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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended JANUARY 4, 1997
Commission file number: 1-5256
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V. F. CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1047 NORTH PARK ROAD
WYOMISSING, PENNSYLVANIA 19610
(Address of principal executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, without par value, New York Stock Exchange
stated capital $1 per share and
Preferred Stock Purchase Rights Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
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As of March 1, 1997, 64,009,069 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 $3.6 billion. In addition, 1,881,515
shares of Series B ESOP Convertible Preferred Stock of the registrant were
outstanding and convertible into 1,505,212 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 January 4, 1997 (Items
1 and 3 in Part I and Items 5, 6, 7 and 8 in Part II).
Portions of the Proxy Statement dated March 10, 1997 for the Annual Meeting of
Shareholders to be held on April 15, 1997 (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 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.
BUSINESS GROUPS
The Company is organized in five business groups - - Jeanswear, Decorated
Knitwear, Intimate Apparel, Playwear and Specialty Apparel. (See "Recent
Events.") Information regarding the operations, sales and profitability of
these business groups is included on pages 3, 22, 23 and 25 of the Company's
Annual Report to Shareholders for the fiscal year ended January 4, 1997 ("1996
Annual Report"), which information is incorporated herein by reference.
JEANSWEAR
The Jeanswear business group includes jeanswear and other casual apparel
marketed under the LEE(R), WRANGLER(R), RUSTLER(R) and RIDERS(R) brands in the
United States. The Company also offers cotton casual pants and shirts under
the LEE CASUALS(R) and TIMBER CREEK BY WRANGLER(R) brands and licenses the
MARITHE & FRANCOIS GIRBAUD(R) label for branded fashion jeans and casual
apparel in the United States.
According to industry data, approximately 565 million pairs of jeans made of
denim, twill, corduroy and other fabrics were sold in the United States in
1996, representing an increase of 5.5% over 1995. This same data indicates
that the Company currently has the largest combined unit market share at
approximately 27%, with WRANGLER, LEE and RUSTLER having the second, third and
fourth largest unit shares of the jeans market in the United States,
respectively.
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 brands
marketed to national discount chains. MARITHE & FRANCOIS GIRBAUD products are
sold to upscale department and specialty stores. Sales for all brands are
generally made directly to retailers through full-time salespersons.
During 1996, 70% of domestic jeanswear sales were derived from garments
produced in Company-owned and operated cutting, sewing and laundry facilities
in the United States. Eighteen percent of domestic jeanswear sales were
produced in owned facilities in Mexico and other Caribbean countries, with the
balance manufactured by various independent domestic and international
contractors.
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The Company also manufactures and markets LEE, WRANGLER and MAVERICK(R)
jeanswear and related products in international markets, where jeanswear is
more of a fashion product and has a higher relative price than similar products
in the United States. International sales are primarily in Western Europe, but
with increasing sales in Eastern Europe. LEE and WRANGLER are sold through
department stores and specialty shops, while MAVERICK branded jeanswear is sold
in the discount channel of distribution. Internationally, jeanswear products
are sold through the Company's sales forces and independent sales agents. The
Company has distributors, agents or licensees for LEE and WRANGLER jeanswear
and related products in foreign markets where the Company does not have owned
operations.
In European markets, 67% of the Company's jeanswear products in 1996 were
produced in owned plants in the United Kingdom, Ireland, Malta and Poland, with
the balance (mostly tops) sourced from independent contractors. The Company
also manufactures and markets LEE products in Mexico and China and participates
in a joint venture in Spain and Portugal. In addition, LEE and WRANGLER are
marketed in Canada.
DECORATED KNITWEAR
The Decorated Knitwear business group includes the manufacturing and marketing
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 throughout the United States to
national chain and department stores, discount stores, wholesalers and garment
screen printing operators by an in-house staff of salespersons. In 1996,
approximately one-third of the knitted fleecewear and T-shirts were marketed
under the LEE label. The remainder was manufactured for private label
customers and for the fleece and T-shirt needs of the Company's imprinted
apparel operations.
The Company designs, manufactures and markets imprinted sports apparel under
licenses granted by the four major American professional sports leagues, NASCAR
and other parties. LEE SPORT(R) and NUTMEG(R) branded adult licensed apparel is
distributed through department, sporting goods and athletic specialty stores.
CSA(R) branded products, primarily in children's sizes, are distributed through
mass merchandisers and discount stores. Nutmeg apparel imprinted with
professional soccer and other sports logos is manufactured and marketed in
Europe. In addition, this business group includes JANSPORT(R) branded fleeced
casualwear and T-shirts imprinted with college logos for distribution through
college bookstores.
INTIMATE APPAREL
The Intimate Apparel business group includes the VANITY FAIR(R) and
VASSARETTE(R) brands and a significant private label business in the United
States. The Company manufactures and markets bras, panties, daywear,
shapewear, robes and sleepwear products using the VANITY FAIR label for sales
to domestic department and specialty stores and the VASSARETTE brand for the
discount channel. Most products are sold through the Company's sales force.
During 1996, approximately 40% of domestic intimate apparel sales were derived
from garments sewn in owned domestic plants, 45% from Company-owned facilities
in Mexico and the remainder from independent contractors.
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In international markets, intimate apparel is marketed in 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) brand names in Spain.
Intimate apparel is marketed in discount stores in France under the VARIANCE(R),
CARINA and SILTEX brand names. Approximately 80% of the apparel is manufactured
from purchased fabric in the Company's facilities in France, Spain, Tunisia and
Madagascar, with the remainder manufactured by independent contractors.
PLAYWEAR
The Playwear business group consists of HEALTHTEX(R) branded products,
preschool sizes of LEE and WRANGLER, and playwear and sleepwear products
imprinted with licensed brands. Products marketed under the HEALTHTEX label
are sold primarily to department and specialty stores. LEE and WRANGLER
children's sizes are marketed in distribution channels consistent with their
respective adult sizes. Playwear products imprinted with characters licensed
from The Walt Disney Company and others are marketed primarily to mass
merchandise and discount stores. Licensed NIKE(R) brand childrenswear is
marketed to department and sports specialty stores.
SPECIALTY APPAREL
The Company is a leading producer of occupational and career apparel sold under
the RED KAP(R) label. Approximately three-fourths 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. The Company expanded its presence in safety apparel in the United
States and Canada by acquiring Bulwark Protective Apparel Inc. in 1996.
Because 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 ten 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.
In addition, the Company markets a line of work clothes nationally to retail
stores under the BIG BEN(R) brand.
The Company designs, manufactures and markets an extensive line of women's
swimwear and sportswear, including coordinated tops and bottoms, under the
JANTZEN(R) trademark and, beginning in 1995, under the licensed NIKE label. A
significant portion of the products are manufactured by independent
contractors. Products are sold primarily to department and specialty stores in
the United States and Canada through the Company's sales force. The JANTZEN
trademark is licensed to other companies in several foreign countries.
The Company also manufactures and markets JANSPORT brand daypacks, sold through
college bookstores and department and sports specialty stores, and JANSPORT
backpacking and mountaineering gear, sold through outdoor and sporting goods
stores. JANSPORT daypacks and bookbags have the leading brand share in the
United States.
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RAW MATERIALS
Raw materials include fabrics made from cotton, synthetics and blends of cotton
and synthetic yarn. For most domestic operations, the Company purchases fabric
from several domestic suppliers against scheduled production. The fabric is
cut and sewn into finished garments in the Company's manufacturing facilities
or, in certain instances, at independent contractors. An increasing percentage
of fabric cut in the Company's domestic facilities is sewn into finished
products in Company-owned plants in Mexico or the Caribbean. Fabric for
international operations is purchased from several international suppliers.
The Company also purchases thread and trim (buttons, zippers, snaps and lace)
from numerous suppliers.
In the domestic knitwear and intimate apparel operations, 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. Cotton yarn and cotton and synthetic blend yarn are purchased from a
major textile company under a long-term supply agreement for the knitwear
operations. Yarn is available from numerous other sources.
The Company has not experienced difficulty in obtaining fabric and other raw
materials to meet production needs during 1996 and does not anticipate
difficulties in 1997. 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 22% in the first quarter to a high of 27% 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.
Working capital requirements vary throughout the year. Working capital
increases during the first half of the year as inventory builds to support peak
shipping periods, and accordingly decreases during the second half. Cash
provided by operations is substantially higher in the second half of the year
due to higher net income and reduced working capital requirements during that
period.
ADVERTISING
The Company supports its brands through extensive advertising and promotional
programs and through sponsorship of special events. The Company advertises on
national and local radio and television and in consumer and trade publications.
It also participates in cooperative advertising on a shared cost basis with
major retailers in radio, television and various print media. In addition,
point-of-sale fixtures and signage are used to promote products at the retail
level. During 1996, the
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Company spent $271 million advertising and promoting its products, compared
with $231 million in 1995. A significant portion of the savings arising from
the 1995 cost reduction initiatives (see Note M to the consolidated financial
statements in the 1996 Annual Report) are being invested in increased
advertising and other actions to support and build the Company's brands. The
level of promotional spending is expected to increase in 1997.
RECENT EVENTS
Beginning in late 1996, the Company announced a series of organizational
changes that are being implemented during 1997. The Company's principal
operating divisions will be consolidated into five consumer-focused marketing
coalitions -- Jeanswear, Intimate Apparel, Knitwear, Playwear and
International. The marketing functions will remain separate, allowing
marketing specialists to build and develop their brands. However, many of the
Company's sourcing, manufacturing and administrative functions, previously
performed in separate operating divisions, will be carried out on either a
coalition or a Company-wide basis. These consolidations, plus related new
business systems and processes, are expected to cost $150 million over the next
few years but, upon completion, are expected to result in cost savings of $150
million annually.
At the same time, the Company will make additional investments in consumer
research, product development, in-store marketing programs and advertising.
This incremental investment spending to support and build the Company's brands
is expected to total $250 million over the next four to five years.
OTHER MATTERS
COMPETITIVE FACTORS
The apparel industry is highly competitive and consists of a number of domestic
and foreign companies. Management believes that there are only two competitors
in the United States that have 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 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.
Apparel is manufactured and marketed under licenses granted by Major League
Baseball, the National Basketball 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
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specific renewal options. The MARITHE & FRANCOIS GIRBAUD label is under
license in the United States through 1997. 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, SPECIALTY AND DISCOUNT STORES
IN THE UNITED STATES AND IN INTERNATIONAL MARKETS, PRIMARILY IN EUROPE. SALES
TO WAL-MART STORES, INC. TOTALED 10.3% OF TOTAL SALES IN 1996 AND 10.5% IN
1995. SALES TO THE COMPANY'S TEN LARGEST CUSTOMERS AMOUNTED TO 37% OF TOTAL
SALES IN 1996 AND 35% IN 1995.
EMPLOYEES
The Company employs approximately 62,800 men and women. Approximately 5,700
employees are covered by various collective bargaining agreements. Employee
relations are considered to be good.
BACKLOG
The dollar amount of backlog of orders believed to be firm as of the end of the
Company's fiscal year and as of the end of the preceding fiscal year is not
material for an understanding of the business of the Company taken as a whole.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included in Item 1 - "Business," Item 3 - "Legal
Proceedings" 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; timely completion of the Company's cost
reduction initiatives; 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.
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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 1996 are summarized below for the Company's business
groups:
Square
Business Group Footage
-------------- -----------
Jeanswear 7,700,000
Decorated Knitwear 4,800,000
Intimate Apparel 2,600,000
Playwear 1,200,000
Specialty Apparel 2,300,000
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18,600,000
===========
In addition, the Company owns or leases various administrative and office
space. The Company also owns or leases facilities having 2,800,000 square feet
of space that is used for factory outlet operations. Approximately 78% 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 1,000,000 square feet of
space formerly used in its operations but now leased to other parties or held
for sale.
ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings or investigations pending or threatened
to which the Company is a party or of which any of its property is the subject.
Notwithstanding the foregoing, the text under the caption "Other Matters"
included on page 27 of the 1996 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, 1997.
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 15, 1997. There is
no family relationship among any of the VF Corporation executive officers.
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Period Served
Name Position Age In Such Office(s)
- ---- -------- --- -----------------
Mackey J. McDonald President 50 October 1993 to date
Chief Executive Officer January 1996 to date
Director October 1993 to date
Candace S. Cummings Vice President - Administration 49 March 1996 to date
& General Counsel
Gerard G. Johnson Vice President - Finance and 56 December 1988 to date
Chief Financial Officer
Timothy A. Lambeth Vice President 55 July 1996 to date
President - European & Asian August 1996 to date
Operations
Daniel G. MacFarlan Vice President 46 April 1995 to date
Chairman - Knitwear, Playwear July 1996 to date
& Intimate Apparel Coalitions
Frank C. Pickard III Vice President - Treasurer 52 April 1994 to date
John P. Schamberger Chairman - Jeanswear Coalition 48 February 1995 to date
Vice President April 1995 to date
Robert K. Shearer Vice President - Controller 45 April 1994 to date
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 1991, President of the Company in
October 1993 and Chief Executive Officer in January 1996. Additional
information is included on page 3 of the 1997 Proxy Statement.
Mrs. Cummings joined the Company as Vice President - General Counsel in January
1995 and became Vice President - Administration & General Counsel in March
1996. 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. Johnson joined the Company in 1988 as Vice President - Finance and Chief
Financial Officer.
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 April 1992 and president of Lee
Company from May 1992 to July 1996. He was elected a Vice President of the
Company in July 1996 and President - European & Asian Operations in August
1996.
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Mr. MacFarlan joined the Company's Jantzen division in 1978 and served in
various capacities, including Vice President - Womens Casualwear from 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 & 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 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 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.
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 33 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
the inside back cover of the 1996 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 34 and 35 of the 1996 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 23, 25 and 27 of the 1996 Annual
Report.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company and specific supplementary financial
information are incorporated herein by reference to pages 21, 22, 24, 26 and 28
through 33 of the 1996 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Information under the caption "Change in Accountants" on page 25 of the 1997
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 1997 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 25 of the 1997 Proxy Statement is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information on pages 10 through 15 of the 1997 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 17 and
"Common Stock Ownership of Management" on page 18 of the 1997 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 2 and with respect to Mr. Crutchfield on page 4 of
the 1997 Proxy Statement is incorporated herein by reference.
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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, 22, 24,
26 and 28 through 33 of the 1996 Annual Report (Exhibit 13) and
incorporated by reference in Item 8:
Consolidated statements of income - - Fiscal years ended January 4,
1997, December 30, 1995 and December 31, 1994
Consolidated balance sheets - - January 4, 1997 and December 30, 1995
Consolidated statements of cash flows - - Fiscal years ended January
4, 1997, December 30, 1995 and December 31, 1994
Consolidated statements of common shareholders' equity - - Fiscal
years ended January 4, 1997, December 30, 1995 and December 31, 1994
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
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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)
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(D) Bylaws, as amended through January 1, 1996 and as presently in effect (Incorporated by reference to
Exhibit 3(D) to Form 10-K for the fiscal year ended December 30, 1995)
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)
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(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) Resolution of the Board of Directors dated December 3, 1996 relating to lump sum payments under the
Company's Supplemental Executive Retirement Plan
15
16
(O) 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)
(P) 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)
(Q) 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)
(R) 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)
(S) Executive Incentive Compensation Plan (Incorporated by reference to Exhibit 10(R) to Form 10-K for the
fiscal year ended December 31, 1994)
(T) Restricted Stock Agreement (Incorporated by reference to Exhibit 10(S) to Form 10-K for the fiscal year
ended December 31, 1994)
(U) Discretionary Supplemental Executive Bonus Plan (Incorporated by reference to Exhibit 10(T) to Form 10-K
for the fiscal year ended December 31, 1994)
(V) 1995 Key Employee Restricted Stock Plan (Incorporated by reference to Exhibit 10(U) to Form 10-K for the
fiscal year ended December 30, 1995)
(W) VF Corporation Deferred Savings Plan for Non-Employee Directors
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
16
17
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, 1996
All other exhibits for which provision is made in the applicable regulations of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the last quarter of the fiscal
year ended January 4, 1997.
17
18
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 March 24, 1997
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 24, 1997
------------------------------
L. M. Tarnoski, Attorney-in-Fact
18
19
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 January 4, 1997
Allowance for doubtful accounts $34,621 $18,490 $12,858 (A) $40,253
========== ========== ========== ==========
Valuation allowance for deferred
income tax assets $22,154 $9,874 $2,732 (B) $29,296
========== ========== ========== ==========
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
========== ========== ========== ==========
(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 realize
19
20
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 (Incorporated by reference to Exhibit 3(D)
to Form 10-K for the fiscal year ended December 30, 1995)
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)
21
(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)
22
(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) Resolution of the Board of Directors dated December 3, 1996 relating to lump sum payments under the Company's
Supplemental Executive Retirement Plan
(O) 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)
(P) 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)
(Q) 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)
(R) 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)
(S) Executive Incentive Compensation Plan (Incorporated by reference to Exhibit 10(R) to Form 10-K for the fiscal year
ended December 31, 1994)
(T) Restricted Stock Agreement (Incorporated by reference to Exhibit 10(S) to Form 10-K for the fiscal year ended
December 31, 1994)
(U) Discretionary Supplemental Executive Bonus Plan (Incorporated by reference to Exhibit 10(T) to Form 10-K for the
fiscal year ended December 31, 1994)
(V) 1995 Key Employee Restricted Stock Plan (Incorporated by reference to Exhibit 10(U) to Form 10-K for the fiscal
year ended December 30, 1995)
(W) VF Corporation Deferred Savings Plan for Non-Employee Directors
23
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, 1996