitions
in early 1999. Segment profit as a percent of sales declined from 1997 and 1998
due to the lower level of profitability of the acquired businesses and to
systems, distribution and other costs incurred to integrate these new businesses
into our existing infrastructure.
The decline in sales and segment profit in the All Other segment over the
last two years is due to difficult market conditions existing in the knitwear
market.
ANALYSIS OF FINANCIAL CONDITION
In managing our capital structure, we balance financial leverage with
equity to reduce our overall cost of capital, while providing the flexibility to
pursue investment opportunities that may become available. It is our goal to
maintain a debt to capital ratio of less than 40%. Our debt to capital ratio has
remained within these guidelines: 30.1% at the end of 1999 and 27.1% at the end
of 1998.
BALANCE SHEETS
Accounts receivable increased in 1999 due to higher December sales and
slightly higher days sales outstanding in the recently acquired companies.
Inventories increased slightly in 1999 due to balances at recently acquired
companies being higher than historic levels. Excluding businesses acquired in
1999, inventories declined by 6%.
Intangible assets increased during 1999 due to the acquisitions completed
during the year. Other assets increased during 1999 due to an increase in
deferred income tax assets over the 1998 level and an increase in life insurance
contracts and other investment securities underlying our deferred compensation
and retirement programs.
The deficit in the Accumulated Other Comprehensive Income component of
Common Shareholders' Equity increased during 1999 due to foreign currency
translation adjustments resulting from the strengthening of the U.S. dollar in
relation to the currencies of most European countries where the Company has
operations.
LIQUIDITY AND CASH FLOWS
Working capital was $763.9 million and the current ratio was 1.7 to 1 at
the end of 1999, compared with $815.1 million and 1.8 to 1 at the end of 1998.
The decline in 1999 was due to an increase in short-term borrowings.
The primary source of liquidity is our strong cash flow provided by
operations, which was $423.4 million in 1999, $429.3 million in 1998 and $460.7
million in 1997. In 2000, cash flow from operations should exceed $400 million.
Capital expenditures were $150.1 million in 1999, compared with $189.1
million and $154.3 million in 1998 and 1997, respectively. Capital expenditures
relate to expansion of offshore manufacturing capacity, primarily in jeanswear,
investments in information systems and ongoing capital improvements in our
worldwide manufacturing and other facilities. Capital expenditures in 2000 are
expected to be comparable with the 1999 level and to be funded by cash flow from
operations.
14
<PAGE> 17
During 1999, the Company purchased 4.0 million shares of its Common Stock
in open market transactions at a cost of $149.1 million. During 1998, the
Company purchased 3.2 million shares for $147.4 million. Depending on the level
of acquisition opportunities during 2000, we intend to continue to invest
available cash flow to repurchase shares.
Cash dividends totaled $.85 per common share in 1999, compared with $.81 in
1998 and $.77 in 1997. The dividend payout rate was 28% in 1999, compared with
26% in 1998 and 28% in 1997. The indicated annual dividend rate for 2000 is $.88
per share. We have paid dividends on our Common Stock annually since 1941 and
intend to maintain a long-term payout rate of 30%.
With our strong financial position, unused credit lines and additional
borrowing capacity, the Company has substantial liquidity and flexibility to
meet investment opportunities that may arise.
EURO CURRENCY CONVERSION
Effective January 1, 1999, 11 of the 15 member countries of the European
Union established fixed conversion rates between their existing currencies and a
single new currency, the "euro." During a transition period through June 2002,
business transactions can be conducted in both the euro and the legacy
currencies. After that date, the euro will be the sole currency of the
participating countries. Approximately 11% of the Company's 1999 sales were
generated in the European Union.
We are evaluating the many areas involved with introduction of the euro,
including information technology systems. As of January 1, 2000, substantially
all of these systems were euro compliant, with the remainder expected to be
compliant by the end of 2000. We are also evaluating the strategic implications
of adoption of the euro, including pricing and distribution of our products.
Although this evaluation is ongoing, it is likely that the euro will lead to a
more uniform pricing in all European markets, including those that have not
adopted the euro as their common currency.
We are unable to determine the financial impact of the conversion on our
operations, if any, because the impact will depend on the competitive situations
that exist in the various regional markets. However, we believe that the
conversion to the euro will not have a material effect on the Company's results
of operations or financial position. All costs relating to the conversion to the
euro, which are not significant, are being expensed as incurred.
YEAR 2000 UPDATE
The Year 2000 issue relates to computer systems that may not properly
recognize date-sensitive information when the year changed to 2000. Since
entering the year 2000, we have not experienced any disruptions to our business,
nor are we aware of any significant Year 2000 issues impacting our suppliers and
customers. In 2000 we will continue to monitor our critical systems but do not
anticipate any exposures from our internal systems or from the activities of our
suppliers and customers. The total cost of resolving the Year 2000 issues,
including internal personnel and outside vendors and consultants, was $26
million over the period 1997 through 1999, which was expensed as incurred.
RISK MANAGEMENT
The Company is exposed to a variety of market risks in the ordinary course
of business, including the effects of changes in interest rates, foreign
currency exchange rates and the value of marketable securities. We regularly
assess these potential risks and have policies and procedures to manage these
risks.
The Company limits its risk from interest rate fluctuations on its net
income and cash flows by managing its mix of long-term borrowings at fixed
interest rates and short-term borrowings at variable interest rates. The Company
may also use derivative instruments to minimize its interest rate risk. The
primary interest rate exposure, which is not significant, relates to short-term
domestic and foreign borrowings. These borrowings averaged $430 million during
1999 and $245 million
15
<PAGE> 18
during 1998. In addition, at the end of 1998, the Company had an interest rate
swap contract related to $100 million of long-term debt. This swap expired in
October 1999.
The Company has assets and liabilities in foreign subsidiaries that are
subject to fluctuations in foreign currency exchange rates. Investments in these
primarily European subsidiaries are considered to be long-term investments, and
accordingly, the Company uses a functional currency other than the U.S. dollar.
The Company does not hedge these net investments and does not hedge the
translation of foreign currency operating results into the U.S. dollar. In
addition, a growing percentage of the total product needs to support our
domestic businesses are manufactured in Company-owned plants in foreign
countries or by foreign contractors. The Company's primary foreign currency
exposures relate to the euro and to the Mexican peso. We monitor foreign
currency exposures and may in the ordinary course of business enter into
derivative contracts related to specific foreign currency transactions or
anticipated cash flows occurring within twelve months. The amount of these
contracts, and related gains and losses, are not material. There are no
financial instruments held for trading or speculative purposes.
The Company is exposed to changes in the overall investment securities
markets because amounts accrued under various nonqualified deferred compensation
plans are based on market values of investment funds that are selected by the
plans' participants. Changes in the market values of the participants'
underlying investment selections expose the Company to risks of stock market
fluctuations. This securities market risk is hedged by the Company's investments
in a portfolio of variable life insurance contracts and other securities that
substantially mirror the investment selections underlying the deferred
compensation liabilities. Increases and decreases in deferred compensation
liabilities are substantially offset by corresponding increases and decreases in
the market value of the Company-owned investment securities, resulting in an
insignificant net exposure to the Company's operating results and financial
position.
16
<PAGE> 19
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
This prospectus includes and may incorporate by reference forward-looking
statements within the meaning of the federal securities laws. This includes
statements concerning plans, expectations and objectives of management relating
to the Company's operations or economic performance, and assumptions related
thereto.
Forward-looking statements are made based on management's expectations and
beliefs concerning future events impacting the Company and therefore involve a
number of risks and uncertainties. Management cautions that forward-looking
statements are not guarantees and actual results could differ materially from
those expressed or implied in the forward-looking statements.
Important factors that could cause the actual results of operations or
financial condition of the Company to differ include, but are not necessarily
limited to, the overall level of consumer spending for apparel; changes in
trends in the segments of the market in which we compete; the financial strength
of the retail industry; actions of competitors that may affect our business; and
the impact of unforeseen economic changes in the markets where we compete, such
as changes in interest rates, currency exchange rates, inflation rates,
recession, and other external economic and political factors over which we have
no control.
17
<PAGE> 20
DESCRIPTION OF THE NEW NOTES
GENERAL
The Old Notes were, and the New Notes will be, governed by the indenture
which is a contract between us and United States Trust Company of New York which
acts as trustee. The trustee's main role is to enforce your rights against us if
we default. There are some limitations on the extent to which the trustee acts
on your behalf, described under "-- Events of Default -- Remedies if an event of
default occurs". U.S. Bank Trust National Association acts as registrar, paying
agent and authenticating agent, and performs administrative duties for us, such
as sending you interest payments, transferring your New Notes to a new buyer if
you sell and sending you notices. The indenture and its associated documents
contain the full legal text of the matters described in this section. The
indenture and the New Notes are governed by New York law. See "Where You Can
Find Additional Information" for information on how to obtain a copy of the
indenture.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that the transfer restrictions, registration
rights and additional interest provisions relating to the Old Notes do not apply
to the New Notes.
The Old Notes and the New Notes relating to each series will be considered
collectively to be a single class for all purposes under the indenture,
including, without limitation, waivers and amendments.
The following description of the provisions of the indenture is a summary
only. More specific terms as well as the definitions of relevant terms can be
found in the indenture and the Trust Indenture Act of 1939, which is applicable
to the indenture. We have also included references in parentheses to certain
sections of the indenture. Because this section is a summary, it does not
describe every aspect of the New Notes. This summary is subject to and qualified
in its entirety by reference to all the provisions of the indenture, including
definitions of certain terms used in the indenture.
PRINCIPAL, MATURITY AND INTEREST
The New Notes are general unsecured obligations of the Company. The New
Notes will be initially limited to $300,000,000 aggregate principal amount for
the notes due 2005 and $200,000,000 aggregate principal amount for the notes due
2010. However, the indenture does not limit the aggregate principal amount of
debt securities we may issue, and we may issue additional notes in amounts that
exceed the initial amounts at any time, without your consent and without
notifying you. The New Notes are not entitled to any sinking fund.
Each series of New Notes will mature on October 1 of its respective year of
maturity. The New Notes bear interest at the rates per annum shown on the front
cover of this prospectus from September 29, 2000, payable semi-annually on April
1 and October 1 of each year, commencing April 1, 2001.
Principal, any premium and interest on the New Notes will be payable, and
the New Notes may be presented for registration of transfer and exchange, at the
office of the registrar or another office or agency of the Company as determined
by us. At our option, payment of interest may be made by check mailed to the
holders at the addresses appearing in the registry books maintained by the
registrar for the New Notes.
OPTIONAL REDEMPTION
The New Notes will be redeemable, in whole or in part, at the option of the
Company at any time. The redemption price for each series of the New Notes will
be the greater of:
- 100% of the principal amount of each series of the New Notes to be
redeemed plus accrued interest on such New Notes to the date of
redemption; or
18
<PAGE> 21
- the sum, as determined by a quotation agent appointed by us, of the
present value of the remaining scheduled payments of principal and
interest on each series of the New Notes to be redeemed (excluding any
portion of such payments of interest accrued and paid as of the date of
redemption) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
"adjusted treasury rate", plus in the case of the notes due 2005, 15
basis points, and in the case of the notes due 2010, 25 basis points,
plus accrued interest on each series of the New Notes to be redeemed to
the date of redemption.
The "adjusted treasury rate" for any redemption date means the rate per
year equal to the semi-annual equivalent yield to maturity of the "comparable
treasury issue", assuming a price for the comparable treasury issue (expressed
as a percentage of its principal amount) equal to the "comparable treasury
price" for such redemption date. The semi-annual equivalent yield to maturity
will be computed as of the third business day immediately preceding the
redemption date.
The "comparable treasury issue" (expressed as a percentage of its principal
amount) is a United States treasury security, selected by the quotation agent,
having a maturity comparable to the remaining term of the series of the New
Notes to be redeemed that would be utilized in accordance with customary
financial practice in pricing new issues of corporate notes of comparable
maturity to the remaining term of the New Notes.
The "quotation agent" is the "reference treasury dealer" appointed by us.
The "reference treasury dealer" means:
- Goldman, Sachs & Co. and its respective successors; provided, however,
that if the foregoing shall cease to be a primary U.S. government
securities dealer (a "primary treasury dealer"), the Company shall
substitute the reference treasury dealer for another primary treasury
dealer; and
- any other primary treasury dealer selected by us.
The "comparable treasury price" for any redemption date means the average
of the reference treasury dealer quotations for such redemption date, provided
that if three or more reference treasury dealer quotations are obtained, the
highest and lowest of such quotations shall be excluded from the calculation.
The "reference treasury dealer quotations" means, for each reference
treasury dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the comparable treasury issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by such reference treasury dealer at 5:00 p.m. Eastern
Standard time on the third business day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the New Notes to be
redeemed.
Unless the Company defaults in payment of the redemption price on or after
the redemption date, interest will cease to accrue on the New Notes called for
redemption.
LEGAL OWNERSHIP -- "STREET NAME" AND OTHER INDIRECT HOLDERS
Investors who hold New Notes in accounts at banks or brokers will generally
not be recognized by us as legal holders of New Notes. This is called holding in
"street name". Instead, we would recognize only the bank or broker, or the
financial institution the bank or broker uses to hold its New Notes. These
intermediary banks, brokers and other financial institutions pass along
principal, interest and other payments on the New Notes, either because they
agree to do so in their customer
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agreements or because they are legally required to do so. If you hold New Notes
in "street name", you should check with your own institution to find out:
- How it handles note payments and notices.
- Whether it imposes fees or charges.
- How it would handle voting if ever required.
- Whether and how you can instruct it to send you New Notes registered in
your own name so you can be a direct holder as described below.
- How it would pursue rights under the New Notes if there were a default or
other event triggering the need for holders to act to protect their
interests.
DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, run only to persons who are
registered as holders of New Notes. As noted above, we do not have obligations
to you if you hold in "street name" or other indirect means, either because you
choose to hold New Notes in that manner or because the New Notes are issued in
the form of global notes as described below. For example, once we make payment
to the registered holder, we have no further responsibility for the payment even
if that holder is legally required to pass the payment along to you as a "street
name" customer but does not do so.
GLOBAL NOTES
A global note is a special type of indirectly held security, as described
above under "Legal Ownership -- 'Street Name' and Other Indirect Holders". For
global notes the ultimate beneficial owners can only be indirect holders. We do
this by requiring that the global note be registered in the name of a financial
institution we select and by requiring that the New Notes included in the global
note not be transferred to the name of any other direct holder unless the
special circumstances described below occur. The financial institution that acts
as the sole direct holder of the global note is called the "depositary". Any
person wishing to own a New Note must do so indirectly by virtue of an account
with a broker, bank or other financial institution that in turn has an account
with the depositary.
SPECIAL INVESTOR CONSIDERATION FOR GLOBAL NOTES. As an indirect holder, an
investor's rights relating to a global note will be governed by the account
rules of the investor's financial institution and of the depositary, as well as
general laws relating to New Notes transfers. We do not recognize this type of
investor as a holder of New Notes and instead deal only with the depositary that
holds the global note.
An investor should be aware that for the New Notes issued only in the form
of global notes:
- The investor cannot get New Notes registered in his or her own name.
- The investor cannot receive physical certificates for his or her interest
in the New Notes.
- The investor will be a "street name" holder and must look to his or her
own bank or broker for payments on the New Notes and protection of his or
her legal rights relating to the New Notes. See "Legal
Ownership -- 'Street Name' and Other Indirect Holders".
- The investor may not be able to sell interests in the New Notes to some
insurance companies and other institutions that are required by law to
own their New Notes in the form of physical certificates.
- The depositary's policies will govern payments, transfers, exchanges and
other matters relating to the investor's interest in the global note. We
and the trustee have no responsibility
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for any aspect of the depositary's actions or for its records of
ownership interests in the global note. We and the trustee also do not
supervise the depositary in any way.
- Payment for purchases and sales in the market for corporate bonds and
notes is generally made in next-day funds. In contrast, the depositary
will usually require that interests in a global note be purchased or sold
within its system using same-day funds. This difference could have some
effect on how global note interests trade, but we do not know what that
effect will be.
SPECIAL SITUATIONS WHEN GLOBAL NOTES WILL BE TERMINATED. In a few special
situations described later, the global note will terminate and interests in it
will be exchanged for physical certificates representing New Notes. After that
exchange, the choice of whether to hold New Notes directly or in "street name"
will be up to the investor. Investors must consult their own bank or brokers to
find out how to have their interests in New Notes transferred to their own name,
so that they will be direct holders. The rights of "street name" investors and
direct holders in the New Notes have been previously described in the
subsections entitled "Legal Ownership -- 'Street Name' and Other Indirect
Holders" and "Direct Holders".
The special situations for termination of a global note are:
- when the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary;
- when we notify the trustee that we wish to terminate the global note; or
- when an event of default on the New Notes has occurred and has not been
cured. (Defaults are discussed later under "Events of Default".)
When a global note terminates, the depositary (and not the Company or the
trustee) is responsible for identifying the institutions that will be the
initial direct holders. (Section 305)
IN THE REMAINDER OF THIS DESCRIPTION "YOU" MEANS DIRECT HOLDERS AND NOT "STREET
NAME" OR OTHER INDIRECT HOLDERS OF NEW NOTES. INDIRECT HOLDERS SHOULD READ THE
PREVIOUS SUBSECTION ENTITLED "LEGAL OWNERSHIP -- 'STREET NAME' AND OTHER
INDIRECT HOLDERS".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- ADDITIONAL MECHANICS relevant to the New Notes under normal
circumstances, such as how we give notice and where we make payments;
- Your rights under several SPECIAL SITUATIONS, such as if we merge with
another company, or if we want to change a term of the New Notes;
- Promises we make to you about how we will run our business, or business
actions we promise not to take (known as "RESTRICTIVE COVENANTS"); and
- Your rights if we DEFAULT or experience other financial difficulties.
ADDITIONAL MECHANICS -- FORM
The New Notes will be issued:
- only in registered form;
- without interest coupons; and
- in denominations that are even multiples of $1,000. (Section 302)
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The registrar acts as our agent for registering New Notes in the names of
holders. We may change this appointment to another entity or perform it
ourselves. The entity performing the role of maintaining the list of registered
holders is called the "security registrar". (Section 305)
PAYMENT AND PAYING AGENTS
We will pay interest to you if you are a direct holder of the New Notes
semi-annually at the close of business on the March 15 and September 15, prior
to the payment date, even if you no longer own the New Notes on the interest due
date. This date is called the "regular record date". (Section 307)
Holders buying and selling New Notes must work out between them how to
compensate for the fact that we will pay all the interest for an interest period
to the one who is the registered holder on the regular record date. The most
common manner is to adjust the sales price of the New Notes to prorate interest
fairly between buyer and seller. This prorated interest amount is called
"accrued interest".
Payment of interest, principal and any other money due on the New Notes
will be made at the office or agency of the Company maintained for that purpose.
That office is currently located at U.S. Bank Trust National Association, 100
Wall Street, Suite 1600, New York, N.Y. 10005. You must make arrangements to
have your payments picked up at, or wired from, that office. We may also choose
to pay interest by mailing checks.
"STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS.
We may also arrange for additional payment offices, and may cancel or
change these offices. These offices are called "paying agents". We may also
choose to act as our own paying agent. We must notify you of changes in the
paying agents for any particular series of New Notes. (Section 1002)
NOTICES
Notices regarding the New Notes will be sent only to direct holders, using
their addresses as listed in the registrar's records. (Sections 101 and 106)
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
direct holders will be repaid to us. After that two-year period, you may look
only to us for payment and not to the trustee, any other paying agent or anyone
else. (Section 1003)
SPECIAL SITUATIONS -- MERGERS AND SIMILAR EVENTS
We may not consolidate with or merge into any other person (as defined in
the indenture) or convey, transfer or lease our properties and assets
substantially as an entirety, unless:
(a) the successor person is a corporation, partnership or trust organized
and validly existing under the laws of the United States of America, any State
thereof or the District of Columbia, and expressly assumes our obligations on
the New Notes and under the indenture;
(b) after giving effect to such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, would occur and be continuing; and
(c) after giving effect to such transaction, neither we nor the successor
person, as the case may be, would immediately thereafter have outstanding
indebtedness secured by any Mortgage not permitted by the provisions of our
restrictive covenant relating to liens or, if so, shall have secured
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the New Notes equally and ratably with (or prior to) any indebtedness secured
thereby. (Section 801)
MODIFICATION AND WAIVER
There are three types of changes we can make to the indenture and the New
Notes:
- CHANGES REQUIRING YOUR APPROVAL. First, the following is a list of the
types of changes that cannot be made to the New Notes without your
approval:
- change the stated maturity of the principal or interest on a New
Note;
- reduce any amounts due on a New Note;
- reduce the amount of principal payable upon acceleration of the
maturity of a New Note following a default;
- change the place or currency of payment on a New Note;
- impair your right to sue for payment;
- reduce the percentage of holders of New Notes whose consent is
needed to modify or amend the indenture;
- reduce the percentage of holders of New Notes whose consent is
needed to waive compliance with certain provisions of the indenture
or to waive certain defaults; and
- modify any other aspect of the provisions dealing with modification
and waiver of the indenture. (Section 902)
- CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
indenture is the kind that requires a vote in favor by holders of New
Notes and Old Notes owning a majority of the principal amount of the
particular series affected. Most changes fall into this category, except
for clarifying changes and certain other changes that would not adversely
affect holders of the New Notes. The same vote would be required for us
to obtain a waiver of all or part of the restrictive covenants described
later on this page, or a waiver of a past default. However, we cannot
obtain a waiver of a payment default or any other aspect of the indenture
or the New Notes listed in the first category described previously above
under "Changes Requiring Your Approval" unless we obtain your individual
consent to the waiver. (Sections 513 and 902)
- CHANGES NOT REQUIRING APPROVAL. The third type of change does not require
any vote by holders of New Notes. This type is limited to clarifications
and certain other changes that would not adversely affect holders of the
New Notes.
New Notes will not be considered outstanding, and therefore will not be
eligible to vote, if we have deposited or set aside in trust for you money for
their payment or redemption. New Notes will also not be eligible to vote if they
have been fully defeased as described later under "Full Defeasance". (Section
101)
We will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding securities that are entitled
to vote or take other action under the indenture. In certain limited
circumstances, the trustee will be entitled to set a record date for action by
holders. If we or the trustee set a record date for a vote or other action to be
taken by holders of a particular series, that vote or action may be taken only
by persons who are holders of outstanding securities of that series on the
record date and must be taken within 180 days following the record date or a
shorter period that we may specify (or as the trustee may specify, if it set the
record date). We may shorten or lengthen (but not beyond 180 days) this period
from time to time. (Section 104)
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"STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE SEEK TO CHANGE
THE INDENTURE OR THE NEW NOTES OR REQUEST A WAIVER.
COVENANTS
In the indenture, we agree to restrictions that limit our own as well as
our subsidiaries' ability to create liens or enter into sale and leaseback
transactions.
RESTRICTIONS ON MORTGAGES AND OTHER LIENS. We will not, nor will we permit
any Subsidiary to, issue, assume or guarantee any Debt secured by a Mortgage
upon any Principal Property or on any shares of stock or indebtedness of any
Restricted Subsidiary (whether such Principal Property, shares of stock or
indebtedness is now owned or hereafter acquired) without in any such case
effectively providing that the New Notes (together with, if we shall so
determine, any other indebtedness of or guaranteed by us or such Restricted
Subsidiary ranking equally with the New Notes then existing or thereafter
created) shall be secured equally and ratably with such Debt, except that the
foregoing restrictions shall not apply to:
(i) Mortgages on property, shares of stock or indebtedness of or
guaranteed by any corporation existing at the time such corporation becomes
a Restricted Subsidiary;
(ii) Mortgages on property existing at the time of acquisition
thereof, or to secure the payment of all or part of the purchase price of
such property, or to secure Debt incurred or guaranteed for the purpose of
financing all or part of the purchase price of such property or
construction or improvements thereon, which Debt is incurred or guaranteed
prior to, at the time of, or within 120 days after the later of such
acquisition of completion of such improvements or construction or
commencement of full operation of such property;
(iii) Mortgages securing Debt owing by any Restricted Subsidiary to
the Company or another Restricted Subsidiary;
(iv) Mortgages on property of a corporation existing at the time such
corporation is merged into or consolidated with us or a Restricted
Subsidiary or at the time of a purchase, lease or other acquisition of the
property of a corporation or firm as an entirety or substantially as an
entirety by us or a Restricted Subsidiary;
(v) Mortgages on our property or that of a Restricted Subsidiary in
favor of the United States of America or any State thereof, or any
political subdivision thereof, or in favor of any other country, or any
political subdivision thereof, to secure certain payments pursuant to any
contract or statute or to secure any indebtedness incurred or guaranteed
for the purpose of financing all or any part of the purchase price or the
cost of construction of the property subject to such Mortgages (including,
but not limited to, Mortgages incurred in connection with pollution control
industrial revenue bond or similar financing);
(vi) Mortgages existing on the date of the indenture; and
(vii) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Mortgage referred to
in any of the foregoing clauses.
Notwithstanding the above, we and any one or more Subsidiaries may, without
securing the New Notes, issue, assume or guarantee secured Debt which would
otherwise be subject to the foregoing restrictions, provided that after giving
effect thereto the aggregate amount of Debt which would otherwise be subject to
the foregoing restrictions then outstanding (not including secured Debt
permitted under the foregoing exceptions) at such time does not exceed 10% of
the shareholders' equity of the Company and its consolidated Subsidiaries as of
the end of the latest fiscal year. (Section 1008)
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RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS. Sale and leaseback
transactions by us or any Restricted Subsidiary of any Principal Property
(whether now owned or hereafter acquired) are prohibited unless:
(i) the Company or such Restricted subsidiary would be entitled under
the indenture to issue, assume or guarantee Debt secured by a Mortgage upon
such Principal Property at least equal in amount to the Attributable Debt
in respect of such transaction without equally and ratably securing the New
Notes, provided that such Attributable Debt shall thereupon be deemed to be
Debt subject to the provisions described above under "Restrictions on
mortgages and other liens" or
(ii) an amount in cash equal to such Attributable Debt is applied to
the retirement of funded-non-subordinated Debt of the Company or a
Restricted Subsidiary. (Section 1009)
The restrictions described above do not apply to:
(i) such transactions involving leases for less than three years,
(ii) leases between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, or
(iii) leases of a Principal Property entered into within 120 days
after the later of the acquisition, completion of construction or
commencement of full operation of such Principal Property.
CERTAIN DEFINITIONS RELATING TO OUR RESTRICTIVE COVENANTS. Following are
the meanings of the terms that are important in understanding the restrictive
covenants previously described.
"Principal Property" is defined as any manufacturing plant or facility
located within the United States of America (other than its territories and
possessions) and owned by the Company or any subsidiary, except any such plant
or facility which, in the opinion of the Board of Directors, is not of material
importance to the business conducted by the Company and its Subsidiaries, taken
as a whole.
"Debt" is defined as indebtedness for money borrowed.
"Mortgage" is defined as any mortgage, pledge, lien or other encumbrance.
"Attributable Debt" is defined as the present value (discounted at the rate
of interest implicit in the terms of the lease) of the obligation of a lessee
for net rental payments during the remaining term of any lease.
"Subsidiary" is defined to mean any corporation, partnership or other legal
entity of which, in the case of a corporation, more than 50% of the outstanding
voting stock is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries or, in
the case of any partnership or other legal entity, more than 50% of the ordinary
equity capital interests is, at the time, directly or indirectly owned or
controlled by the Company or by one or more of the Subsidiaries or by the
Company and one or more of the Subsidiaries.
"Restricted Subsidiary" is defined as a Subsidiary which owns or leases any
Principal Property. (Section 101)
DEFEASANCE
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, we can legally release ourselves from any payment or other obligations on
each series of the New Notes (called "full defeasance") if we put in place the
following other arrangements for you to be repaid:
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- We must deposit in trust for your benefit and the benefit of all other
direct holders of the New Notes a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the New
Notes on their various due dates.
- There must be a change in current federal tax law or an IRS ruling that
lets us make the above deposit without causing you to be taxed on the New
Notes any differently than if we did not make the deposit and just repaid
the New Notes ourselves. (Under current federal tax law, the deposit and
our legal release from the New Notes would be treated as though we took
back your New Notes and gave you your share of the cash and notes or
bonds deposited in trust. In that event, you could recognize gain or loss
on the New Notes you give back to us.)
- We must deliver to the trustee a legal opinion of our counsel confirming
the tax law change described above. (Sections 1302 and 1304)
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the New Notes. You
could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims of our
lenders and other creditors if we ever become bankrupt or insolvent.
COVENANT DEFEASANCE. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the New Notes. This is called "covenant defeasance". In that event,
you would lose the protection of those restrictive covenants but would gain the
protection of having money and notes set aside in trust to repay the New Notes.
In order to achieve covenant defeasance, we must do the following:
- We must deposit in trust for your benefit and the benefit of all other
direct holders of each series of the New Notes a combination of money and
U.S. government or U.S. government agency notes or bonds that will
generate enough cash to make interest, principal and any other payments
on the New Notes on their various due dates.
- We must deliver to the trustee a legal opinion of our counsel confirming
that under current federal income tax law we may make the above deposit
without causing you to be taxed on the New Notes any differently than if
we did not make the deposit and just repaid the New Notes ourselves.
If we accomplish covenant defeasance, the following provisions of the
indenture and the New Notes would no longer apply:
- Our promises regarding conduct of our business previously described under
"Covenants," and any other covenants applicable to the series of New
Notes and described in this prospectus.
- The conditions that apply when we merge or engage in similar
transactions, as previously described under "Mergers and Similar Events".
- The events of default relating to breach of covenants, certain events in
bankruptcy, insolvency or reorganization, and acceleration of the
maturity of other debt, described below under "Events of Default".
If we accomplish covenant defeasance, you can still look to us for
repayment of the New Notes if there were a shortfall in the trust deposit. In
fact, if one of the remaining events of default occurred (such as our
bankruptcy) and the New Notes become immediately due and payable, there may be
such a shortfall. Depending on the event causing the default, you may not be
able to obtain payment of the shortfall. (Sections 1303 and 1304)
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RANKING
The New Notes are not secured by any of our property of assets.
Accordingly, your ownership of New Notes means you are one of the Company's
unsecured creditors. The New Notes are not subordinated to any of the Company's
other debt obligations and therefore they rank equally with all of the Company's
other unsecured and unsubordinated indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
The term "event of default" means any of the following:
- we do not pay interest on a New Note within 30 days of its due date;
- we do not pay the principal or any premium on a New Note on its due date;
- we do not deposit any sinking fund payment on its due date;
- we remain in breach of a restrictive covenant or any other term of the
indenture for 60 days after we receive a notice of default stating we are
in breach. The notice must be sent by either the trustee or holders of
10% of the principal amount of New Notes and Old Notes of the affected
series;
- other debt of ours totaling $50,000,000 or more defaults, our obligation
to repay it is accelerated by our lenders, and this repayment obligation
remains accelerated for 10 days after we receive a notice of default as
described in the previous paragraph; or
- we file for bankruptcy or certain other events in bankruptcy, insolvency
or reorganization occur.
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has occurred
and has not been cured, the trustee or the holders of 25% in principal amount of
the New Notes and Old Notes of the affected series may declare the entire
principal amount of all the New Notes and Old Notes of that series to be due and
immediately payable. This is called a declaration of acceleration of maturity.
If an event of default occurs because of certain events in bankruptcy,
insolvency or reorganization, the principal amount of all New Notes of that
series will be automatically accelerated, without any action by the trustee or
any holder. A declaration of acceleration of maturity may be canceled by the
holders of at least a majority in principal amount of the New Notes and Old
Notes of the affected series. (Section 502)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the holders offer the trustee reasonable protection from
expenses and liability (called an "indemnity"). (Section 603) If reasonable
indemnity is provided, the holders of a majority in principal amount of the
outstanding New Notes and Old Notes of the relevant series may direct the time,
method and place of conducting any lawsuit or other formal legal action seeking
any remedy available to the trustee. These majority holders may also direct the
trustee in performing any other action under the indenture. (Section 512)
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the New Notes, the following must occur:
- you must give the trustee written notice that an event of default has
occurred and remains uncured;
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- the holders of 25% in principal amount of all outstanding securities of
the relevant series must make a written request that the trustee take
action because of the default, and must offer reasonable indemnity to the
trustee against the cost and other liabilities of taking that action;
- the holders of a majority in principal amount of all outstanding
securities of the relevant series must not have given the trustee any
direction inconsistent with that request; and
- the trustee must have not taken action for 60 days after the receipt of
the above notice and offer of indemnity. (Section 507)
You are, however, entitled at any time to bring a lawsuit for the payment
of money due on your New Notes on or after its due date. (Section 508)
We will furnish to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
indenture and the New Notes, or else specifying any default. (Section 1004)
REGARDING THE TRUSTEE
The trustee's current address is United States Trust Company of New York,
114 West 47th Street, 25th floor, New York, NY 10036.
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture. During the existence of an event of default, the trustee will
exercise such rights and powers vested in its exercise as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
(Section 601)
The indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the trustee, should it
become a creditor of the company, to obtain payment of claims in certain cases
or to realize on certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other transactions
with the company or any affiliate. If it acquires any conflicting interest (as
defined in the indenture or in the Trust Indenture Act), it must eliminate such
conflict or resign. (Sections 608 and 613)
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Old Notes were sold by us on September 29, 2000 to the initial
purchasers pursuant to a purchase agreement, dated September 22, 2000, between
us and the initial purchasers. The initial purchasers subsequently sold the Old
Notes to "qualified institutional buyers," as defined in Rule 144A under the
Securities Act in reliance on Rule 144A and outside the United States in
accordance with Regulation S under the Securities Act. As a condition to the
initial sale of the Old Notes, V.F. Corporation and the initial purchasers
entered into the exchange and registration rights agreement. Pursuant to the
exchange and registration rights agreement, we agreed that we would:
- file with the SEC, on or prior to 90 days after the closing date, which
is the date we delivered the Old Notes to the initial purchasers, a
registration statement under the Securities Act with respect to the New
Notes; and
- use our reasonable best efforts to cause such registration statement to
become effective under the Securities Act as soon as practicable but not
later than 180 days after the closing date.
We agreed to issue and exchange New Notes for all Old Notes validly
tendered and not withdrawn before the expiration of the exchange offer. A copy
of the exchange and registration rights agreement has been filed as an exhibit
to the registration statement of which this prospectus is a part. The
registration statement is intended to satisfy certain of our obligations under
the exchange and registration rights agreement and the purchase agreement. In
the event that due to a change in current interpretations by the SEC, we are not
permitted to effect such exchange offer, it is contemplated that we will instead
file a shelf registration statement covering resales by the holders of the Old
Notes and will use our reasonable best efforts to cause such shelf registration
statement to become effective no later than 120 days after filing and to keep
such shelf registration statement effective for a maximum of two years from
after the shelf registration becomes effective.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept for exchange any and all Old
Notes validly tendered and not withdrawn prior to the expiration date.
For each $1000 principal amount of Old Notes properly tendered and not
withdrawn before the expiration date, we will give you $1000 principal amount of
New Notes.
The form and terms of the New Notes are the same as the form and terms of
the Old Notes except that:
- the exchange will be registered under the Securities Act and, therefore,
the New Notes will not bear legends restricting the transfer thereof; and
- holders of the New Notes will not be entitled to any of the exchange and
registration rights of holders of Old Notes under the exchange and
registration rights agreement, which rights will terminate upon the
consummation of the exchange offer.
The New Notes will evidence the same indebtedness as the Old Notes, which
they replace, and will be issued under, and be entitled to the benefits of, the
indenture which also authorized the issuance of the Old Notes, such that the New
Notes and the Old Notes of each series will be treated as a single class of
securities under the indenture.
As of the date of this prospectus, $300,000,000 of notes due 2005 and
$200,000,000 of notes due 2010 are outstanding, all of which are registered in
the name of Cede & Co., as nominee for DTC. Solely for reasons of
administration, we have fixed the close of business on , 2001 as the
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<PAGE> 32
record date for the exchange offer for purposes of determining the persons to
whom this prospectus and the letter of transmittal will be mailed initially.
There will be no fixed record date for determining holders of the Old Notes
entitled to participate in the exchange offer.
Holders of the Old Notes do not have any appraisal or dissenters' rights
under the Business Corporation Law of Pennsylvania or the indenture in
connection with the exchange offer. We intend to conduct the exchange offer in
accordance with the provisions of the exchange and registration rights agreement
and the applicable requirements of the Securities Act and the rules and
regulations of the SEC thereunder.
We shall be deemed to have accepted validly tendered Old Notes when, and
if, we have given oral or written notice thereof to U.S. Bank Trust National
Association, the exchange agent. The exchange agent will act as agent for the
tendering holders of Old Notes for the purpose of receiving the New Notes from
the Company.
Holders who tender Old Notes in the exchange offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the exchange offer. We will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the exchange offer.
See "The Exchange Offer -- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" shall mean 5:00 p.m., New York City time, on ,
2001, unless we, in our sole discretion, extend the exchange offer, in which
case the term "expiration date" shall mean the latest date and time to which the
exchange offer is extended.
If we determine to extend the exchange offer, we will, prior to 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
expiration date:
- notify the exchange agent of any extension by oral or written notice; and
- issue a press release or other public announcement which shall include
disclosure of the approximate number of Old Notes deposited to date.
We reserve the right, in our sole discretion:
- to delay accepting any Old Notes;
- to extend the exchange offer; or
- if, in the opinion of our counsel, the consummation of the exchange offer
would violate any applicable law, rule or regulation or any applicable
interpretation of the staff of the SEC, to terminate or amend the
exchange offer by giving oral or written notice of such delay, extension,
termination or amendment to the exchange agent. Any such delay in
acceptance, extension, termination or amendment will be followed as
promptly as practicable by a press release or other public announcement
thereof.
If the exchange offer is amended in a manner determined by us to constitute
a material change, we will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the registered holders of the
Old Notes, and we will extend the exchange offer for a period of five to ten
business days, depending upon the significance of the amendment and the manner
of disclosure to the holders, if the exchange offer would otherwise expire
during such five to ten business day period.
Without limiting the manner in which we may choose to make a public
announcement of any delay, extension, amendment or termination of the exchange
offer, we shall have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
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<PAGE> 33
INTEREST ON THE NEW NOTES
The New Notes will accrue interest at the rate of 8.10% per annum for the
notes due 2005 and 8.50% per annum for the notes due 2010 from the most recent
date to which interest has been paid on the Old Notes or, if no interest has
been paid, from September 29, 2000, payable semi-annually in arrears on April 1
and October 1 of each year beginning on April 1, 2001.
RESALE OF THE NEW NOTES
With respect to the New Notes, based upon interpretations by the staff of
the SEC set forth in certain no-action letters issued to third parties, we
believe that a holder who exchanges Old Notes for New Notes in the ordinary
course of business, who is not participating, does not intend to participate,
and has no arrangement or understanding with any person to participate in a
distribution of the New Notes, and who is not an "affiliate" of ours within the
meaning of Rule 405 of the Securities Act, will be allowed to resell New Notes
to the public without further registration under the Securities Act and without
delivering to the purchasers of the New Notes a prospectus that satisfies the
requirements of Section 10 of the Securities Act.
If any holder acquires New Notes in the exchange offer for the purpose of
distributing or participating in the distribution of the New Notes, such holder:
- cannot rely on the position of the staff of the SEC enumerated in such
no-action letters issued to third parties; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction, unless an
exemption from registration is otherwise available.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes acquired by such broker-dealer as a result of market-making or
other trading activities must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The letter of transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of any New
Notes received in exchange for Old Notes acquired by such broker-dealer as a
result of market-making or other trading activities. We will make this
prospectus, as it may be amended or supplemented from time to time, available to
any such broker-dealer that requests copies of such prospectus in the letter of
transmittal for use in connection with any such resale for a period of up to 180
days after the expiration date. See "Plan of Distribution."
PROCEDURES FOR TENDERING
To tender in the exchange offer, a holder of Old Notes must either:
- complete, sign and date the letter of transmittal or facsimile thereof,
have the signatures thereon guaranteed if required by the letter of
transmittal, and mail or otherwise deliver such letter of transmittal or
such facsimile to the exchange agent; or
- if such Old Notes are tendered pursuant to the procedures for book-entry
transfer set forth below, a holder tendering Old Notes may transmit an
agent's message (as defined below) to the exchange agent in lieu of the
letter of transmittal,
in either case for receipt on or prior to the expiration date.
In addition, either:
- certificates for such Old Notes must be received by the exchange agent
along with the letter of transmittal;
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<PAGE> 34
- a timely confirmation of a book-entry transfer (a "book-entry
confirmation") of such Old Notes into the exchange agent's account at DTC
pursuant to the procedure for book-entry transfer described below, along
with the letter of transmittal or an agent's message, as the case may be,
must be received by the exchange agent prior to the expiration date; or
- the holder must comply with the guaranteed delivery procedures described
below.
The term "agent's message" means a message, transmitted to the exchange
agent's account at DTC and received by the exchange agent and forming a part of
the book-entry confirmation, which states that such account has received an
express acknowledgment from the tendering participant that such participant has
received and agrees to be bound by the letter of transmittal and that the
Company may enforce the letter of transmittal against such participant. To be
tendered effectively, the letter of transmittal and other required documents, or
an agent's message in lieu thereof, must be received by the exchange agent at
the address set forth below under "-- Exchange Agent" prior to 5:00 p.m., New
York City time, on the expiration date.
The tender by a holder that is not withdrawn prior to the expiration date
will constitute an agreement between such holder and us in accordance with the
terms and subject to the conditions set forth herein and in the letter of
transmittal.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. DO NOT SEND THE LETTER OF TRANSMITTAL OR ANY OLD NOTES TO US.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner(s) of the Old Notes whose Old Notes are held through a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such intermediary promptly and instruct such
intermediary to tender on such beneficial owner's behalf. If such beneficial
owner wishes to tender on its own behalf, such owner must, prior to completing
and executing the letter of transmittal and delivering such owner's Old Notes:
- make appropriate arrangements to register ownership of the Old Notes in
such owner's name; or
- obtain a properly completed bond power from the registered holder.
The transfer of registered ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal described
below (see "-- Withdrawal of Tenders"), as the case may be, must be guaranteed
by an eligible institution unless the Old Notes tendered pursuant thereto are
tendered:
- by a registered holder who has not completed the box titled "Special
Delivery Instruction" on the letter of transmittal; or
- for the account of an eligible institution.
In the event that signatures on a letter of transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, such guarantee
must be made by an eligible institution, which is a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an "eligible guarantor institution"
(within the meaning of Rule 17Ad-15 under the Exchange Act) which is a member of
one of the recognized signature guarantee programs identified in the letter of
transmittal.
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<PAGE> 35
If the letter of transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder exactly as such registered holder's name appears on such Old
Notes.
In connection with any tender of Old Notes in definitive certified form, if
the letter of transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with the
letter of transmittal.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may utilize DTC's Automated Tender Offer
Program to tender Old Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Notes will be determined by
us in our sole discretion, which determination will be final and binding. We
reserve the absolute right:
- to reject any and all Old Notes not properly tendered and any Old Notes
our acceptance of which would, in the opinion of our counsel, be
unlawful; and
- to waive any defects, irregularities or conditions of tender as to
particular Old Notes.
Our interpretation of the terms and conditions of the exchange offer
(including the instructions in the letter of transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as we shall
determine. Although we intend to notify holders of defects or irregularities in
connection with tenders of Old Notes, neither we, the exchange agent nor any
other person shall incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived.
While we have no present plan to acquire any Old Notes that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any Old Notes that are not tendered pursuant to the exchange offer,
we reserve the right in our sole discretion to purchase or make offers for any
Old Notes that remain outstanding subsequent to the expiration date and, to the
extent permitted by applicable law, purchase Old Notes in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers could differ from the terms of the exchange offer.
By tendering Old Notes pursuant to the exchange offer, each holder of Old
Notes will represent to us that, among other things:
- the New Notes to be acquired by such holder of Old Notes in connection
with the exchange offer are being acquired by such holder in the ordinary
course of business of such holder;
- such holder is not participating, does not intend to participate, and has
no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the New Notes;
- such holder acknowledges and agrees that any person who is participating
in the exchange offer for the purpose of distributing the New Notes must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale of the New Notes
acquired by such person and cannot rely on the position of the staff of
the SEC set forth in certain no-action letters;
- such holder understands that a secondary resale transaction, described
above, and any resales of New Notes obtained by such holder in exchange
for Old Notes acquired by such holder directly from us should be covered
by an effective registration statement containing
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<PAGE> 36
the selling security holder information required by Item 507 or Item 508,
as applicable, of Regulation S-K of the Commission; and
- such holder is not an "affiliate", as defined in Rule 405 under the
Securities Act, of ours.
If the holder is a broker-dealer that will receive New Notes for such
holder's own account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities, such holder will be
required to acknowledge in the letter of transmittal that such holder will
deliver a prospectus in connection with any resale of such New Notes; however,
by so acknowledging and by delivering a prospectus, such holder will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
RETURN OF OLD NOTES
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the exchange offer will be made only after timely receipt
by the exchange agent of:
- Old Notes or a timely book-entry confirmation of such Old Notes into the
exchange agent's account at DTC; and
- a properly completed and duly executed letter of transmittal and all
other required documents, or an agent's message in lieu thereof.
If any tendered Old Notes are not accepted for any reason set forth in the
terms and conditions of the exchange offer or if Old Notes are withdrawn or are
submitted for a greater principal amount than the holders desire to exchange,
such unaccepted, withdrawn or otherwise non-exchanged Old Notes will be returned
without expense to the tendering holder thereof (or, in the case of Old Notes
tendered by book-entry transfer into the exchange agent's account at DTC
pursuant to the book-entry transfer procedures described below, such Old Notes
will be credited to an account maintained with DTC) as promptly as practicable.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the Old Notes at DTC for purposes of the exchange offer within two business
days after the date of this prospectus, and any financial institution that is a
participant in DTC's systems may make book-entry delivery of Old Notes by
causing DTC to transfer such Old Notes into the exchange agent's account at DTC
in accordance with DTC's procedures for transfer. However, although delivery of
Old Notes may be effected through book-entry transfer at DTC, the letter of
transmittal or facsimile thereof, with any required signature guarantees and any
other required documents, or an agent's message in lieu of a letter of
transmittal, must, in any case, be transmitted to and received by the exchange
agent at the address set forth below under "-- Exchange Agent" on or prior to
the expiration date or pursuant to the guaranteed delivery procedures described
below.
GUARANTEED DELIVERY PROCEDURES
If a holder of the Old Notes desires to tender such Old Notes and the Old
Notes are not immediately available or the holder cannot deliver its Old Notes
(or complete the procedures for book-entry transfer), the letter of transmittal
or any other required documents to the exchange agent prior to the expiration
date, a holder may effect a tender if:
- the tender is made through an eligible institution;
- prior to the expiration date, the exchange agent receives from such
eligible institution (by facsimile transmission, mail or hand delivery) a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by us setting forth the name and
address of the holder, the certificate number(s) of such Old Notes (if
applicable) and the principal amount of Old Notes tendered, stating that
the tender is being made thereby and
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<PAGE> 37
guaranteeing that, within three New York Stock Exchange trading days
after the expiration date:
(i) the letter of transmittal (or a facsimile thereof), or an agent's
message in lieu thereof,
(ii) the certificate(s) representing the Old Notes in proper form for
transfer or a book-entry confirmation, as the case may be, and
(iii) any other documents required by the letter of transmittal,
will be deposited by the eligible institution with the exchange agent; and
- such properly executed letter of transmittal (or facsimile thereof), or
an agent's message in lieu thereof, as well as the certificate(s)
representing all tendered Old Notes in proper form for transfer or a
book-entry confirmation, as the case may be, and all other documents
required by the letter of transmittal, are received by the exchange agent
within three New York Stock Exchange trading days after the expiration
date.
Upon request to the exchange agent, a form of Notice of Guaranteed Delivery
will be sent to holders who wish to tender their Old Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the expiration date.
To withdraw a tender of Old Notes in the exchange offer, a written or
facsimile transmission notice of withdrawal must be received by the exchange
agent at its address set forth herein prior to the expiration date. Any such
notice of withdrawal must:
- specify the name of the person having deposited the Old Notes to be
withdrawn;
- identify the Old Notes to be withdrawn (including the certificate number
or numbers, if applicable, and principal amount of such Old Notes); and
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which such Old Notes were tendered
(including any required signature guarantees).
If Old Notes have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn Old Notes and
otherwise comply with the procedures of DTC. All questions as to the validity,
form and eligibility (including time of receipt) of such notices will be
determined by us, in our sole discretion, which determination shall be final and
binding on all parties.
Any Old Notes so withdrawn will be deemed not to have been validly tendered
for purposes of the exchange offer, and no New Notes will be issued with respect
thereto, unless the Old Notes so withdrawn are validly re-tendered. Properly
withdrawn Old Notes may be re-tendered by following one of the procedures
described above under "-- Procedures for Tendering" at any time prior to the
expiration date.
TERMINATION OF CERTAIN RIGHTS
All registration rights under the exchange and registration rights
agreement accorded to holders of the Old Notes (and all rights to receive
additional interest in the event of a Registration Default as defined therein)
will terminate upon consummation of the exchange offer. However, for a period of
up to 180 days after the expiration date of the exchange offer, we will keep the
registration statement effective and provide copies of the latest version of the
prospectus to any broker-dealer that requests copies of such prospectus in the
letter of transmittal for use in connection with any
35
<PAGE> 38
resale by such broker-dealer of New Notes received for its own account pursuant
to the exchange offer in exchange for Old Notes acquired for its own account as
a result of market-making or other trading activities.
EXCHANGE AGENT
U.S. Bank Trust National Association has been appointed as exchange agent
for the exchange offer. Questions and requests for assistance, requests for
additional copies of this prospectus or the letter of transmittal and requests
for a copy of the Notice of Guaranteed Delivery should be directed to the
exchange agent addressed as follows:
<TABLE>
<S> <C>
By Mail or Hand/Overnight Delivery: By Facsimile:
U.S. Bank Trust National Association (651) 244-8884
180 East 5(th) Street Confirm by Telephone:
St. Paul, MN 55101 (651) 244-1197
Attn.: Specialized Finance
</TABLE>
U.S. Bank Trust National Association also serves as Registrar, Paying Agent
and Authenticating Agent under the indenture.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by us. The principal
solicitation is being made by mail; however, additional solicitation may be made
by telegraph, facsimile transmission, telephone or in person by our officers and
regular employees or those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We, however, will pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith.
The expenses to be incurred in connection with the exchange offer,
including registration fees, fees and expenses of the exchange agent and the
Trustee, accounting and legal fees, and printing costs, will be paid by us.
We will pay all transfer taxes, if any, applicable to the exchange of Old
Notes pursuant to the exchange offer. If, however, a transfer tax is imposed for
any reason other than the exchange of the Old Notes pursuant to the exchange
offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the letter of transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the exchange offer is voluntary. Holders of the Old Notes
are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
Old Notes that are not exchanged for the New Notes pursuant to the exchange
offer will remain "restricted securities" within the meaning of Rule
144(a)(3)(iv) under the Securities Act. Accordingly, such Old Notes may not be
offered, sold, pledged or otherwise transferred except:
- to a person whom the seller reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its
own account or for the account of a qualified institutional buyer in a
transaction meeting the requirements of Rule 144A;
- in an offshore transaction complying with Rule 903 or Rule 904 of
Regulation S under the Securities Act;
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<PAGE> 39
- pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available)
- pursuant to an effective registration statement under the Securities Act;
or
- pursuant to another available exemption from the registration
requirements of the Securities Act, and, in each case, in accordance with
all other applicable securities laws.
ACCOUNTING TREATMENT
For accounting purposes, we will recognize no gain or loss as a result of
the exchange offer. The expenses of the exchange offer will be amortized over
the term of the New Notes.
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<PAGE> 40
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes acquired by the broker-dealer as a result of market-making or
other trading activities must acknowledge that it will deliver a prospectus in
connection with any resale of those New Notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a participating
broker-dealer in connection with resales of New Notes received in exchange for
such Old Notes. For a period of up to 180 days after the expiration date, we
will make this prospectus, as amended or supplemented, available to any such
broker-dealer that requests copies of this prospectus in the letter of
transmittal for use in connection with any such resale.
We will not receive any proceeds from any sale of New Notes by
broker-dealers or any other persons. New Notes received by participating
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions or through the writing of options on the New Notes, or a
combination of these methods of resale, at market prices prevailing at the time
of resale or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such participating broker-dealer
that resells the New Notes that were received by it for its own account pursuant
to the exchange offer. Any broker or dealer that participates in a distribution
of New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by these persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
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<PAGE> 41
CERTAIN UNITED STATES INCOME TAX CONSIDERATIONS
The exchange of Old Notes for New Notes will not be treated as a taxable
transaction for U.S. Federal income tax purposes because the New Notes will not
be considered to differ materially in kind or in extent from the Old Notes.
Rather, the New Notes you receive should be treated as a continuation of your
investment in the Old Notes. As a result, there will be no material U.S. Federal
income tax consequences to you resulting from the exchange of Old Notes for New
Notes.
YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES
ARISING UNDER STATE, LOCAL, OR FOREIGN LAWS OF THE EXCHANGE OF OLD NOTES FOR NEW
NOTES.
VALIDITY OF THE NEW NOTES
The validity of the New Notes will be passed upon for the Company by Davis
Polk & Wardwell, New York, New York.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to V.F. Corporation's Annual Report on Form 10-K for the year ended
January 1, 2000, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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<PAGE> 42
------------------------------------------------------
------------------------------------------------------
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the Notes offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
------------------------
TABLE OF CONTENTS
Prospectus
<TABLE>
<CAPTION>
Page
----
<S> <C>
Notice to Investors.................. 1
Where You Can Find Additional
Information........................ 2
Summary.............................. 3
V.F. Corporation..................... 5
No Cash Proceeds to the Company...... 8
Capitalization of V.F. Corporation... 8
Selected Financial Information....... 9
Management's Discussion and Analysis
of Operations and Financial
Condition.......................... 10
Cautionary Statement on Forward-
Looking Statements................. 17
Description of the New Notes......... 18
The Exchange Offer................... 29
Plan of Distribution................. 38
Certain United States Income Tax
Considerations..................... 39
Validity of the New Notes............ 39
Experts.............................. 39
</TABLE>
------------------------------------------------------
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------------------------------------------------------
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$500,000,000
[VF CORPORATION LOGO]
V.F. CORPORATION
$300,000,000 8.10% New Notes
due 2005
$200,000,000 8.50% New Notes
due 2010
------------------------
PROSPECTUS
------------------------
, 2000
------------------------------------------------------
------------------------------------------------------
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1741 of the Pennsylvania Business Corporation Law, as amended (the
"BCL"), provides that a business corporation shall have the power to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. Section 1742 of the BCL provides that, in
the case of actions by or in the right of the corporation, a corporation may
indemnify any such persons only against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
such action and only if such person acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, provided that no such indemnification is permitted in respect to
any claim, issue, or matter as to which such person is adjudged liable for
negligence or misconduct in the performance of his duty to the corporation,
except to the extent that a court determines that indemnification is proper
under the circumstances. The BCL further provides under Section 1743 that, to
the extent that such person has been successful on the merits or otherwise in
defending any action (even one on behalf of the corporation), he is entitled to
indemnification for expenses (including attorneys' fees) actually and reasonably
incurred in connection with such action.
The indemnification provided for under the BCL is not exclusive of any
other rights of indemnification. Under Section 1746 of the BCL, a corporation
may maintain insurance on behalf of any of the persons referred to above against
liability asserted against any of them and incurred in or arising out of any
capacity referred to above, whether or not the corporation would have the power
to indemnify against such liabilities under the BCL. Section 518 of the
Pennsylvania Associations Code ("Section 518") provides that a Pennsylvania
corporation shall have the power, by action of the shareholders, directors, or
otherwise, to indemnify a person as to action in his official capacity and as to
action in another capacity while holding that office for any action taken or any
failure to take any action, whether or not the corporation would have the power
to indemnify the person under any other provision of law (including Section 1741
and 1742 of the BCL), except as provided in Section 518, and whether or not the
indemnified liability arises or arose from any threatened, pending, or completed
action by or in the right of the corporation. Indemnification is not authorized
pursuant to Section 518 in any case where the act or failure to act giving rise
to the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness.
In addition to the power to advance expenses under the BCL, Section 518
provides that expenses incurred by an officer, director, employee, or agent in
defending a civil or criminal action, suit, or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation. Section 518 permits a business corporation
to create a fund, under the control of a trustee or otherwise, to secure or
insure in any manner its indemnification obligations whether arising under or
pursuant to Section 518 or otherwise.
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<PAGE> 44
The registrant's By-Laws provide that any person made a party to any
lawsuit by reason of being a director or officer of the registrant may be
indemnified by the registrant, to the fullest extent permitted by Pennsylvania
law, against the reasonable expenses, including attorneys' fees, incurred by the
director or officer in connection with the defense of such lawsuit. The By-Laws
further provide that a director of the registrant shall not be personally liable
for monetary damages arising from any action taken or any failure to act by the
director unless (a) the director has breached or failed to perform the duties of
a director under Section 512 of the Pennsylvania Associations Code or as such
law may be amended from time to time and (b) the breach of duty constituted
self-dealing, willful misconduct, or recklessness. The limitation on a
director's personal liability for monetary damages does not apply to a
director's criminal liability or liability for taxes.
The registrant maintains directors' and officers' liability insurance for
expenses for which indemnification is permitted by the BCL and Section 518.
These insurance policies insure the registrant against amounts which it may
become obligated to pay as indemnification to directors and officers and insures
its directors and officers against losses (except fines, penalties, and other
matters uninsurable under law) arising from any claim made against them on
account of any alleged "wrongful act" in their official capacity. A wrongful act
is defined as "any breach of any duty, neglect, error, misstatement, misleading
statement, omission or other act done or wrongfully attempted by the directors
and officers or . . . so alleged by any claimant on any matter claimed against
them solely by reason of their being such directors or officers," subject to
certain exclusions. Directors and officers are also insured against losses
(except fines, penalties, and other matters uninsurable under law) arising out
of the insured's breach of fiduciary duty, subject to certain exclusions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
<TABLE>
<C> <S>
1.1 Purchase Agreement, dated September 22, 2000, between V.F.
Corporation and Goldman, Sachs & Co., Salomon Smith Barney
Inc., Banc of America Securities LLC and First Union
Securities, Inc., as initial purchasers.
4.1 Indenture, dated as of September 29, 2000, between V.F.
Corporation, as Issuer, and United States Trust Company of
New York, as Trustee.
4.2 Form of New Note due 2005 (included in Exhibit 4.1).
4.2 Form of New Note due 2010 (included in Exhibit 4.1).
4.3 Exchange and Registration Rights Agreement, dated as of
September 29, 2000, between V.F. Corporation and Goldman,
Sachs & Co., Salomon Smith Barney Inc., Banc of America
Securities LLC and First Union Securities, Inc.
5.1 Opinion of Davis Polk & Wardwell regarding the validity of
the New Notes.
12.1 Computation of Ratio of Earnings to Fixed Charges and Ratio
of Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
23.1 Consent of Davis Polk & Wardwell (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on the signature pages of this
registration statement).
25.1 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1 of United States Trust Company of New York,
as Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Clients.
</TABLE>
II-2
<PAGE> 45
<TABLE>
<C> <S>
99.4 Form of Letter to Nominees.
99.5 Form of Instruction to Registered Holder and/or Book-Entry
Transfer
Participant from Owner.
99.6 Form of Exchange Agent Agreement.
</TABLE>
(b) Not Applicable.
(c) Not Applicable.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than payment by
the registrant 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
registrant 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 the
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE> 46
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this registration statement on Form S-4 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Greensboro, State of
North Carolina, on this 28th day of November, 2000.
V.F. CORPORATION
By: /s/ ROBERT K. SHEARER
-----------------------------------
Robert K. Shearer
Vice President -- Finance
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below on this registration statement
hereby constitutes and appoints each of Candace S. Cummings and Robert K.
Shearer with full power to act without the other, his/her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
and for him/her and in his/her name, place and stead, in any and all capacities
(unless revoked in writing) to sign any and all amendments (including
post-effective amendments thereto) to this registration statement to which this
power of attorney is attached, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting to such attorney-in-fact and agent full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to all intents and purposes as he/she
might or could do in person, hereby notifying and confirming all that such
attorney-in-fact and agent or his/her substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MACKEY J. MCDONALD Chairman of the Board, November 28, 2000
--------------------------------------------------- President and Chief
Mackey J. McDonald Executive Officer
/s/ ROBERT K. SHEARER Vice President -- Finance November 28, 2000
--------------------------------------------------- and Chief Financial
Robert K. Shearer Officer
/s/ PETER E. KEENE Vice November 28, 2000
--------------------------------------------------- President -- Controller
Peter E. Keene and Chief Accounting
Officer
/s/ ERSKINE B. BOWLES Director November 28, 2000
---------------------------------------------------
Erskine B. Bowles
/s/ EDWARD E. CRUTCHFIELD Director November 28, 2000
---------------------------------------------------
Edward E. Crutchfield
</TABLE>
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<PAGE> 47
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ BARBARA S. FEIGIN Director November 28, 2000
---------------------------------------------------
Barbara S. Feigin
/s/ DANIEL R. HESSE Director November 7, 2000
---------------------------------------------------
Daniel R. Hesse
/s/ W. ALAN MCCOLLOUGH Director November 28, 2000
---------------------------------------------------
W. Alan McCollough
/s/ ROBERT D. BUZZELL Director November 4, 2000
---------------------------------------------------
Robert D. Buzzell
/s/ URSULA FAIRBAIRN Director November 6, 2000
---------------------------------------------------
Ursula Fairbairn
/s/ GEORGE FELLOWS Director November 28, 2000
---------------------------------------------------
George Fellows
/s/ ROBERT J. HURST Director November 6, 2000
---------------------------------------------------
Robert J. Hurst
/s/ M. RUST SHARP Director November 28, 2000
---------------------------------------------------
M. Rust Sharp
</TABLE>
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<PAGE> 48
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 Purchase Agreement, dated September 22, 2000, between V.F.
Corporation and Goldman, Sachs & Co., Salomon Smith Barney,
Inc., Banc of America Securities LLC and First Union
Securities, Inc., as initial purchasers.
4.1 Indenture, dated as of September 29, 2000, between V.F.
Corporation, as Issuer, and United States Trust Company of
New York, as Trustee.
4.2 Form of New Note due 2005 (included in Exhibit 4.1).
4.2 Form of New Note due 2010 (included in Exhibit 4.1).
4.3 Exchange and Registration Rights Agreement, dated as of
September 29, 2000, between V.F. Corporation and Goldman,
Sachs & Co., Salomon Smith Barney, Inc., Banc of America
Securities LLC and First Union Securities, Inc.
5.1 Opinion of Davis Polk & Wardwell regarding the validity of
the New Notes.
12.1 Computation of Ratio of Earnings to Fixed Charges and Ratio
of Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
23.1 Consent of Davis Polk & Wardwell (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on the signature pages of this
registration statement).
25.1 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1 of United States Trust Company of New York,
as Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Clients.
99.4 Form of Letter to Nominees.
99.5 Form of Instruction to Registered Holder and/or Book-Entry
Transfer Participant from Owner.
99.6 Form of Exchange Agent Agreement.
</TABLE>
