SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 30, 1995
Commission file number: 1-5256
-----------------
V. F. CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1047 NORTH PARK ROAD
WYOMISSING, PA 19610
(Address of principal executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, without par value, New York Stock Exchange
stated capital $1 per share and
Preferred Stock Purchase Rights Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /X/
As of March 1, 1996, 63,595,054 shares of Common Stock of the registrant were
outstanding, and the aggregate market value of the common shares (based on the
closing price of these shares on the New York Stock Exchange) of the registrant
held by nonaffiliates was approximately $2.8 billion. In addition, 1,964,942
shares of Series B ESOP Convertible Preferred Stock of the registrant were
outstanding and convertible into 1,571,953 shares of Common Stock of the
registrant, subject to adjustment. The trustee of the registrant's Employee
Stock Ownership Plan is the sole holder of such shares, and no trading market
exists for the Series B ESOP Convertible Preferred Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report for the fiscal year ended December 30, 1995
(Items 1 and 3 in Part I and Items 5, 6, 7 and 8 in Part II).
Portions of the Proxy Statement dated March 15, 1996 for the Annual Meeting of
Shareholders to be held on April 16, 1996 (Item 4A in Part I, Item 9 in Part II
and Items 10, 11, 12 and 13 in Part III).
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PART I
ITEM 1. BUSINESS
VF Corporation, through its operating subsidiaries, designs, manufactures and
markets high quality branded jeanswear, knitwear, intimate apparel, children's
playwear and other apparel. VF Corporation, organized in 1899, oversees the
operations of its subsidiaries, providing them with financial and
administrative resources. Management of each operating unit is responsible for
the growth and development of its business, within guidelines established by VF
Corporation management. Unless the context indicates otherwise, the term
"Company" used herein means VF Corporation and its subsidiaries.
1995 SPECIAL CHARGES
The Company in late 1995 recorded $155.9 million in special charges to address
changes in consumer buying habits and the increasingly competitive retail
environment that have occurred in the apparel industry. This plan included
expenses for the closings of higher cost manufacturing facilities in each of
the Company's business groups, as well as charges related to actions to reduce
selling and administrative expenses, primarily from personnel reductions at
most domestic and international headquarters locations. See Note M to the
Consolidated Financial Statements on page 30 of the Company's Annual Report to
Shareholders for the fiscal year ended December 30, 1995 ("1995 Annual
Report"), which is incorporated herein by reference.
BUSINESS GROUPS
In 1994, the Company reorganized into five new strategic business groups - -
Jeanswear, Decorated Knitwear, Intimate Apparel, Playwear and Specialty Apparel
- - - where the Company has the size, brands and growth opportunities to succeed
on a global basis. While the integrity of each of the operating divisions is
maintained, their management, as a member of one of the five business groups,
is charged with the additional responsibility of maximizing the skills and
resources available within their business group to identify opportunities for
global growth and profit improvement, develop synergies and participate in
common projects. Information regarding the operations, sales and profitability
of these business groups is included in pages 2, 3, 20, 21 and 23 of the 1995
Annual Report, which information is incorporated herein by reference.
JEANSWEAR
The Jeanswear business group is composed of the Lee and the Wrangler divisions
in the United States and in international markets, primarily in Europe. Lee
manufactures jeanswear and other casualwear sold principally under its LEE(R)
and RIDERS(R) trademarks. Wrangler manufactures jeanswear primarily under its
WRANGLER(R) and RUSTLER(R) trademarks. Wrangler also offers a line of shirts
to complement its jeanswear products. Lee and Wrangler offer a line of cotton
casual pants and shirts under the LEE CASUALS(R) and TIMBER CREEK BY
WRANGLER(R) brands. The Girbaud division, the final component of the Jeanswear
business group, licenses the MARITHe & FRANCOIS GIRBAUD(R) label to market
branded fashion jeans and casual apparel in the United States.
According to industry data, approximately 471 million pairs of jeans made of
denim, twill, corduroy and other fabrics were sold in the United States in
1995. This same data indicates that the Company currently has the largest
combined share of this market at approximately a 30% share, with WRANGLER,
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RUSTLER and LEE having the second, third and fourth largest unit shares of the
jeans market in the United States, respectively.
The Jeanswear divisions in the United States own and operate numerous cutting,
sewing and laundry facilities. During 1995, 68% of finished garments were
produced in Lee and Wrangler domestic plants and 13% in their sewing facilities
in Mexico and other Caribbean countries; the balance is manufactured by
independent contractors. With the closure of several manufacturing plants as
discussed in "1995 Special Charges", the percentage manufactured in the
Company's domestic facilities is expected to decline. Also during 1995, 64% of
the Company's Jeanswear products in Europe were produced in owned plants in the
United Kingdom, Ireland, Malta and Poland, with the balance (mostly tops)
sourced from independent contractors. During 1995, the Company acquired a
majority interest in its licensee who manufactures and markets LEE brand jeans
in Mexico. During 1994, the Company acquired a majority interest in a joint
venture in China to manufacture and market LEE brand jeans; this is the first
American jeans brand to make a major move into the Chinese market. Lee also
participates in a joint venture in Spain and Portugal. Both Lee and Wrangler
have distributors, agents or licensees for jeanswear and related products in
foreign markets where they do not have sales operations.
The Lee division markets its LEE brand products through department and
specialty stores. The Lee division's RIDERS brand is sold through the mass
merchant and discount store channels. The Wrangler division markets its
WRANGLER westernwear through western specialty stores and its other WRANGLER
brand products primarily through discount stores. The RUSTLER brand is a high
quality, lower priced brand marketed to large national discount chains.
MARITHe & FRANCOIS GIRBAUD products are sold to upscale department and
specialty stores. Sales for all divisions are generally made directly to
retailers through full-time salespersons.
In international markets, LEE and WRANGLER jeanswear and related products are
marketed to department stores and specialty shops. Sales of MAVERICK(R)
branded jeanswear in Europe have been growing in the discount channel of
distribution. Internationally, jeanswear products are sold through the Lee and
the Wrangler sales forces and independent sales agents.
DECORATED KNITWEAR
The largest single component of the Decorated Knitwear business group is
Bassett-Walker, a manufacturer of knitted fleecewear and T-shirts. Operations
are vertically integrated and include the entire process of converting cotton
yarn into finished fleece and T-shirt garments. Products are marketed by an
in-house staff of salespersons throughout the United States to national chain
and department stores, discount stores, wholesalers and garment screen printing
operators. In 1995, approximately one-third of Bassett-Walker's volume was
knitted fleecewear and T-shirts marketed under the LEE label. Bassett-Walker
also manufactures products for private label customers and supplies a
significant portion of the fleece and T-shirt needs of Nutmeg and JanSport.
In 1994, the Company substantially increased its position in imprinted apparel
with the acquisitions of Nutmeg Industries, Inc. and H.H. Cutler Company. Both
companies design, manufacture and market imprinted sports apparel under
licenses granted primarily by the four major American professional sports
leagues, NASCAR and other parties. Nutmeg also manufactures and markets
apparel imprinted with professional soccer and other sports logos in Europe.
Nutmeg's adult licensed apparel is distributed through department, sporting
goods and athletic specialty stores. The Cutler Sports Apparel division
products, primarily in children's sizes, are distributed through mass
merchandisers and
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discount stores. Approximately one-third of the products formerly bearing the
NUTMEG(R) label were marketed in 1995 under the new LEE SPORT(TM) label; use of
the LEE SPORT label will be expanded in 1996. In addition, the JanSport
college division imprints and markets JANSPORT(R) branded fleeced casualwear
and T-shirts with college logos for distribution through college bookstores.
During 1995, significant pricing pressures throughout the industry, plus the
Major League Baseball and National Hockey League strikes, adversely affected
both Nutmeg and Cutler. As part of the 1995 Special Charges, a plan was
announced to centralize the licensed sports businesses by combining the
manufacturing and distribution functions of Cutler Sports Apparel with those of
Nutmeg, while retaining their separate merchandising and marketing
organizations. This move is expected to reduce costs and provide a more
focused sports apparel group.
INTIMATE APPAREL
The Intimate Apparel business group consists primarily of Vanity Fair Mills in
the United States and several intimate apparel divisions in Europe. The Vanity
Fair division manufactures and markets bras, panties, daywear, shapewear, robes
and sleepwear products under the VANITY FAIR(R) label for domestic department
and specialty stores. In addition, Vanity Fair manufactures and markets
intimate apparel under the VASSARETTE(R) brand, which is sold through the
discount channel. Vanity Fair also maintains a rather substantial private
label business. Vanity Fair sells most of its products through its own sales
force. The VANITY FAIR brand name is licensed in several foreign countries.
Since 1992, the Company has taken decisive steps to establish a presence in
women's intimate apparel in Europe by acquiring several intimate apparel
companies and brands in France and Spain. During 1994, these businesses were
organized into a single management structure. With manufacturing plants in
France, Spain, Tunisia and Madagascar, intimate apparel is marketed in
department and specialty stores under the LOU, BOLERO and SILHOUETTE brand
names primarily in France and under the GEMMA, INTIMA CHERRY and BELCOR brand
names primarily in Spain. Intimate apparel is marketed in discount stores in
France under the VARIANCE, CARINA and SILTEX brand names.
PLAYWEAR
The Playwear business group consists of Healthtex, the playwear and sleepwear
divisions of Cutler and the preschool sizes of the Lee and the Wrangler
divisions in the United States. Products marketed under the HEALTHTEX(R) label
are sold primarily to department and specialty stores. Cutler products,
generally imprinted with characters licensed from The Walt Disney Company or
others, are marketed primarily to mass merchandise and discount stores. During
1995, Cutler introduced a line of licensed NIKE(R) brand childrenswear. LEE
and WRANGLER children's sizes are marketed in distribution channels consistent
with their respective adult sizes.
SPECIALTY APPAREL
Red Kap is a leading producer of occupational and career apparel sold primarily
under the RED KAP(R) label. Approximately three-fourths of Red Kap's sales
are to industrial laundries that in turn supply work clothes to employers,
primarily on a rental basis, for on-the-job wear by production, service and
white-collar personnel. Products include work pants, slacks, work and dress
shirts, overalls, jackets and smocks. Because industrial laundries maintain
minimal inventories of work clothes, a supplier's ability to offer rapid
delivery is an important factor in this market. Red Kap's commitment to
customer service has enabled customer orders to be filled within 24 hours of
receipt and has helped to provide
5
Red Kap with a significant share of the industrial laundry rental business. In
addition, Red Kap markets a line of work clothes nationally to retail stores
under the BIG BEN(R) brand name.
Jantzen designs, manufactures and markets an extensive line of women's
swimwear and sportswear, including coordinated tops and bottoms, primarily
under the JANTZEN(R) trademark and, beginning in 1995, under the licensed
NIKE(R) label. A significant portion of Jantzen's products are manufactured by
independent contractors. Jantzen products are sold primarily to department and
specialty stores through its sales staff. Jantzen also markets its products in
Canada, and the JANTZEN trademark is licensed to other companies in several
foreign countries.
The JanSport equipment division manufactures JANSPORT brand daypacks sold
through college bookstores and department and sporting goods stores and
JANSPORT backpacking and mountaineering gear sold primarily through outdoor and
sporting goods stores. JANSPORT daypacks and bookbags have the leading brand
share in the United States.
RAW MATERIALS
The Company's raw materials include fabrics made from cotton, synthetics and
blends of cotton and synthetic yarn. The Company purchases fabric for its
United States operations from several domestic suppliers against scheduled
production and fabric for its international operations from several
international suppliers. The fabric is cut and sewn into finished garments in
the Company's manufacturing facilities or, in certain instances, at independent
contractors. The Company also purchases thread and trim (buttons, zippers,
snaps and lace) from numerous suppliers.
The Company's Bassett-Walker division purchases substantially all of its cotton
yarn and cotton and synthetic blend yarn from a major textile company under a
long-term supply agreement. Additional yarn is available from numerous other
sources. The Vanity Fair division purchases yarn from several suppliers.
These two divisions knit the yarn into fabric, which is then cut and sewn into
finished garments.
The Company has not experienced difficulty in obtaining fabric and other raw
materials to meet production needs during 1995 and does not anticipate
difficulties in 1996. The loss of any one supplier would not have a
significant adverse effect on the Company's business.
SEASONALITY
The apparel industry in the United States has four primary retail selling
seasons -- Spring, Summer, Back-to-School and Holiday, while international
markets typically have Spring and Fall selling seasons. As an apparel
manufacturer, sales to retailers generally precede the retail selling seasons,
although demand peaks have been reduced in recent years as more products are
being sold on a replenishment basis.
Overall, with its diversified product offerings, the Company's operating
results are not highly seasonal. On a quarterly basis, consolidated net sales
range from a low of approximately 22% in the first quarter to a high of 28% in
the third quarter. Sales of the Decorated Knitwear business group, however,
are more seasonal in nature, with approximately 60% of its sales of fleece and
T-shirt products in the second half of the year.
6
Working capital requirements vary throughout the year. Working capital
increases during the first half of the year as inventory builds to support peak
shipping periods, and accordingly decreases during the second half. Generally
cash provided by operations is substantially higher in the second half of the
year due to higher net income and reduced working capital requirements during
that period.
ADVERTISING
The Company supports its brands through extensive advertising and promotional
programs and through sponsorship of special events. The Company advertises on
national and local radio and television and in consumer and trade publications.
It also participates in cooperative advertising on a shared cost basis with
major retailers in radio, television and various print media. In addition,
point-of-sale fixtures and signage are used to promote products at the retail
level. During 1995, the Company spent $231 million advertising and promoting
its products. A significant portion of the anticipated savings arising from
the 1995 cost reduction initiatives (see "1995 Special Charges") is expected to
be invested in increased advertising and other actions to support and build the
Company's brands.
OTHER MATTERS
COMPETITIVE FACTORS
The apparel industry is highly competitive and consists of a number of domestic
and foreign companies; some competitors have assets and sales greater than
those of the Company. In addition, the Company competes with a number of firms
that produce and distribute only a limited number of products similar to those
sold by the Company or sell only in certain geographic areas being supplied by
the Company.
A characteristic of the apparel industry is the requirement that a manufacturer
recognize fashion trends and adequately provide products to meet such trends.
Competitive advantage in the industry is obtained by manufacturing better
quality, market-responsive apparel and delivering to the retailer on time and
at lower cost. The Company is striving to achieve this competitive edge with
its Market Response System and proprietary FLOW REPLENISHMENT SYSTEM(R). The
FLOW REPLENISHMENT SYSTEM is capable of capturing the sale of an individual
garment at the time the consumer purchases the garment, creating and processing
all necessary documentation, and shipping the exact garment to the retailer so
that it is back on the selling store's shelf in less than seven days.
TRADEMARKS AND LICENSES
Trademarks are of material importance to all of the Company's operating
subsidiaries. Company-owned brands are protected by registration or otherwise
in the United States and most other markets where the related products are
sold. These trademark rights are enforced and protected by litigation against
infringement as necessary. The Company has granted licenses to other parties
to manufacture products under the Company's trademarks in product categories
and in geographic areas in which the Company does not operate.
In some instances, the Company pays a royalty to use the trademarks of others.
The MARITHe & FRANCOIS GIRBAUD label is under license in the United States
through 1997. Apparel is also manufactured and marketed under licenses granted
by Major League Baseball, the National Basketball
7
Association, the National Football League, the National Hockey League, The Walt
Disney Company, NIKE, Inc. and others. Some of these license arrangements are
for a short term and may not contain specific renewal options. Management
believes that loss of any license would not have a material adverse effect on
the Company.
CUSTOMERS
The Company's customers are primarily department, discount and specialty stores
in the United States and in international markets, primarily in Europe. Sales
to Wal-Mart Stores, Inc. totaled 10.5% of total sales in 1995. Sales to the
Company's ten largest customers amounted to 35% of total sales in 1995 and 34%
in 1994.
EMPLOYEES
The Company employs approximately 64,000 men and women. Approximately 6,000
employees are covered by various collective bargaining agreements. Employee
relations are considered to be good. See Note M to the Consolidated Financial
Statements on page 30 of the 1995 Annual Report, which is incorporated herein
by reference.
BACKLOG
The dollar amount of backlog of orders believed to be firm as of the end of the
Company's fiscal year and as of the end of the preceding fiscal year is not
material for an understanding of the business of the Company taken as a whole.
ITEM 2. PROPERTIES.
The Company owns most of its facilities used in manufacturing, distribution and
administrative activities. Certain other facilities are leased under operating
leases that generally contain renewal options. Management believes all
facilities and machinery and equipment are in good condition and are suitable
for the Company's needs. Manufacturing and distribution facilities being
utilized at the end of 1995 are summarized below for the Company's business
groups:
Square
Business Group Footage
----------------- ------------
Jeanswear 7,574,000
Decorated Knitwear 5,150,000
Intimate Apparel 2,517,000
Playwear 1,256,000
Specialty Apparel 2,495,000
-----------
18,992,000
===========
In addition, the Company owns or leases various administrative and office
space. The Company also owns or leases facilities having 2,775,000 square feet
of space that is used for factory outlet operations. Approximately 77% of the
factory outlet space is used for selling and warehousing the Company's
products, with the balance consisting of space leased to tenants and common
areas. Finally, the Company owns facilities having 876,000 square feet of
space formerly used in its operations but now leased to other parties or held
for sale.
8
ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings or investigations pending or threatened
to which the Company or any of its operating companies is a party or of which
any of their property is the subject.
Notwithstanding the foregoing, the text under the caption "Other Matters"
included in page 25 of the 1995 Annual Report is incorporated herein by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY.
The following are the Executive Officers of VF Corporation as of March 1, 1996.
The term of office of each of the officers continues to the next annual meeting
of the Board of Directors to be held April 16, 1996. There is no family
relationship among any of the VF Corporation officers.
Period Served
Name Position Age In Such Office(s)
- ---- -------- --- -----------------
Lawrence R. Pugh Chairman of the Board 63 May 1983 to date
Director February 1980 to date
Mackey J. McDonald President 49 October 1993 to date
Chief Executive Officer January 1996 to date
Director October 1993 to date
Candace S. Cummings Vice President - General 48 January 1995 to date
Counsel
Louis J. Fecile Vice President - Employee 56 December 1995 to date
Benefits
Gerard G. Johnson Vice President - Finance and 55 December 1988 to date
Chief Financial Officer
Daniel G. MacFarlan Chairman - Decorated Knitwear 45 February 1995 to date
and Playwear Coalitions
Vice President April 1995 to date
Frank C. Pickard III Vice President - Treasurer 51 April 1994 to date
John P. Schamberger Chairman - Jeanswear Coalition 47 February 1995 to date
Vice President April 1995 to date
Robert K. Shearer Vice President - Controller 44 April 1994 to date
9
Lori M. Tarnoski Vice President 56 May 1979 to date
Secretary May 1974 to date
Mr. Pugh joined the Company as President in 1980. In 1982, he was elected
Chief Executive Officer, which position he held until December 1995, and in
1983 was elected Chairman of the Board. In October 1990, he was also elected
President of the Company, serving in that position until October 1993.
Additional information is included in page 2 of the Company's definitive proxy
statement dated March 15, 1996 for the Annual Meeting of Shareholders to be
held on April 16, 1996 ("1996 Proxy Statement").
Mr. McDonald joined the Company's Lee division in 1983 serving in various
management positions until his election as President of the Company's former
Troutman division in 1984. He was named Executive Vice President of the
Wrangler division in 1986 and President of Wrangler in 1988. He was named
Group Vice President of the Company in February 1991, President of the Company
in October 1993 and Chief Executive Officer in January 1996. Additional
information is included in page 2 of the 1996 Proxy Statement.
Mrs. Cummings joined the Company as Vice President - General Counsel in January
1995. For the prior five years, she had been a senior business partner at the
international law firm of Dechert Price & Rhoads where she had spent her entire
professional career.
Mr. Fecile joined the Company in 1980 and was elected Assistant Treasurer in
1982, Assistant Vice President - Employee Benefits in 1987 and Vice President
- - Employee Benefits in December 1995.
Mr. Johnson joined the Company in 1988 as Vice President - Finance and Chief
Financial Officer.
Mr. MacFarlan joined the Company's Jantzen division in 1978 and served in
various capacities, including Vice President - Womens Casualwear from September
1990 to May 1992 and Senior Vice President - Sales and Womens Casualwear to
July 1993. He served as President of the Company's VF Factory Outlet division
from October 1993 to February 1995. Since November 1994, he has served as
President of the Company's Nutmeg division. He was elected as the Company's
Chairman - Decorated Knitwear and Playwear Coalitions in February 1995 and Vice
President in April 1995.
Mr. Pickard joined the Company in 1976 and was elected Assistant Controller in
1982, Assistant Treasurer in 1985, Treasurer in 1987 and Vice President -
Treasurer in April 1994.
Mr. Schamberger joined the Company's Wrangler division in 1972 and held various
positions including Vice President - New Brands from 1987 to his election as
Vice President - Consumer Marketing in March 1991 and President in May 1992.
He was elected as the Company's Chairman - Jeanswear Coalition in February 1995
and Vice President in April 1995.
Mr. Shearer joined the Company in 1986 as Assistant Controller and was elected
Controller in 1989 and Vice President - Controller in April 1994.
Mrs. Tarnoski joined the Company in 1961. She was elected Assistant Secretary
in 1973, Secretary in 1974 and Vice President in 1979.
10
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Information concerning the market and price history of the Company's Common
Stock, plus dividend information, as reported under the caption "Quarterly
Results of Operations" on page 19 and under the captions "Investor Information
- - Common Stock, Shareholders of Record, Dividend Policy, Dividend Reinvestment
Plan, Dividend Direct Deposit and Quarterly Common Stock Price Information" on
page 36 of the 1995 Annual Report, is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the Company for each of its last five fiscal years
under the caption "Financial Summary" on pages 32 and 33 of the 1995 Annual
Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
A discussion of the Company's financial condition and results of operations is
incorporated herein by reference to pages 21, 23 and 25 of the 1995 Annual
Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company and specific supplementary financial
information are incorporated herein by reference to pages 20, 22, 24 and 26
through 31 of the 1995 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Information under the caption "Change in Accountants" on pages 20 and 21 of the
1996 Proxy Statement is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
Information under the caption "Election of Directors" on pages 2 through 5 of
the 1996 Proxy Statement is incorporated herein by reference. See Item 4A with
regard to Executive Officers.
Information under the caption "Compliance with Section 16(a) of the Securities
Exchange Act" on page 21 of the 1996 Proxy Statement is incorporated herein by
reference.
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ITEM 11. EXECUTIVE COMPENSATION.
Information on pages 10 through 16 of the 1996 Proxy Statement with regard to
this item is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information under the caption "Certain Beneficial Owners" on page 18 and
"Common Stock Ownership of Management" on page 19 of the 1996 Proxy Statement
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information under the caption "Election of Directors" with respect to Messrs.
Sharp and Hurst on page 13 of the 1996 Proxy Statement is incorporated herein
by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial statements - Included on pages 20, 22, 24 and
26 through 31 of the 1995 Annual Report (Exhibit 13) and incorporated
by reference in Item 8:
Consolidated statements of income - - Fiscal years ended December 30,
1995, December 31, 1994 and January 1, 1994
Consolidated balance sheets - - December 30, 1995 and December 31, 1994
Consolidated statements of cash flows - - Fiscal years ended December
30, 1995, December 31, 1994 and January 1, 1994
Consolidated statements of common shareholders' equity - - Fiscal
years ended December 30, 1995, December 31, 1994 and January 1, 1994
Notes to consolidated financial statements
Report of independent accountants
12
2. Financial statement schedules - The following
consolidated financial statement schedule is included herein:
Schedule II - - Valuation and qualifying accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable and
therefore have been omitted.
3. Exhibits
Number Description
- ------ -----------
3 Articles of incorporation and bylaws:
(A) Articles of Incorporation, as amended and restated as of
April 18, 1986 and as presently in effect (Incorporated
by reference to Exhibit 3(A) to Form 10-K for the fiscal
year ended January 4, 1992)
(B) Statement Affecting Class or Series of Shares
(Incorporated by reference to Exhibit 3(B) to Form 10-K
for the fiscal year ended January 2, 1993)
(C) Statement with Respect to Shares of Series B ESOP
Convertible Preferred Stock (Incorporated by reference to
Exhibit 4.2 to Form 8-K dated January 22, 1990)
(D) Bylaws, as amended through January 1, 1996 and as
presently in effect
4 Instruments defining the rights of security holders, including
indentures:
(A) A specimen of the Company's Common Stock certificate
(Incorporated by reference to Exhibit 4(A) to Form 10-K for the
fiscal year ended January 2, 1993)
(B) A specimen of the Company's Series B ESOP Convertible
Preferred Stock certificate (Incorporated by reference to
Exhibit 4(B) to Form 10-K for the fiscal year ended
December 29, 1990)
(C) Indenture between the Company and Morgan Guaranty Trust
Company of New York, dated January 1, 1987 (Incorporated
by reference to Exhibit 4.1 to Form S-3 Registration No.
33-10939)
(D) First Supplemental Indenture between the Company, Morgan
Guaranty Trust Company of New York and United States
Trust Company of New York, dated September 1, 1989
(Incorporated by reference to Exhibit 4.3 to Form S-3
Registration No. 33-30889)
(E) Rights Agreement, dated January 13, 1988, between the
Company and Morgan Shareholder Services Trust Company
(Incorporated by reference to Exhibit 4(E) to Form 10-K
for the fiscal year ended January 2, 1993)
13
(F) Amendment No. 1 to Rights Agreement, dated April 17,
1990, between the Company and First Chicago Trust Company
of New York (Incorporated by reference to Exhibit 4 to
Form 10-Q for the fiscal quarter ended June 30, 1990)
(G) Amendment No. 2 to Rights Agreement, dated December 4,
1990, between the Company and First Chicago Trust Company
of New York (Incorporated by reference to Exhibit 3 to
Form 8-K dated December 4, 1990)
(H) Second Supplemental Indenture between the Company and United
States Trust Company of New York as Trustee (Incorporated
by reference to Exhibit 4.1 to Form 8-K, dated April 6, 1994)
10 Material contracts:
(A) 1982 Stock Option Plan (Incorporated by reference to
Exhibit 4.1.1 of Post-Effective Amendment No. 1 to Form
S-8/S-3, Registration No. 33-26566)
(B) 1991 Stock Option Plan (Incorporated by reference to
Exhibit A of the Company's 1992 Proxy Statement dated
March 18, 1992)
(C) Annual Discretionary Management Incentive Compensation
Program (Incorporated by reference to Exhibit 10(C) to
Form 10-K for the fiscal year ended January 4, 1992)
(D) Deferred Compensation Plan (Incorporated by reference to
Exhibit 10(B) to Form 10-K for the fiscal year ended
December 29, 1990)
(E) Executive Deferred Savings Plan (Incorporated by
reference to Exhibit 10(E) to Form 10-K for the fiscal
year ended January 4, 1992)
(F) Amended and Restated Supplemental Executive Retirement
Plan, dated May 16, 1989 (Incorporated by reference to
Exhibit 10(F) to Form 10-K for the fiscal year ended
December 31, 1994)
(G) First Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for L. R. Pugh (Incorporated by reference to Exhibit
10(G) to Form 10-K for the fiscal year ended December 31,
1994)
(H) Second Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Mid-Career Senior Management (Incorporated by
reference to Exhibit 10(H) to Form 10-K for the fiscal
year ended December 31, 1994)
(I) Third Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Senior Management (Incorporated by reference to
Exhibit 10(I) to Form 10-K for the fiscal year ended
December 31, 1994)
(J) Fourth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Deferred
Compensation Plan (Incorporated by reference to Exhibit
10(J) to Form 10-K for the fiscal year ended December 31,
1994)
14
(K) Fifth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan which funds certain benefits upon a Change in
Control (Incorporated by reference to Exhibit 10(K) to
Form 10-K for the fiscal year ended December 31, 1994)
(L) Seventh Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Executive Deferred
Savings Plan (Incorporated by reference to Exhibit 10(L)
to Form 10-K for the fiscal year ended December 31, 1994)
(M) Eighth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants whose Pension Plan Benefits are
limited by the Internal Revenue Code (Incorporated by
reference to Exhibit 10(M) to Form 10-K for the fiscal
year ended December 31, 1994)
(N) Form of Change in Control Agreement with senior
management of the Company (Incorporated by reference to
Exhibit 10(J) to Form 10-K for the fiscal year ended
December 29, 1990)
(O) Form of Change in Control Agreement with other management
of the Company (Incorporated by reference to Exhibit
10(K) to Form 10-K for the fiscal year ended December 29,
1990)
(P) Form of Change in Control Agreement with management of
subsidiaries of the Company (Incorporated by reference to
Exhibit 10(L) to Form 10-K for the fiscal year ended
December 29, 1990)
(Q) Revolving Credit Agreement, dated October 20, 1994
(Incorporated by reference to Exhibit 10(Q) to Form 10-K
for the fiscal year ended December 31, 1994)
(R) Executive Incentive Compensation Plan (Incorporated by
reference to Exhibit 10(R) to Form 10-K for the fiscal
year ended December 31, 1994)
(S) Restricted Stock Agreement (Incorporated by reference to
Exhibit 10(S) to Form 10-K for the fiscal year ended
December 31, 1994)
(T) Discretionary Supplemental Executive Bonus Plan (Incorporated
by reference to Exhibit 10(T) to Form 10-K for the fiscal
year ended December 31, 1994)
(U) 1995 Key Employee Restricted Stock Plan
11 Computation of earnings per common share
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of Coopers & Lybrand L.L.P.
23.2 Consents of Ernst & Young LLP
23.3 Report of Ernst & Young LLP
23.4 Report of Coopers & Lybrand L.L.P.
23.5 Report of Ernst & Young LLP
24 Power of attorney
27 Financial data schedule
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged
Savings Plan for Salaried Employees for the year
ended December 31, 1995
All other exhibits for which provision is made in the applicable regulations of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
15
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the last quarter of the fiscal
year ended December 30, 1995.
OTHER MATTERS
For purposes of complying with the amendments to the rules governing
Registration Statements on Form S-8 under the Securities Act of 1933, the
undersigned Company hereby undertakes as follows, which undertaking shall be
incorporated by reference into the Company's Registration Statements on Form
S-8 Nos. 33-26566 (filed January 12, 1989), 33-33621 (filed February 28, 1990)
and 33-41241 (filed June 24, 1991):
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
V.F. CORPORATION
By: /s/ Mackey J. McDonald
--------------------------
Mackey J. McDonald
President
(Chief Executive Officer)
By: /s/ Gerald G. Johnson
----------------------------
Gerard G. Johnson
Vice President - Finance
(Chief Financial Officer)
By: /s/ Robert K. Shearer
-----------------------------
Robert K. Shearer
Vice President - Controller
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:
Robert D. Buzzell* Director
Edward E. Crutchfield* Director
Ursula F. Fairbairn* Director
Barbara S. Feigin* Director
Roger S. Hillas* Director
Leon C. Holt, Jr.* Director
Robert J. Hurst* Director
Robert F. Longbine* Director March 25, 1996
Mackey J. McDonald* Director
William E. Pike* Director
Lawrence R. Pugh* Director
M. Rust Sharp* Director
L. Dudley Walker* Director
*By: /s/ L. M. Tarnoski March 25, 1996
--------------------------------
L. M. Tarnoski, Attorney-in-Fact
17
VF CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- -----------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------------------------------------
ADDITIONS
--------------------------------
(1) (2)
Balance at Charged to Charged to Deductions Balance at
Beginning Costs and Other Accounts Describe End of
Description of Period Expenses Describe Period
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Fiscal year ended December 30, 1995:
Allowance for doubtful accounts $32,794 $14,967 $13,140 (A) $34,621
========= ========= ========= =========
Valuation allowance for deferred
income tax assets $10,866 $12,518 $1,230 (B) $22,154
========= ========= ========= =========
Fiscal year ended December 31, 1994:
Allowance for doubtful accounts $28,808 $11,274 $7,288 (A) $32,794
========= ========= ========= =========
Valuation allowance for deferred
income tax assets $6,733 $4,203 $70 (B) $10,866
========= ========= ========= =========
Fiscal year ended January 1, 1994:
Allowance for doubtful accounts $30,275 $9,146 $10,613 (A) $28,808
========= ========= ========= =========
Valuation allowance for deferred
income tax assets $6,733 (C) $6,733
========= =========
(A) Deductions include accounts written off, net of recoveries, and in 1994
net of additions of $2.4 million from the acquisition of subsidiaries.
(B) Deduction relates to circumstances where it is more likely than not that
deferred tax assets will be realized.
(C) Adoption of FASB Statement No. 109, "Accounting for Income Taxes."
VF BUSINESS GROUPS/1995 HIGHLIGHTS
Jeanswear
PRODUCT PORTFOLIO: Jeans, casual pants, knit and woven shirts.
HIGHLIGHTS: 1995 sales up 5%. VF owns 3 of the top 4 jeans brands in the U.S.,
with a total unit market share of approximately 30%. Wrangler and Riders
brands continue to expand with national discounters. Lee commences aggressive
marketing campaign to drive share gains. Girbaud positioned as focused, niche
brand in premium jeans category. Lee, Wrangler and Maverick brands exhibiting
healthy growth internationally, driven by authentic American heritage.
STRATEGY: Global brand leadership.
Intimate Apparel
PRODUCT PORTFOLIO: Bras, panties, daywear, shapewear, robes and sleepwear.
HIGHLIGHTS: Sales flat in 1995. Vanity Fair brand continues as a market leader
in department stores with its broad array of products. Excellent performance
by Vassarette in discount channel. Accelerating move to offshore production to
improve competitive position. European brands maintaining strong market
positions and benefiting from consolidation and reorganization.
STRATEGY: Global brand leadership.
Decorated Knitwear
PRODUCT PORTFOLIO: Basic fleece and T-shirts used in private label and screen
print programs, and products decorated with names and logos of sports and
college teams.
HIGHLIGHTS: Sales flat in 1995. Bassett-Walker exhibits modest growth despite
volatile pricing environment and high raw material costs. Licensed sports
apparel market remains difficult, affecting Nutmeg's and Cutler's sales, but
focus on service and cost control starting to pay off.
STRATEGY: Focus on value-added, decorated products.
Playwear
PRODUCT PORTFOLIO: Branded and licensed character playwear and sleepwear, denim
and related youthwear.
HIGHLIGHTS: 1995 sales flat with 1994 levels. Childrenswear category at retail
generally weak, but Healthtex brand gaining market share. Good demand for
Cutler's licensed playwear featuring characters from Disney's Pocahontas, and
for new Nike licensed brand youthwear. Continued growth in Lee and Wrangler
youthwear businesses.
STRATEGY: Expand market share and distribution in fragmented market.
Specialty Apparel
PRODUCT PORTFOLIO: Red Kap occupational apparel, JanSport daypacks and
equipment, Jantzen swimwear and sportswear.
HIGHLIGHTS: Sales down 5%. Jantzen, leader in swimwear, expanding reach with
Nike licensed and Bolero brands. JanSport remains dominant force in daypacks,
while Red Kap leads with exceptional service capability.
STRATEGY: Focus on product line extensions and highest margin opportunities.
MULTIPLE BRANDS/MULTIPLE DISTRIBUTION
- -----------------------------------------------------------------------------------------------
Channel of Intimate Decorated Specialty
Distribution Jeanswear Apparel Knitwear Playwear Apparel
- -----------------------------------------------------------------------------------------------
Department Lee Vanity Fair Lee Sport Healthtex JanSport
Marithe & Nutmeg Lee Jantzen
Francois Nike* Bolero
Girbaud*
- -----------------------------------------------------------------------------------------------
Discount Wrangler Vassarette Cutler Sports Cutler Wolf Creek
Riders Wrangler Big Ben
Rustler
Timber Creek
- -----------------------------------------------------------------------------------------------
Specialty Wrangler Nutmeg JanSport
Western JanSport Nike*
Rugged Wear Red Kap
- -----------------------------------------------------------------------------------------------
International Lee Lou Nutmeg
Wrangler Bolero
Maverick Carina
Variance
Siltex
Belcor
Intima Cherry
Gemma
Vanity Fair
- -----------------------------------------------------------------------------------------------
* licensed
VF Corporation
Index to Exhibits
Number Description
- ------ -----------
3 Articles of incorporation and bylaws:
(A) Articles of Incorporation, as amended and restated as of
April 18, 1986 and as presently in effect (Incorporated
by reference to Exhibit 3(A) to Form 10-K for the fiscal
year ended January 4, 1992)
(B) Statement Affecting Class or Series of Shares
(Incorporated by reference to Exhibit 3(B) to Form 10-K
for the fiscal year ended January 2, 1993)
(C) Statement with Respect to Shares of Series B ESOP
Convertible Preferred Stock (Incorporated by reference to
Exhibit 4.2 to Form 8-K dated January 22, 1990)
(D) Bylaws, as amended through January 1, 1996 and as
presently in effect
4 Instruments defining the rights of security holders, including
indentures:
(A) A specimen of the Company's Common Stock certificate
(Incorporated by reference to Exhibit 4(A) to Form 10-K for the
fiscal year ended January 2, 1993)
(B) A specimen of the Company's Series B ESOP Convertible
Preferred Stock certificate (Incorporated by reference to
Exhibit 4(B) to Form 10-K for the fiscal year ended
December 29, 1990)
(C) Indenture between the Company and Morgan Guaranty Trust
Company of New York, dated January 1, 1987 (Incorporated
by reference to Exhibit 4.1 to Form S-3 Registration No.
33-10939)
(D) First Supplemental Indenture between the Company, Morgan
Guaranty Trust Company of New York and United States
Trust Company of New York, dated September 1, 1989
(Incorporated by reference to Exhibit 4.3 to Form S-3
Registration No. 33-30889)
(E) Rights Agreement, dated January 13, 1988, between the
Company and Morgan Shareholder Services Trust Company
(Incorporated by reference to Exhibit 4(E) to Form 10-K
for the fiscal year ended January 2, 1993)
(F) Amendment No. 1 to Rights Agreement, dated April 17,
1990, between the Company and First Chicago Trust Company
of New York (Incorporated by reference to Exhibit 4 to
Form 10-Q for the fiscal quarter ended June 30, 1990)
(G) Amendment No. 2 to Rights Agreement, dated December 4,
1990, between the Company and First Chicago Trust Company
of New York (Incorporated by reference to Exhibit 3 to
Form 8-K dated December 4, 1990)
(H) Second Supplemental Indenture between the Company and United
States Trust Company of New York as Trustee (Incorporated
by reference to Exhibit 4.1 to Form 8-K, dated April 6, 1994)
10 Material contracts:
(A) 1982 Stock Option Plan (Incorporated by reference to
Exhibit 4.1.1 of Post-Effective Amendment No. 1 to Form
S-8/S-3, Registration No. 33-26566)
(B) 1991 Stock Option Plan (Incorporated by reference to
Exhibit A of the Company's 1992 Proxy Statement dated
March 18, 1992)
(C) Annual Discretionary Management Incentive Compensation
Program (Incorporated by reference to Exhibit 10(C) to
Form 10-K for the fiscal year ended January 4, 1992)
(D) Deferred Compensation Plan (Incorporated by reference to
Exhibit 10(B) to Form 10-K for the fiscal year ended
December 29, 1990)
(E) Executive Deferred Savings Plan (Incorporated by
reference to Exhibit 10(E) to Form 10-K for the fiscal
year ended January 4, 1992)
(F) Amended and Restated Supplemental Executive Retirement
Plan, dated May 16, 1989 (Incorporated by reference to
Exhibit 10(F) to Form 10-K for the fiscal year ended
December 31, 1994)
(G) First Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for L. R. Pugh (Incorporated by reference to Exhibit
10(G) to Form 10-K for the fiscal year ended December 31,
1994)
(H) Second Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Mid-Career Senior Management (Incorporated by
reference to Exhibit 10(H) to Form 10-K for the fiscal
year ended December 31, 1994)
(I) Third Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Senior Management (Incorporated by reference to
Exhibit 10(I) to Form 10-K for the fiscal year ended
December 31, 1994)
(J) Fourth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Deferred
Compensation Plan (Incorporated by reference to Exhibit
10(J) to Form 10-K for the fiscal year ended December 31,
1994)
(K) Fifth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan which funds certain benefits upon a Change in
Control (Incorporated by reference to Exhibit 10(K) to
Form 10-K for the fiscal year ended December 31, 1994)
(L) Seventh Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants in the Company's Executive Deferred
Savings Plan (Incorporated by reference to Exhibit 10(L)
to Form 10-K for the fiscal year ended December 31, 1994)
(M) Eighth Amended Annual Benefit Determination under the
Amended and Restated Supplemental Executive Retirement
Plan for Participants whose Pension Plan Benefits are
limited by the Internal Revenue Code (Incorporated by
reference to Exhibit 10(M) to Form 10-K for the fiscal
year ended December 31, 1994)
(N) Form of Change in Control Agreement with senior
management of the Company (Incorporated by reference to
Exhibit 10(J) to Form 10-K for the fiscal year ended
December 29, 1990)
(O) Form of Change in Control Agreement with other management
of the Company (Incorporated by reference to Exhibit
10(K) to Form 10-K for the fiscal year ended December 29,
1990)
(P) Form of Change in Control Agreement with management of
subsidiaries of the Company (Incorporated by reference to
Exhibit 10(L) to Form 10-K for the fiscal year ended
December 29, 1990)
(Q) Revolving Credit Agreement, dated October 20, 1994
(Incorporated by reference to Exhibit 10(Q) to Form 10-K
for the fiscal year ended December 31, 1994)
(R) Executive Incentive Compensation Plan (Incorporated by
reference to Exhibit 10(R) to Form 10-K for the fiscal
year ended December 31, 1994)
(S) Restricted Stock Agreement (Incorporated by reference to
Exhibit 10(S) to Form 10-K for the fiscal year ended
December 31, 1994)
(T) Discretionary Supplemental Executive Bonus Plan (Incorporated
by reference to Exhibit 10(T) to Form 10-K for the fiscal
year ended December 31, 1994)
(U) 1995 Key Employee Restricted Stock Plan
11 Computation of earnings per common share
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of Coopers & Lybrand L.L.P.
23.2 Consents of Ernst & Young LLP
23.3 Report of Ernst & Young LLP
23.4 Report of Coopers & Lybrand L.L.P.
23.5 Report of Ernst & Young LLP
24 Power of attorney
27 Financial data schedule
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged
Savings Plan for Salaried Employees for the year
ended December 31, 1995
All other exhibits for which provision is made in the applicable regulations of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.