SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1999
Commission file number: 1-5256
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
(Full title of plan)
628 GREEN VALLEY ROAD, SUITE 500
GREENSBORO, NC 27408
(Address of principal executive offices)
(336) 547-6000
(Registrant's telephone number, including area code)
1
Item 1. Changes in the Plan
Effective September 1, 1999: Participants may contribute from 2% to 15% of their
compensation to the Plan; and Participants will provide investment direction by
telephone by using the voice response system or a Participant Services
Representative or by the internet.
Item 2. Changes in Investment Policy
Effective September 1, 1999, VF Corporation (the Corporation) appointed Fidelity
Institutional Retirement Services Company as Plan Recordkeeper. The Plan offers
10 core investment options and a Mutual Fund Window administered by Fidelity.
Item 3. Contributions Under the Plan
N/A
Item 4. Participating Employees
There were approximately 7,187 enrolled participants in the Plan as of December
31, 1999, out of approximately 27,132 eligible employees.
Item 5. Administration of the Plan
(a) The Plan provides that a Committee of three persons be appointed to
administer the Plan. The Committee, the VF Corporation Pension Plan
Committee, is comprised of the following officers of the Corporation:
Candace Cummings, Vice President - Administration, General Counsel &
Secretary; Frank C. Pickard III, Vice President - Treasurer; and Louis
J. Fecile, Vice President - Employee Benefits. All committee persons
are located at the Corporation's headquarters: 628 Green Valley Road,
Suite 500, Greensboro, NC 27408. Each of these individuals is an
employee of the Corporation. The Committee has the power to adopt rules
and regulations for carrying out and administering the Plan and has the
full authority and power to construe, interpret and administer the
Plan. Committee members receive no compensation from the Plan.
(b) All expenses of administration of the Plan, including Trustee fees, are
paid by the Corporation.
Item 6. Custodian of Investments
(a) The Corporation has entered into a Trust Agreement under which Fidelity
Management Trust Company, 300 Puritan Way, Marlboro, MA 01752, has been
appointed as Trustee under the Plan. Under the terms of the Trustee
Agreement, Fidelity Management Trust Company holds and invests all
assets of the Plan with the exception of the Fixed Income Fund trusteed
by UMB Bank n.a., subject to the direction of each of the participants
of the Plan regarding the investment fund or funds for existing account
balances and future contribution elections.
(b) The custodian's compensation is paid by the Corporation.
(c) No bond was furnished or is required to be furnished by the Trustee.
2
Item 7. Reports to Participating Employees
Each participant receives a quarterly statement showing the amounts contributed
by him/her to each of the funds during the calendar quarter and the market
values of investments as of the end of each quarter.
Item 8. Investment of Funds
Each participant by using the Fidelity Voice Response system or their internet
site may direct Fidelity to invest his/her own contributions in one or more of
the following funds:
- - Money Market Fund
- - Fixed Income Fund
- - Balanced Fund
- - Equity Growth & Income Fund
- - Index 500 Fund
- - Dividend Growth Fund
- - Small-Cap Value Fund
- - Small-Cap Growth Fund
- - Foreign Fund
- - VF Corporation Common Stock Fund (investing in common stock of the
Corporation)
- - Mutual Fund Window
Brokerage commissions of $1,043 and $3,214 for the years ended December 31, 1999
and 1998 were paid by the Trustee to acquire the Corporation's common stock for
the Plan.
3
Item 9. Financial Statements and Exhibits
(a) Financial Statements Page No.
--------
Report of Independent Accountants 6
Statements of Net Assets Available for Benefits,
December 31, 1999 and December 31, 1998 7
Statements of Changes in Net Assets Available for Benefits -
For the Years Ended December 31, 1999 and December 31, 1998 8
Notes to Financial Statements 9
Supplemental Schedules*:
Line 27a - Schedule of Assets Held for Investment
Purposes 16
Line 27d - Schedule of Reportable Transactions 17
* - Other schedules required by Section 2520.103-10 of the
Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because they are not
applicable.
(b) Exhibits
Exhibit 23.1 - Consent of Independent Accountants 18
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the VF
Corporation Pension Plan Committee has duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
VF Corporation Tax-Advantaged Savings Plan
for Hourly Employees
By: /s/ Louis J. Fecile
----------------------------------
Louis J. Fecile
Vice President - Employee Benefits
VF Corporation
Date: April 24,2000
5
Report of Independent Accountants
VF Corporation Pension Plan Committee
VF Corporation Tax-Advantaged Savings Plan for Hourly Employees
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the VF Corporation Tax-Advantaged Savings Plan for Hourly Employees (the
"Plan") at December 31, 1999 and December 31, 1998, and the changes in net
assets available for benefits for the year ended December 31, 1999 and for the
period April 1, 1998 (date of inception) to December 31, 1998 in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and of reportable transactions are presented for the
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopersLLP
Greensboro, North Carolina
March 28, 2000
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
ASSETS 1999 1998
- ------ ---- ----
Investments, at fair value
VF Corporation Common Stock -
40,904 shares in 1999 $ 1,227,120 $ 1,033,594
22,050 shares in 1998
United States government obligations 0 9,210,864
Other securities 22,277,733 11,109,445
------------ ------------
Total investments 23,504,853 21,353,903
Dividends and interest receivable 0 197,459
Loans receivable from participants 334,179 161,037
------------ ------------
Net assets available for benefits $23,839,032 $21,712,399
============ ============
See notes to financial statements.
7
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Period Ended December 31
1999 1998
---- ----
Investment income
Interest $ 452,991 $ 1,092,869
Income from VF Corporation Common Stock,
mutual funds and bank common trust funds 461,598 336,364
----------- -----------
914,589 1,429,233
Contributions
Interest on Loan Repayments 13,830 5,739
Transfer from Bassett-Walker Thrift Plan 0 22,087,806
Participants 4,634,992 4,066,432
----------- -----------
5,563,411 27,589,210
Withdrawals (3,705,369) (6,498,737)
Net realized and unrealized appreciation
in fair value of investments 268,591 621,926
----------- -----------
Net increase 2,126,633 21,712,399
Net assets available for benefits
Beginning of period 21,712,399 0
----------- -----------
End of period $23,839,032 $21,712,399
============ ===========
See notes to financial statements.
8
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF THE PLAN
Effective April 1, 1998, VF Corporation (the Corporation) adopted the VF
Corporation Tax-Advantaged Savings Plan for Hourly Employees (the Plan), which
is a cash or deferred plan under Section 401(k) of the Internal Revenue Code.
Under the Plan, certain hourly employees of specified subsidiaries, having at
least one year of credited service, may elect to contribute between 2% and 15%
of their compensation to the Plan. Employees remain fully vested in their
contributions to the Plan.
Employee contributions are invested at the direction of the employee in one or
more of the funds administered by the Plan's trustees. All Plan assets are
trusteed by Fidelity Management Trust Company with the exception of the Fixed
Income Fund which is trusteed by UMB Bank, n.a. The investment programs of the
Plan are as follows:
(a) Money Market Fund: Monies are invested in a money market fund.
(b) Fixed Income Fund: Monies are invested in investments that
provide a fixed rate of return.
(c) Balanced Fund: Monies are invested in investments to obtain as
much income as possible, consistent with the preservation and
conservation of capital.
(d) Equity Growth & Income Fund: Monies are invested in
investments that are currently paying dividends and/or offer
prospects for growth of capital and future income, with
emphasis on capital appreciation.
(e) Index 500 Fund: Monies are invested in the 500 stocks that
make up the S&P 500 Stock Price Index.
(f) Dividend Growth Fund: Monies are invested in stocks of
companies that have the potential to increase the amount of
their dividends or begin paying them if none are being paid
now.
(g) Small-Cap Value Fund: Monies are invested in U.S. common
stocks of small companies whose price is under valued.
(h) Small-Cap Growth Fund: Monies invested in small and medium
size companies with under valued assets or favorable growth
prospects.
(i) Foreign Fund: Monies are invested in stocks and debt
obligations of companies and governments outside the United
States.
(j) VF Corporation Common Stock Fund: Monies are invested in
Common Stock of the Corporation purchased at prevailing prices
on the New York Stock Exchange on the date of purchase.
Employees can direct no more than 50% of their contributions
to the VF Corporation Common Stock Fund.
(k) Mutual Fund Window: The option allows participants to select
from over 160 mutual funds offered through Fidelity
Investments Funds Net Program and additional Fidelity Fund
options.
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Individual accounts are maintained for each participant; each account includes
the individual's contributions and investment funds' earnings. Accounts become
payable upon retirement, disability, death or termination of employment.
Participants may also withdraw all or a portion of their accounts by filing a
written request that demonstrates financial hardship. Participants may elect to
receive distributions in a lump sum, or accounts may be rolled over into another
IRS-approved tax deferral vehicle.
The transfer of applicable participant balances from the Bassett-Walker Thrift
Plan, which was terminated effective April 1, 1998, has been disclosed
separately in the Statements for Changes in Net Assets Available for Benefits.
Participants may borrow from their individual account. Participants are charged
interest at the Morgan Guaranty "Published" prime rate at the time of the loan
and repay the principal within 60 months, or 120 months if the loan is for the
purchase of their primary residence. Participants may borrow up to 50% of the
participant's total vested account balance. Payment in full is required at
termination of employment. There were 195 loans outstanding at December 31,
1999.
Although it has no intent to do so, the Corporation may terminate the Plan in
whole or in part at any time.
The number of participants in each fund was as follows:
Year Ended December 31
1999 1998
---- ----
Money Market Fund 2,487 2,812
Fixed Income Fund 3,673 4,333
Balanced Fund 2,132 2,168
Equity Growth & Income Fund 3,453 3,482
Index 500 Fund 2,943 2,978
Dividend Growth Fund 13 0
Small-Cap Value Fund 1,478 1,541
Small-Cap Growth Fund 2,154 2,225
Foreign Fund 1,040 1,115
VF Corporation Common Stock Fund 3,394 3,584
The total number of participants in the Plan was less than the sum of
participants shown above because many were participating in more than one fund.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value. Securities traded on a national securities
exchange are valued at the last reported sales price on the last business day of
the plan year. For commercial notes and United States government obligations,
UMB Bank, n.a. has established a fair value based on yields currently available
on comparable instruments. The fair value of the participation units owned by
the Plan in mutual funds and bank common trust funds is based on quoted
redemption values on the last business day of the Plan year.
Fair Value for the guaranteed investment contract ("GIC") with a life insurance
company approximates contract value. Contract value represents contributions
made under the contract, plus interest at the contract rate, less administrative
expenses charged by the insurance company. Changes in contract value of GIC
deposits in the separate accounts of insurance companies have been included as
interest in the statement of changes in net assets available for benefits. The
crediting interest rate on the GIC as of December 31, 1998 and the average yield
for the year then ended is consistent with the stated rate of contract detailed
in Note D. These rates are expected to remain constant to maturity. There were
no valuation reserves against the GIC at December 31, 1998.
Purchases and sales of securities, including gains and losses thereon, are
recorded as of the trade date. Dividends are recorded on the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or losses and unrealized
appreciation or depreciation on those investments. Realized gains or losses are
calculated on an average cost basis.
Administrative expenses consisting primarily of fees for legal, accounting and
other services are paid by the Corporation in accordance with the Plan Agreement
and are based on customary and reasonable rates for such services.
Payment of Benefits: Benefits are recorded when paid. Approximately $1.3 million
in Bassett-Walker Thrift Plan withdrawals are included in withdrawals for the
Fixed Income Fund in 1998.
Use of Estimates: In preparing financial statements in accordance with generally
accepted accounting principles, management makes estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates.
New Accounting Pronouncements: The Company has adopted the provision of SOP
99-3, "Accounting for a Reporting of Certain Employee Benefit Plan Investments
and Other Disclosure Matters." The statement states that a defined contribution
pension plan that provides participant-directed investment programs is no longer
required to disclose amounts relating to those individual programs as a separate
fund in the financial statements in columnar form, or in the related
disclosures, or by separate financial statements for each program as required by
Practice Bulletin 12, "Reporting Separate Investment Fund Option Information of
Defined Contribution Pension Plans." Additionally, defined contribution pension
11
plans are no longer required to present participant-directed plan investments in
the statement of net assets available for benefits by general type.
Reclassifications: Certain amounts included in the prior year financial
statements have been reclassified to conform to current year presentation.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has issued a Favorable Determination Letter dated
September 27, 1998 stating that the Plan qualifies under the appropriate
sections of the Internal Revenue Code (IRC) and is, therefore, not subject to
tax under present income tax law. Once qualified, the Plan is required to
operate in conformity with the IRC to maintain its qualification. The Pension
Plan Committee is not aware of any action or series of events that have occurred
that might adversely affect the Plan's qualified status. The Plan has been
amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is currently
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
12
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS
Net realized and unrealized appreciation (depreciation) in fair value of
investments included in Plan equity includes the following:
Net Realized & Unrealized Net Realized & Unrealized
Appreciation in Fair Value Appreciation in Fair Value
for the Period Ended Fair Value at for the Period Ended Fair Value at
December 31, 1999 December 31, 1999 December 31, 1998 December 31, 1998
----------------- ----------------- ----------------- -----------------
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common Stock $(527,828) $ 1,227,120 $ 8,748 $ 1,033,594
Mutual funds and
bank common trust funds 566,661 9,708,549 564,650 5,608,653
--------- ----------- -------- -----------
38,833 10,935,669 573,398 6,642,247
--------- ----------- -------- -----------
Fair value as determined by
Plan trustee:
United States government
Obligations 0 0 0 9,210,864
Commercial notes & GICs 0 0 48,528 2,746,428
Mutual funds and
bank common trust funds 229,758 12,569,184 0 2,754,364
--------- ----------- -------- -----------
229,758 12,569,184 48,528 14,711,656
--------- ----------- -------- -----------
$ 268,591 $23,504,853 $621,926 $21,353,903
========= =========== ======== ===========
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
The fair value of individual investments that represent 5% or more of the Plan's
net assets at December 31, 1999 and 1998 are as follows:
1999 1998
---- ----
Fidelity Growth & Income Fund $2,515,293 $1,524,360
(53,335 and 33,254 shares)
Fidelity Puritan Fund 1,213,300 --
(63,757 and 37,670 shares)
Fidelity US Equity Index Pool 2,514,876 --
(59,792 shares)
VF Corporation Common Stock 1,259,048 --
(40,904 and 22,050 shares)
Vanguard Institutional Index -- 1,425,108
(12,628 shares)
UMB Bank; Scout Prime R -- 2,754,364
(2,754,364 shares)
New York Life GIC -- 2,043,276
(2,000,000 face value)
Fixed Income Fund 12,569,184 0
(1,233,482 shares)
14
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE E -- RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
1999 1998
---- ----
Net assets available for benefits per the financial statements $23,839,032 $21,712,399
Amounts allocated to withdrawing participants 0 317,265
----------- -----------
Net assets available for benefits per Form 5500 $23,839,032 $21,395,134
=========== ===========
The following is a reconciliation of withdrawals paid to participants per the
financial statements to Form 5500:
1999
----
Withdrawals paid to participants per the financial statements $3,705,369
Add amounts allocated to withdrawing participants at December 31, 1999 0
Less amounts allocated to withdrawing participants at December 31, 1998 (317,265)
----------
Withdrawals paid to participants per Form 5500 $3,388,104
==========
Amounts allocated to withdrawing participants are recorded on Form 5500 as
withdrawal claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
15
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN
FOR HOURLY EMPLOYEES
LINE 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1999
INVESTMENTS HELD AT DECEMBER 31, 1999
IDENTITY OF ISSUE, BORROWER, NUMBER OF CURRENT
LESSOR, OR SIMILAR PARTY SHARES COST VALUE
- ------------------------ --------- ---- -------
Fidelity Puritan Fund 63,757 $ 1,252,645 $ 1,213,300
Fidelity Growth & Income Fund 53,335 2,314,568 2,515,293
Fidelity Diversified International Fund 17,296 357,424 443,126
Fidelity Dividend Growth Fund 993 27,170 28,782
Fidelity Retirement Money Market Portfolio 1,176,221 1,176,221 1,176,221
Fidelity U.S. Equity Index Commingled Pool 59,793 2,259,987 2,514,876
Baron Asset Fund 19,690 964,471 1,157,169
Longleaf Small Cap Fund 26,727 600,445 539,887
ProCapp Fixed Income Fund 1,233,482 12,339,426 12,569,184
VF Corporation Common Stock 40,904 1,716,772 1,227,120
Mutual Fund Window N/A 106,407 119,895
----------- -----------
$23,115,536 $23,504,853
=========== ===========
16
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
Line 27(d) - Schedule of Reportable Transactions
Year Ended December 31, 1999
No transactions required to be reported.
17