SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended JANUARY 1, 2000
Commission file number: 1-5256
V. F. CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
628 GREEN VALLEY ROAD, SUITE 500
GREENSBORO, NORTH CAROLINA 27408
(Address of principal executive offices)
(336) 547-6000
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, without par value, New York Stock Exchange
stated capital $1 per share and
Preferred Stock Purchase Rights Pacific Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
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As of March 7, 2000, 115,114,495 shares of Common Stock of the registrant were
outstanding, and the aggregate market value of the common shares (based on the
closing price of these shares on the New York Stock Exchange) of the registrant
held by nonaffiliates was approximately $2.0 billion. In addition, 1,669,444
shares of Series B ESOP Convertible Preferred Stock of the registrant were
outstanding and convertible into 2,671,110 shares of Common Stock of the
registrant, subject to adjustment. The trustee of the registrant's Employee
Stock Ownership Plan is the sole holder of such shares, and no trading market
exists for the Series B ESOP Convertible Preferred Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended January
1, 2000 (Item 1 in Part I and Items 5, 6, 7, 7A and 8 in Part II).
Portions of the Proxy Statement dated March 23, 2000 for the Annual Meeting of
Shareholders to be held on April 25, 2000 (Item 4A in Part I and Items 10, 11,
12 and 13 in Part III).
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PART I
ITEM 1. BUSINESS
VF Corporation, through its operating subsidiaries, designs, manufactures and
markets branded jeanswear, intimate apparel, children's playwear, occupational
apparel, knitwear and other apparel. VF Corporation, organized in 1899, oversees
the operations of its individual businesses, providing them with financial and
administrative resources. Unless the context indicates otherwise, the term
"Company" used herein means VF Corporation and its subsidiaries.
The Company manages its business through over two dozen consumer-focused
marketing units that support specific brands. Management of the individual
marketing units has the responsibility to build and develop their brands within
guidelines established by Company management. Marketing units with generally
similar products have been grouped together into three reportable business
segments - Consumer Apparel, Occupational Apparel and All Other.
Certain financial information regarding the Company's three reportable segments,
as well as geographic information and sales by product category, is included
in Note N of the Company's consolidated financial statements in the Company's
Annual Report to Shareholders for the fiscal year ended January 1, 2000 ("1999
Annual Report"), which is incorporated herein by reference.
CONSUMER APPAREL SEGMENT
JEANSWEAR AND RELATED PRODUCTS
Jeanswear and related casual products are manufactured and marketed in the
United States and in many international markets. In the United States, jeanswear
products are manufactured and marketed under the LEE(R), WRANGLER(R),
RUSTLER(R), RIDERS(R) and BRITTANIA(R) brands. The Company also offers cotton
casual pants and shirts under the LEE CASUALS(R) and TIMBER CREEK BY WRANGLER(R)
brands.
In domestic markets, LEE branded products are sold through department and
specialty stores. WRANGLER westernwear is marketed through western specialty
stores, and other WRANGLER brand products are sold primarily through the mass
merchant and discount store channels. The RUSTLER and RIDERS brands are marketed
to national and regional discount chains. Sales for all brands are generally
made directly to retailers through full-time salespersons.
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. This same data indicates that the
Company currently has the largest combined unit market share at approximately
25%, 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 international markets, the Company's largest jeanswear operation is in
Western Europe, where the Company manufactures and markets LEE, WRANGLER,
MAVERICK(R) and OLD AXE(R) jeanswear and related products. LEE and WRANGLER
jeanswear products are sold through department stores and specialty shops, while
the MAVERICK and OLD AXE brands are sold to discount stores. Jeanswear in Europe
and in most international markets is more of a fashion product and has a higher
relative price
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than similar products in the United States. Jeanswear products are sold to
retailers through the Company's sales forces and independent sales agents.
The LEE and WRANGLER brands are also marketed in Canada and Mexico.
Additionally, over the last three years, the Company has converted several
licensed operations in South America into owned operations. Currently, the
Company manufactures and markets the WRANGLER and LEE brands in several South
American countries through operations based in Brazil, Argentina and Chile.
These products are sold through department and specialty stores. Also, in late
1999, the Company acquired a business that manufactures and markets the licensed
UFO brand, a leading local jeans brand in Argentina and other countries.
The Company also manufactures and markets WRANGLER products in Japan and LEE
products in China, and participates in joint ventures in Spain and Portugal. In
foreign markets where the Company does not have owned operations, LEE and
WRANGLER jeanswear and related products are marketed through distributors,
agents or licensees.
INTIMATE APPAREL
The Company manufactures and markets women's intimate apparel under the VANITY
FAIR(R), LILY OF FRANCE(R) and the licensed OSCAR DE LA RENTA(R) labels for
sales to domestic department and specialty stores. Products include bras,
panties, daywear, shapewear, robes and sleepwear. During 1999, the Company
introduced a line of sports bras under the licensed NIKE(R) label. In addition,
the Company entered into a license agreement with Tommy Hilfiger Corporation to
produce and distribute women's intimate apparel. This line of intimates will be
in department stores for fall 2000 and will include bras, panties, daywear and
shapewear.
Women's intimate apparel is also manufactured and marketed under the
VASSARETTE(R), BESTFORM(R) AND EXQUISITE FORM(R) brands for sale to the discount
store channel of distribution. The Company also has a significant private label
lingerie business with various national chain and specialty stores in the United
States. Most products are sold through the Company's sales force.
Women's intimate apparel is also manufactured and marketed 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. Intimate
apparel is marketed in discount stores in France under the VARIANCE(R) brand. In
2000, the Company will begin marketing the VANITY FAIR, VASSARETTE, BESTFORM and
EXQUISITE FORM brands in Europe.
CHILDREN'S PLAYWEAR
Infant and children's apparel is manufactured and marketed in the United States
under the HEALTHTEX(R) and LEE brands and under the licensed NIKE brand.
Products are sold primarily to department and specialty stores. During 1999, the
HEALTHTEX brand was made available over the internet through its website,
www.healthtex.com, as the Company's first e-commerce initiative directly to
consumers.
SWIMWEAR
The Company designs, manufactures and markets an extensive line of women's
swimwear under the JANTZEN(R) trademark and the licensed NIKE label. Products
are sold primarily to department and specialty stores in the United States and
Canada through the Company's sales force. The JANTZEN
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trademark is licensed to other companies in several foreign countries. Swimwear
is also manufactured and marketed under various labels in Spain and France.
OCCUPATIONAL APPAREL SEGMENT
The Company produces 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. The Company's commitment to customer service, supported by an
automated central distribution center with several satellite locations, has
enabled customer orders to be filled within 24 hours of receipt and has helped
the RED KAP brand obtain a significant share of the industrial laundry rental
business.
Through four acquisitions since the fourth quarter of 1998, the Company has
expanded its product offerings to include restaurant apparel and linen products,
customized business uniforms and "clean room" apparel. In addition, the Company
markets safety apparel in the United States and Canada under the BULWARK(R)
brand.
ALL OTHER SEGMENT
KNITWEAR
The Company manufactures and markets knitted fleecewear and T-shirts in the
United States. Blank fleece and T-shirt products are marketed 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.
The Company also designs, manufactures and markets imprinted sports apparel
under licenses granted by the four major American professional sports leagues,
NASCAR and other parties. These sports apparel products for adults are
distributed through department, sporting goods and athletic specialty stores
under the LEE SPORT(R), NUTMEG(R) and CHASE AUTHENTICS(R) brands. CSA(R) branded
products, primarily in children's sizes, are distributed through mass
merchandisers and discount stores.
DAYPACKS AND RELATED PRODUCTS
The Company manufactures and markets JANSPORT(R) brand daypacks sold through
department and sports specialty stores and college bookstores in the United
States and through department and specialty stores in Europe. WOLF CREEK(R)
brand daypacks are marketed through discount stores in the United States.
JANSPORT daypacks and bookbags have a leading brand share in the United States.
JANSPORT branded fleece casualwear and T-shirts imprinted with college logos are
sold through college bookstores. In addition, JANSPORT backpacking and
mountaineering gear is sold through outdoor and sporting goods stores.
RAW MATERIALS AND MANUFACTURING
Raw materials include fabrics made from cotton, synthetics and blends of cotton
and synthetic yarn. The Company also purchases thread and trim (buttons,
zippers, snaps and lace) from numerous
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suppliers.
For most domestic operations, the Company purchases fabric, primarily from
several domestic suppliers, against scheduled production. Purchased fabric is
cut and sewn into finished garments in owned domestic and offshore manufacturing
facilities. In addition, the Company contracts the sewing of products from
independent contractors, primarily in foreign countries. To obtain a more
balanced sourcing mix, an increasing percentage of production is in lower cost
offshore plants, primarily in Mexico and the Caribbean Basin. By the end of
1999, approximately 65% of domestic sales were derived from products sewn
outside the United States.
In the Company's domestic knitwear and a portion of its domestic intimate
apparel businesses, operations are vertically integrated and include the entire
process of converting yarn into finished garments. The Company knits purchased
yarn into fabric in its facilities. The knit fabric is then dyed, finished and
cut in domestic facilities before it is sewn into finished garments. For the
knitwear operations, cotton yarn and cotton and synthetic blend yarn are
purchased from a major textile company under a long-term supply agreement. Yarn
is also available from numerous other sources.
For the Company's international businesses, fabric, thread and trim are
purchased from several international suppliers. In the European jeanswear
operations, fabric is cut and sewn into finished garments in owned plants in
Malta, Poland and Turkey, with the balance (mostly tops) sourced from
independent contractors. In intimate apparel, fabric is sewn into finished
garments in owned plants in France, Spain and Tunisia, with the remainder
manufactured by independent contractors. To obtain a more balanced sourcing mix,
jeanswear and intimate apparel sourcing has been shifted from owned plants in
Western Europe to lower cost owned and contracted production outside of Western
Europe. At the end of 1999, approximately 43% of international sales were
derived from Company-owned plants.
The Company did not experience difficulty in obtaining fabric and other raw
materials to meet production needs during 1999 and does not anticipate
difficulties in 2000. The loss of any one supplier would not have a significant
adverse effect on the Company's business.
SEASONALITY
The apparel industry in the United States has four primary retail selling
seasons -- Spring, Summer, Back-to-School and Holiday, while international
markets typically have Spring and Fall selling seasons. Sales to retailers
generally precede the retail selling seasons, although demand peaks have been
reduced in recent years as more products are being sold on a replenishment
basis.
Overall, with its diversified product offerings, the Company's operating results
are not highly seasonal. On a quarterly basis, consolidated net sales range from
a low of approximately 23% of full year sales in the first quarter to a high of
27% in the third quarter. Sales of knitwear products, however, are more seasonal
in nature, with approximately 57% of its sales of fleece and T-shirt products in
the second half of the year.
Working capital requirements vary throughout the year. Working capital increases
during the first half of the year as inventory builds to support peak shipping
periods, and accordingly decreases during the second half. Cash provided by
operations is substantially higher in the second half of the year due to higher
net income and reduced working capital requirements during that period.
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ADVERTISING
The Company supports its brands through extensive advertising and promotional
programs and through sponsorship of special events. The Company advertises on
national and local radio and television and in consumer and trade publications.
It also participates in cooperative advertising on a shared cost basis with
major retailers in radio, television and various print media. In addition,
point-of-sale fixtures and signage are used to promote products at the retail
level. During 1999, the Company spent $258 million advertising and promoting its
products.
OTHER MATTERS
COMPETITIVE FACTORS
The apparel industry is highly competitive and consists of a number of domestic
and foreign companies. Management believes that there is only one competitor in
the United States that has consolidated assets and sales greater than those of
the Company. However, in certain product categories in which the Company
operates, there are several competitors that have more assets and sales than the
Company in those categories.
TRADEMARKS AND LICENSES
Trademarks are of material importance to all of the Company's marketing efforts.
Company-owned brands are protected by registration or otherwise in the United
States and most other markets where the Company's brands are sold. These
trademark rights are enforced and protected by litigation against infringement
as necessary. The Company has granted licenses to other parties to manufacture
and sell products under the Company's trademarks in product categories and in
geographic areas in which the Company does not operate.
In some instances, the Company pays a royalty to use the trademarks of others.
Apparel is manufactured and marketed under licenses granted by Major League
Baseball, the National Basketball Association, the National Football League, the
National Hockey League, NASCAR, NIKE, Inc., Tommy Hilfiger Corporation and
others. Some of these license arrangements are for a short term and may not
contain specific renewal options. Management believes that the loss of any
license would not have a material adverse effect on the Company.
CUSTOMERS
The Company's customers are primarily department, chain, specialty and discount
stores in the United States and in international markets, primarily in Europe.
Sales to Wal-Mart Stores, Inc. totaled 13.0% of total sales in 1999 and 12.3% in
1998. Sales to the Company's ten largest customers amounted to 40% of total
sales in 1999 and 41% in 1998.
EMPLOYEES
The Company employs approximately 73,000 men and women. Approximately 4,100
employees are covered by various collective bargaining agreements. Employee
relations are considered to be good.
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BACKLOG
The dollar amount of backlog of orders believed to be firm as of any fiscal
year-end is not material for an understanding of the business of the Company
taken as a whole.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included in Item 1 - "Business" and Item 7 - "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
"forward-looking statements" within the meaning of the federal securities laws.
This includes any statements concerning plans and objectives of management
relating to the Company's operations or economic performance, and assumptions
related thereto. In addition, the Company and its representatives may from time
to time make other oral or written statements that are also forward-looking
statements.
These 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 that 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 the Company competes; the financial strength of
the retail industry; actions of competitors that may impact the Company's
business; and the impact of unforeseen economic changes in the markets where the
Company competes, such as changes in interest rates, currency exchange rates,
inflation rates, recession, and other external economic and political factors
over which the Company has no control.
ITEM 2. PROPERTIES.
The Company owns most of its facilities used in manufacturing, distribution and
administrative activities. Certain other facilities are leased under operating
leases that generally contain renewal options. Management believes all
facilities and machinery and equipment are in good condition and are suitable
for the Company's needs. Manufacturing and distribution facilities being
utilized at the end of 1999 are summarized below by reportable segment:
Square
Footage
----------
Consumer Apparel 14,600,000
Occupational Apparel 2,700,000
All Other 4,000,000
----------
21,300,000
==========
In addition, the Company also owns or leases various administrative and office
space having 1,200,000 square feet of space and owns or leases facilities having
2,800,000 square feet that are used for factory outlet operations. Approximately
83% of the factory outlet space is used for selling and warehousing the
Company's products, with the balance consisting of space leased to tenants and
8
common areas. Finally, the Company owns facilities having 900,000 square feet of
space formerly used in its operations but now held for sale.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a party to litigation arising in the ordinary course of its
business. In management's opinion, there are no pending claims or litigation,
the outcome of which would have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY.
The following are the executive officers of VF Corporation as of March 7, 2000.
The term of office of each of the executive officers continues to the next
annual meeting of the Board of Directors to be held April 25, 2000. There is no
family relationship among any of the VF Corporation executive officers.
Period Served
Name Position Age In Such Office(s)
- ---- -------- --- -----------------
Mackey J. McDonald Chairman of the Board 53 October 1998 to date
President October 1993 to date
Chief Executive Officer January 1996 to date
Director October 1993 to date
Candace S. Cummings Vice President - Administration 52 March 1996 to date
and General Counsel
Secretary October 1997 to date
Peter E. Keene Vice President - Controller 42 August 1999 to date
Timothy A. Lambeth Vice President - Global Processes 58 March 1999 to date
Terry L. Lay Vice President and Chairman - 52 March 1999 to date
International Coalition
Daniel G. MacFarlan Vice President 49 April 1995 to date
Chairman - Knitwear, Playwear July 1996 to date
& Intimate Apparel Coalitions
Frank C. Pickard III Vice President - Treasurer 55 April 1994 to date
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John P. Schamberger Chairman - North & South 51 February 1995 to date
America Jeanswear and
Workwear Coalitions
Vice President April 1995 to date
Robert K. Shearer Vice President - Finance and 48 July 1998 to date
Chief Financial Officer
Mr. McDonald joined the Company's Lee division in 1983, serving in various
management positions until his election as Executive Vice President of the
Wrangler division in 1986 and President of Wrangler in 1988. He was named Group
Vice President of the Company in 1991, President of the Company in 1993, Chief
Executive Officer in January 1996 and Chairman of the Board in October 1998.
Additional information is included on page 2 of the Company's definitive proxy
statement dated March 23, 2000 for the Annual Meeting of Shareholders to be held
on April 25, 2000 ("2000 Proxy Statement").
Mrs. Cummings joined the Company as Vice President - General Counsel in January
1995 and became Vice President - Administration and General Counsel in March
1996 and Secretary in October 1997. Previously, she had been a senior business
partner at the international law firm of Dechert Price & Rhoads where she had
been employed since 1972.
Mr. Keene joined the Company in 1990 as Controller at the Lee Company. In 1992,
he was named Vice President - Human Resources for Lee, and from 1994 to December
1996 he held the position of Vice President/General Manager for the Lee Casuals
and Riders businesses. He served as Chief Financial Officer for VF Knitwear
until July 1998, Chief Financial Officer for VF Europe until August 1999 and was
elected Vice President - Controller in August 1999.
Mr. Lambeth joined the Company in 1968 and has served in various finance,
administrative and marketing positions. He served as president of the Company's
Healthtex division from 1991 to 1992 and president of Lee Company from 1992 to
July 1996. He was elected a Vice President of the Company in July 1996,
President - European and Asian Operations in August 1996 and Vice President -
Global Processes in February 1999.
Mr. Lay joined the Company's Lee division in 1971 and held various positions at
both the Lee and Jantzen divisions, including Vice President - Product
Development at the Lee division from 1992 to 1994. In 1994, he was appointed
President - Wrangler Europe and later that year President - VF Europe. He served
as President of the Company's Lee division from August 1996 until he was elected
Vice President of the Company and Chairman - International Coalition in February
1999.
Mr. MacFarlan joined the Company's Jantzen division in 1978 and served in
various marketing and administrative capacities. He served as President of the
Company's VF Factory Outlet division from 1993 to 1995. He was elected as
President of the Company's Nutmeg division in 1994 and was elected as the
Company's Chairman - Decorated Knitwear and Playwear Coalitions in February
1995, which was expanded in July 1996 to Chairman - Knitwear, Playwear &
Intimate Apparel Coalitions, and Vice President in April 1995.
Mr. Pickard joined the Company in 1976 and was elected Assistant Controller in
1982, Assistant Treasurer in 1985, Treasurer in 1987 and Vice President -
Treasurer in 1994.
Mr. Schamberger joined the Company's Wrangler division in
1972 and held various positions until
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his election as President of Wrangler in 1992. He was elected as the Company's
Chairman - North & South America Jeanswear and Workwear Coalitions in February
1995 and Vice President in April 1995.
Mr. Shearer joined the Company in 1986 as Assistant Controller and was elected
Controller in 1989, Vice President - Controller in 1994 and Vice President -
Finance and Chief Financial Officer in July 1998.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information concerning the market and price history of the Company's Common
Stock, plus dividend information, as reported under the caption "Quarterly
Results of Operations" on page 20 and under the captions "Investor Information -
Common Stock, Shareholders of Record, Dividend Policy, Dividend Reinvestment
Plan, Dividend Direct Deposit and Quarterly Common Stock Price Information" on
page 36 of the 1999 Annual Report, is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the Company for each of its last five fiscal years
under the caption "Financial Summary" on pages 32 and 33 of the 1999 Annual
Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A discussion of the Company's financial condition and results of operations is
incorporated herein by reference to pages 16 to 19 of the 1999 Annual Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A discussion of the Company's market risks is included in the section "Risk
Management" incorporated herein by reference to pages 18 and 19 of the 1999
Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company and specific supplementary financial
information are incorporated herein by reference to pages 20 through 31 of the
1999 Annual Report.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
Information under the caption "Election of Directors" on pages 2 through 5 of
the 2000 Proxy Statement is incorporated herein by reference. See Item 4A with
regard to Executive Officers.
Information under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" on page 21 of the 2000 Proxy Statement is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information on pages 11 through 17 of the 2000 Proxy Statement is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information under the caption "Certain Beneficial Owners" on page 19 and "Common
Stock Ownership of Management" on page 20 of the 2000 Proxy Statement is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information under the caption "Election of Directors" with respect to Messrs.
Hurst and Sharp on page 3 and with respect to Mr. Crutchfield on page 4 of the
2000 Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial statements - Included on pages 21 through 31 of the 1999
Annual Report (Exhibit 13) and incorporated by reference in Item 8:
Consolidated statements of income - - Fiscal years ended January 1,
2000, January 2, 1999 and January 3, 1998
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Consolidated statements of comprehensive income - - Fiscal years ended
January 1, 2000, January 2, 1999 and January 3, 1998
Consolidated balance sheets - - January 1, 2000 and January 2, 1999
Consolidated statements of cash flows - - Fiscal years ended
January 1, 2000, January 2, 1999 and January 3, 1998
Consolidated statements of common shareholders' equity - - Fiscal years
ended January 1, 2000, January 2, 1999 and January 3, 1998
Notes to consolidated financial statements
Report of independent accountants
2. Financial statement schedules - The following consolidated financial
statement schedule is included herein:
Schedule II - - Valuation and qualifying accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable and
therefore have been omitted.
3. Exhibits
Number Description
------ -----------
3 Articles of incorporation and bylaws:
(A) Articles of Incorporation, as amended and restated as of
April 18, 1986 (Incorporated by reference to Exhibit 3(A)
to Form 10-K for the year ended January 4, 1992)
(B) Articles of Amendment amending Article Fifth of the
Amended and Restated Articles of Incorporation
(Incorporated by reference to Exhibit 3(B) to Form 10-Q
for the quarter ended March 4, 1998)
(C) Statement with Respect to Shares of Series B ESOP
Convertible Preferred Stock (Incorporated by reference to
Exhibit 4.2 to Form 8-K dated January 22, 1990)
(D) Articles of Amendment with Respect to Designation of
Series A Participating Cumulative Preferred Stock
(Incorporated by reference to Exhibit 3(C) to Form 10-K
for the year ended January 3, 1998)
(E) Bylaws, as amended through April 20, 1999 and as presently
in effect
4 Instruments defining the rights of security holders, including
indentures:
(A) A specimen of the Company's Common Stock certificate
(Incorporated by reference to Exhibit 3(C) to Form 10-K
for the year ended January 3, 1998)
(B) A specimen of the Company's Series B ESOP Convertible
Preferred Stock certificate (Incorporated by reference to
Exhibit 4(B) to Form 10-K for the year ended December 29,
1990)
13
(C) Indenture between the Company and Morgan Guaranty Trust
Company of New York, dated January 1, 1987 (Incorporated
by reference to Exhibit 4.1 to Form S-3 Registration No.
33-10939)
(D) First Supplemental Indenture between the Company, Morgan
Guaranty Trust Company of New York and United States
Trust Company of New York, dated September 1, 1989
(Incorporated by reference to Exhibit 4.3 to Form S-3
Registration No. 33-30889)
(E) Second Supplemental Indenture between the Company and
United States Trust Company of New York as Trustee
(Incorporated by reference to Exhibit 4.1 to Form 8-K
dated April 6, 1994)
(F) Rights Agreement, dated as of October 22, 1997, between
the Company and First Chicago Trust Company of New York
(Incorporated by reference to Exhibit 1 to Form 8-A
dated January 23, 1998)
(G) Amendment No. 1 to Rights Agreement dated as of January
28, 2000, between the Company and First Chicago Trust
Company of New York (Incorporated by reference to
Exhibit 2 to Form 8-A (Amendment No. 1) dated January
31, 2000)
10 Material contracts:
*(A) 1982 Stock Option Plan (Incorporated by reference to
Exhibit 4.1.1 of Post-Effective Amendment No. 1 to Form
S-8/S-3 Registration No. 33-26566)
*(B) 1991 Stock Option Plan (Incorporated by reference to
Exhibit A to the 1992 Proxy Statement dated March 18,
1992)
*(C) 1995 Key Employee Restricted Stock Plan (Incorporated by
reference to Exhibit 10(U) to Form 10-K for the year
ended December 30, 1995)
*(D) 1996 Stock Compensation Plan, as amended (Incorporated
by reference to Exhibit 10(A) to Form 10-Q for the
quarter ended October 2, 1999)
*(E) Annual Discretionary Management Incentive Compensation
Program
*(F) Deferred Compensation Plan
*(G) Executive Deferred Savings Plan, as amended and restated
as of September 1, 1999
*(H) Amended and Restated Supplemental Executive Retirement
Plan, dated May 16, 1989 (Incorporated by reference to
Exhibit 10(F) to Form 10-K for the year ended December
31, 1994)
*(I) Second Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Mid-Career Senior Management (Incorporated by
reference to Exhibit 10(H) to Form 10-K for the year
ended December 31, 1994)
14
*(J) Third Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Senior Management (Incorporated by reference to
Exhibit 10(I) to Form 10-K for the year ended December
31, 1994)
*(K) Fourth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Deferred
Compensation Plan (Incorporated by reference to Exhibit
10(J) to Form 10-K for the year ended December 31, 1994)
*(L) Fifth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan which funds certain benefits upon a Change in
Control (Incorporated by reference to Exhibit 10(K) to
Form 10-K for the year ended December 31, 1994)
*(M) Seventh Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Executive
Deferred Savings Plan (Incorporated by reference to
Exhibit 10(L) to Form 10-K for the year ended December
31, 1994)
*(N) Eighth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants whose Pension Plan Benefits are
limited by the Internal Revenue Code (Incorporated by
reference to Exhibit 10(M) to Form 10-K for the year
ended December 31, 1994)
*(O) Ninth Supplemental Annual Benefit Determination under
the Amended and Restated Supplemental Executive
Retirement Plan relating to the computation of benefits
for Senior Management
*(P) Resolution of the Board of Directors dated December 3,
1996 relating to lump sum payments under the Company's
Supplemental Executive Retirement Plan (Incorporated by
reference to Exhibit 10(N) to Form 10-K for the year
ended January 4, 1997)
*(Q) Form of Change in Control Agreement with senior
management of the Company (Incorporated by reference to
Exhibit 10(J) to Form 10-K for the year ended December
29, 1990)
*(R) Form of Change in Control Agreement with other
management of the Company (Incorporated by reference to
Exhibit 10(K) to Form 10-K for the year ended December
29, 1990)
*(S) Form of Change in Control Agreement with management of
subsidiaries of the Company (Incorporated by reference
to Exhibit 10(L) to Form 10-K for the year ended
December 29, 1990)
*(T) Form of Amendment to Change of Control Agreements with
senior management and other management of the Company
and with management of subsidiaries of the Company
*(U) Executive Incentive Compensation Plan (Incorporated by
reference to Exhibit 10(R) to Form 10-K for the year
ended December 31, 1994)
15
*(V) Restricted Stock Agreement (Incorporated by reference to
Exhibit 10(S) to Form 10-K for the year ended December
31, 1994)
*(W) Discretionary Supplemental Executive Bonus Plan
(Incorporated by reference to Exhibit 10(T) to Form 10-K
for the year ended December 31, 1994)
*(X) VF Corporation Deferred Savings Plan for Non-Employee
Directors (Incorporated by reference to Exhibit 10(W) to
Form 10-K for the year ended January 4, 1997)
*(Y) Mid-Term Incentive Plan, a subplan under the 1996 Stock
Compensation Plan (Incorporated by reference to Exhibit
10 (X) to Form 10-K for the year ended January 2, 1999)
(Z) Revolving Credit Agreement, dated July 15, 1999
(Incorporated by reference to Exhibit 10(B) to Form 10-Q
for the quarter ended October 2, 1999)
* Management compensation plans
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Report of PricewaterhouseCoopers LLP
24 Power of attorney
27 Financial data schedule
All other exhibits for which provision is made in the applicable
regulations of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have
been omitted.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the last quarter of the
year ended January 1, 2000.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
V.F. CORPORATION
By: /s/ Mackey J. McDonald
Mackey J. McDonald
Chairman of the Board
President
(Chief Executive Officer)
By: /s/ Robert K. Shearer
March 24, 2000 Robert K. Shearer
Vice President - Finance
(Chief Financial Officer)
By: /s/ Peter E. Keene
Peter E. Keene
Vice President - Controller
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the dates indicated:
Erskine B. Bowles Director
Robert D. Buzzell* Director
Edward E. Crutchfield Director
Ursula F. Fairbairn* Director
Barbara S. Feigin* Director March 24, 2000
George Fellows* Director
Daniel R. Hesse* Director
Robert J. Hurst* Director
Mackey J. McDonald* Director
William E. Pike* Director
L. Dudley Walker* Director
* By: /s/ C. S. Cummings March 24, 2000
---------------------------------------------
C. S. Cummings, Attorney-in-Fact
17
VF CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- -----------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------------------------
ADDITIONS
------------------------
(1) (2)
Charged to
Balance at Charged to Other Balance at
Beginning Costs and Accounts Deductions End of
Description of Period Expenses Describe Describe Period
- -----------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Fiscal year ended January 1, 2000
Allowance for doubtful accounts $52,011 $15,548 $13,082 (A) $54,477
======= ======= =========== =======
Valuation allowance for deferred
income tax assets $34,249 $22,523 $10,246 (B) $46,526
======= ======= =========== =======
Fiscal year ended January 2, 1999
Allowance for doubtful accounts $39,576 $20,802 $8,367 (A) $52,011
======= ======= =========== =======
Valuation allowance for deferred
income tax assets $32,506 $ 7,984 $6,241 (B) $34,249
======= ======= =========== =======
Fiscal year ended January 3, 1998
Allowance for doubtful accounts $40,253 $16,205 $16,882 (A) $39,576
======= ======= =========== =======
Valuation allowance for deferred
income tax assets $29,296 $ 5,337 $2,127 (B) $32,506
======= ======= =========== =======
(A) Deductions include accounts written off, net of recoveries.
(B) Deductions relate to circumstances where it is more likely than not that
deferred tax assets will be realized.
VF CORPORATION
INDEX TO EXHIBITS
Number Description
------ -----------
3 Articles of incorporation and bylaws:
(E) Bylaws, as amended through April 20, 1999 and as presently
in effect
10 Material Contracts:
(E) Annual Discretionary Management Incentive Compensation
Program
(F) Deferred Compensation Plan
(G) Executive Deferred Savings Plan, as amended and restated
as of September 1, 1999
(O) Ninth Supplemental Annual Benefit Determination under
the Amended and Restated Supplemental Executive
Retirement Plan relating to the computation of benefits
for Senior Management
(T) Form of Amendment to Change of Control Agreements with
senior management and other management of the Company
and with management of subsidiaries of the Company
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Report of PricewaterhouseCoopers LLP
24 Power of attorney
27 Financial data schedule