VF CORPORATION
1997 10-K
EXHIBIT 99 - ADDITIONAL EXHIBITS:
(A) FORM 11-K FOR VF CORPORATION TAX-ADVANTAGE SAVINGS PLAN
FOR SALARIED EMPLOYEES FOR THE YEAR ENDED DECEMBER 31,
1997
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, 1997
Commission file number: 1-5256
-----------------------------
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
(Full title of plan)
1047 NORTH PARK ROAD
WYOMISSING, PA 19610
(Address of principal executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
1
Item 1. Changes in the Plan
There were no changes in the Plan.
Item 2. Changes in Investment Policy
There were no changes in investment policy.
Item 3. Contributions Under the Plan
Contributions made by VF Corporation (the Corporation) are measured by
reference to the employees' contributions and are not discretionary.
Item 4. Participating Employees
There were approximately 6,127 enrolled participants in the Plan as of December
31, 1997, out of approximately 7,205 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: 1047 North Park Road, Wyomissing, PA 19610. 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 UMB
Bank, n.a., 10th and Grand, P.O. Box 419692, Kansas City, MO
64141-6692, has been appointed as Trustee under the Plan. Under the
terms of the Trustee Agreement, UMB Bank, n.a., holds and invests
all assets of the Plan, subject to the direction of each of the
participants of the Plan regarding the investment fund or funds to
receive contributions.
(b) The custodian's compensation is paid by the Corporation.
(c) No bond was furnished or is required to be furnished by the Trustee.
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. The statement also shows
the Corporation's matching contributions allocated to the participant through
the Employee Stock Ownership Plan, which are invested in VF Corporation Series B
Preferred Stock (ESOP Preferred Stock), and the fair values based on the
preferred stock's stated redemption price of $30.875 per share or 160% of the
market value of the Corporation's Common Stock, whichever is greater.
2
Item 8. Investment of Funds
Each participant by calling the VF Savings Line directs the Plan Administrator
to notify the Trustee 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
- Equity Growth Fund
- Foreign Fund
- VF Corporation Common Stock Fund (investing in common stock of the
Corporation)
Brokerage commissions of $4,233, $3,878, and $8,909 for the years ended
December 31, 1997, 1996 and 1995 were paid by the Trustee to acquire the
Corporation's common stock for the Plan.
The Corporation's matching contributions go solely to the ESOP. These
contributions are allocated to participants who receive full value in the form
of ESOP Preferred Stock and are used by the ESOP to pay principal and debt
service on a loan from the Corporation.
Item 9. Financial Statements and Exhibits
(a) Financial Statements Page No.
Report of Independent Accountants 5
Statements of Net Assets Available for Benefits with Fund Information -
December 31, 1997 and 1996
- Combined Plan 6
- Money Market Fund and Fixed Income Fund 7
- Balanced Fund and Equity Growth & Income Fund 8
- Equity Growth Fund and Foreign Fund 9
- VF Corporation Common Stock Fund and 10
Employee Stock Ownership Plan
- Loan Fund 11
Statements of Changes in Net Assets Available for Benefits For the
Years Ended December 31, 1997, 1996 and 1995
- Combined Plan 12
- Money Market Fund 13
- Fixed Income Fund 14
- Balanced Fund 15
- Equity Growth & Income Fund 16
- Equity Growth Fund 17
- Foreign Fund 18
- VF Corporation Common Stock Fund 19
- Employee Stock Ownership Plan 20
- Loan Fund 21
Notes to Financial Statements 22
Schedules:
Schedules I, II and III have been omitted because the required
information is included in the financial statements and the
related notes.
(b) Exhibits - none
3
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 Salaried Employees
---------------------------------------------
By: /s/ Louis J. Fecile
------------------------------------------
Louis J. Fecile
Vice President - Employee Benefits
Date: March 20, 1998
4
Report of Independent Accountants
VF Corporation Pension Plan Committee
VF Corporation Tax-Advantaged Savings Plan
for Salaried Employees
We have audited the accompanying statements of net assets available for
benefits of the VF Corporation Tax-Advantaged Savings Plan for Salaried
Employees as of December 31, 1997 and December 31, 1996, and the related
statements of changes in net assets available for benefits for the three years
in the period ended December 31, 1997. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the VF
Corporation Tax-Advantaged Savings Plan for Salaried Employees at December 31,
1997 and December 31, 1996, and the changes in its net assets available for
benefits for the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statements
of net assets available for benefits and in the statements of changes in net
assets available for benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits and changes in net
assets available for benefits of each fund. The fund information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
March 20, 1998
5
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
December 31
--------------------------------
ASSETS 1997 1996
- ------ ---- ----
Investments, at fair value
VF Corporation Common Stock -
721,661 shares in 1997
326,618 shares in 1996 $ 33,557,236 $ 22,046,715
VF Corporation ESOP Preferred Stock -
1,824,820 shares in 1997
1,881,515 shares in 1996 135,766,589 101,601,810
United States government obligations 17,022,422 16,991,039
Other securities 116,344,929 90,076,616
------------- -------------
Total investments 302,691,176 230,716,180
Dividends and interest receivable 310,461 312,017
Loans receivable from participants 10,246,359 9,374,718
------------- -------------
TOTAL ASSETS 313,247,996 240,402,915
------------- -------------
LIABILITIES
Employee Stock Ownership
Plan obligation - payable to VF Corporation 35,916,035 41,563,481
------------- -------------
TOTAL LIABILITIES 35,916,035 41,563,481
------------- -------------
Net assets available for benefits $277,331,961 $198,839,434
============= =============
See notes to financial statements.
6
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
MONEY MARKET FUND AND FIXED INCOME FUND
Money Market Fund Fixed Income Fund
December 31 December 31
----------------------------- -------------------------------
ASSETS 1997 1996 1997 1996
- ------ ---- ---- ---- ----
Investments, at fair value
United States government obligations $ 0 $ 0 $17,022,422 $16,991,039
Other securities 7,852,439 6,629,950 3,094,667 2,250,229
------------ ------------ ------------- -------------
Total investments 7,852,439 6,629,950 20,117,089 19,241,268
Dividends and interest receivable 399 180 304,518 307,497
------------ ------------ ------------- -------------
Net assets available for benefits $7,852,838 $6,630,130 $20,421,607 $19,548,765
============ ============ ============= =============
See notes to financial statements.
7
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
BALANCED FUND AND EQUITY GROWTH & INCOME FUND
Balanced Fund Equity Growth & Income Fund
December 31 December 31
-------------------------------- --------------------------------
1997 1996 1997 1996
---- ---- ---- ----
ASSETS
Investments, at fair value
Other securities $10,113,221 $7,045,986 $58,738,770 $44,337,501
------------- ------------ ------------- -------------
Total investments 10,113,221 7,045,986 58,738,770 44,337,501
Dividends and interest receivable 488 181 543 378
------------- ------------ ------------- -------------
Net assets available for benefits $10,113,709 $7,046,167 $58,739,313 $44,337,879
============= ============ ============= =============
See notes to financial statements.
8
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH FUND & FOREIGN FUND
Equity Growth Fund Foreign Fund
December 31 December 31
------------------------------- ------------------------------
1997 1996 1997 1996
---- ---- ---- ----
ASSETS
Investments, at fair value
Other securities $29,911,441 $24,163,579 $6,260,312 $5,329,365
------------- ------------- ------------ ------------
Total investments 29,911,441 24,163,579 6,260,312 5,329,365
Dividends and interest receivable 399 382 348 124
------------- ------------- ------------ ------------
Net assets available for benefits $29,911,840 $24,163,961 $6,260,660 $5,329,489
============= ============= ============ ============
See notes to financial statements.
9
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
VF CORPORATION COMMON STOCK FUND AND EMPLOYEE STOCK OWNERSHIP PLAN
VF Corporation Common Stock Fund Employee Stock Ownership Plan
December 31 December 31
----------------------------- --------------------------------
ASSETS 1997 1996 1997 1996
- ------ ---- ---- ---- ----
Investments, at fair value
VF Corporation Common Stock
721,661 shares in 1997
326,616 shares in 1996 $33,557,236 $22,046,715 $ 0 $ 0
VF Corporation ESOP
Preferred Stock
1,824,820 shares in 1997
1,881,515 shares in 1996 0 0 135,766,589 101,601,810
Other securities 223,111 240,255 150,968 79,751
------------- ------------- -------------- --------------
Total investments 33,780,347 22,286,970 135,917,557 101,681,561
Dividends and interest receivable 1,282 454 2,484 2821
------------- ------------- -------------- --------------
TOTAL ASSETS $33,781,629 $22,287,424 $135,920,041 $101,684,382
------------- ------------- -------------- --------------
LIABILITIES
Employee Stock Ownership
Plan obligation - payable to VF Corporation 0 0 35,916,035 41,563,481
------------- ------------- -------------- --------------
TOTAL LIABILITIES 0 0 35,916,035 41,563,481
------------- ------------- -------------- --------------
Net assets available for benefits $33,781,629 $22,287,424 $100,004,006 $ 60,120,901
============= ============= ============== ==============
See notes to financial statements.
10
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
LOAN FUND
Loan Fund
December 31
------------------------------
1997 1996
---- ----
ASSETS
Loans receivable from participants 10,246,359 9,374,718
------------- ------------
Net assets available for benefits $10,246,359 $9,374,718
============= ============
See notes to financial statements.
11
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
Year Ended December 31
-----------------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Dividends on VF Corporation Common Stock $ 525,813 $ 469,018 $ 538,867
Dividends on ESOP Preferred Stock 3,847,891 3,971,574 4,131,256
Interest 1,232,836 1,234,816 1,255,562
Income from mutual funds and
bank common trust funds 6,786,224 4,639,609 3,693,225
-------------- -------------- --------------
12,392,764 10,315,017 9,618,910
-------------- -------------- --------------
Contributions
Interest on loan repayments 710,447 637,885 548,512
Participants 15,431,933 14,670,636 14,883,216
VF Corporation 5,665,204 5,527,985 5,762,864
-------------- -------------- --------------
21,807,584 20,836,506 21,194,592
-------------- -------------- --------------
Withdrawals (14,085,336) (16,191,145) (6,901,351)
Forfeitures that reduce
VF Corporation contributions (218,609) (301,873) (255,310)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (3,865,833) (4,386,805) (4,878,310)
Expenses 0 0 (53,764)
Net realized and unrealized appreciation
in fair value of investments 62,461,957 34,081,179 20,147,532
-------------- -------------- --------------
Net increase 78,492,527 44,352,879 38,872,299
Net assets available for benefits
at beginning of year 198,839,434 154,486,555 115,614,256
-------------- -------------- --------------
Net assets available for benefits
at end of year $277,331,961 $198,839,434 $154,486,555
============== ============== ==============
See notes to financial statements.
12
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
MONEY MARKET FUND
Year Ended December 31
---------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Income from mutual funds and
bank common trust funds $ 399,938 $ 313,675 $ 338,605
------------ ------------ -------------
399,938 313,675 338,605
------------ ------------ -------------
Contributions
Interest on loan repayments 0 0 49,368
Participants 1,906,211 1,537,425 1,146,077
------------ ------------ -------------
1,906,211 1,537,425 1,195,445
------------ ------------ -------------
Withdrawals (653,789) (991,225) (373,362)
Forfeitures that reduce
VF Corporation contributions 0 (9) (579)
Fund transfers, net (429,652) (449,011) (396,856)
------------ ------------ -------------
Net increase 1,222,708 410,855 763,253
Net assets available for benefits
Beginning of year, as reported 6,630,130 7,642,943 6,879,690
Reclassify loan balances to separate fund 0 (1,423,668) 0
------------ ------------ -------------
Beginning of year, as adjusted 6,630,130 6,219,275 6,879,690
------------ ------------ -------------
End of year $7,852,838 $6,630,130 $ 7,642,943
============ ============ =============
See notes to financial statements.
13
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
FIXED INCOME FUND
Year Ended December 31
--------------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Interest $ 1,232,836 $ 1,234,816 $ 1,255,562
Income from mutual funds and
bank common trust funds 120,111 42,437 41,620
------------- ------------- -------------
1,352,947 1,277,253 1,297,182
------------- ------------- -------------
Contributions
Interest on loan repayments 0 0 96,211
Participants 1,889,960 2,109,713 2,700,460
------------- ------------- -------------
1,889,960 2,109,713 2,796,671
------------- ------------- -------------
Withdrawals (1,785,929) (2,565,214) (1,402,288)
Forfeitures that reduce
VF Corporation contributions 0 (11) (706)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 43,040 (109,871) 191,476
Fund transfers, net (627,176) 30,008 (571,686)
------------- ------------- -------------
Net increase 872,842 741,878 2,310,649
Net assets available for benefits
Beginning of year, as reported 19,548,765 20,437,850 18,127,201
Reclassify loan balances to separate fund 0 (1,630,963) 0
------------- ------------- -------------
Beginning of year, as adjusted 19,548,765 18,806,887 18,127,201
------------- ------------- -------------
End of year $20,421,607 $19,548,765 $20,437,850
============= ============= =============
See notes to financial statements.
14
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
BALANCED FUND
Year Ended December 31
-------------------------------
1997 1996 1995
---- ---- ----
Investment income
Income from mutual funds and
bank common trust funds $ 784,198 $ 721,016 $ 141,331
------------- ------------ --------------
784,198 721,016 141,331
------------- ------------ --------------
Contributions
Interest on loan repayments 0 0 7,685
Participants 918,520 703,667 226,246
------------- ------------ --------------
918,520 703,667 233,931
------------- ------------ --------------
Withdrawals (444,470) (317,576) (40,993)
Forfeitures that reduce
VF Corporation contributions 0 (238) 0
Net realized and unrealized appreciation
in fair value of investments 942,971 70,842 90,964
Fund transfers, net 866,323 1,936,006 3,560,514
------------- ------------ --------------
Net increase 3,067,542 3,113,717 3,985,747
Net assets available for benefits
Beginning of year, as reported 7,046,167 3,985,747 0
Reclassify loan balances to separate fund 0 (53,297) 0
------------- ------------ --------------
Beginning of year, as adjusted 7,046,167 3,932,450 0
------------- ------------ --------------
End of year $10,113,709 $7,046,167 $ 3,985,747
============= ============ ==============
See notes to financial statements.
15
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH & INCOME FUND
Year Ended December 31
----------------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Income from mutual funds and
bank common trust funds $ 2,717,905 $ 2,148,023 $ 1,688,047
------------- ------------- --------------
2,717,905 2,148,023 1,688,047
------------- ------------- --------------
Contributions
Interest on loan repayments 0 0 154,780
Participants 4,556,161 4,131,053 4,215,860
------------- ------------- --------------
4,556,161 4,131,053 4,370,640
------------- ------------- --------------
Withdrawals (3,171,577) (3,484,495) (1,378,118)
Forfeitures that reduce
VF Corporation contributions 0 (391) (1,272)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 10,862,416 5,037,526 7,296,660
Fund transfers, net (563,471) 1,525,815 (1,485,754)
------------- ------------- --------------
Net increase 14,401,434 9,357,531 10,490,203
Net assets available for benefits
Beginning of year, as reported 44,337,879 37,437,759 26,947,556
Reclassify loan balances to separate fund 0 (2,457,411) 0
------------- ------------- --------------
Beginning of year, as adjusted 44,337,879 34,980,348 26,947,556
------------- ------------- --------------
End of year $58,739,313 $44,337,879 $ 37,437,759
============= ============= ==============
See notes to financial statements.
16
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH FUND
Year Ended December 31
---------------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Income from mutual funds and
bank common trust funds $ 1,952,775 $ 1,130,443 $ 1,353,455
------------- ------------- -------------
1,952,775 1,130,443 1,353,455
------------- ------------- -------------
Contributions
Interest on loan repayments 0 100,380
Participants 2,779,070 3,389,402 3,329,947
------------- ------------- -------------
2,779,070 3,389,402 3,430,327
------------- ------------- -------------
Withdrawals (1,866,067) (2,420,165) (1,087,899)
Forfeitures that reduce
VF Corporation contributions 0 (236) (1,444)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 4,282,170 1,604,220 4,253,881
Fund transfers, net (1,400,069) (4,267,963) 1,794,722
------------- ------------- -------------
Net increase (decrease) 5,747,879 (564,299) 9,743,042
Net assets available for benefits
Beginning of year, as reported 24,163,961 25,722,536 15,979,494
Reclassify loan balances to separate fund 0 (994,276) 0
------------- ------------- -------------
Beginning of year, as adjusted 24,163,961 24,728,260 15,979,494
------------- ------------- -------------
End of year $29,911,840 $24,163,961 $25,722,536
============= ============= =============
See notes to financial statements.
17
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
FOREIGN FUND
Year Ended December 31
--------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Income from mutual funds and
bank common trust funds $ 748,260 $ 257,147 $ 98,277
------------ ------------ ------------
748,260 257,147 98,277
------------ ------------ ------------
Contributions
Interest on loan repayments 0 0 5,537
Participants 788,136 504,049 165,453
------------ ------------ ------------
788,136 504,049 170,990
------------ ------------ ------------
Withdrawals (327,669) (217,661) (9,708)
Forfeitures that reduce
VF Corporation contributions 0 (234) 0
Net realized and unrealized appreciation
(depreciation) in fair value of investments (347,015) 428,766 (122,155)
Fund transfers, net 69,459 1,987,203 2,198,243
------------ ------------ ------------
Net increase 931,171 2,959,270 2,335,647
Net assets available for benefits
Beginning of year, as reported 5,329,489 2,335,647 0
Reclassify loan balances to separate fund 0 34,572 0
------------ ------------ ------------
Beginning of year, as adjusted 5,329,489 2,370,219 0
------------ ------------ ------------
End of year $6,260,660 $5,329,489 $2,335,647
============ ============ ============
See notes to financial statements.
18
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
VF CORPORATION COMMON STOCK FUND
Year Ended December 31
----------------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Dividends on VF Corporation
Common Stock $ 525,813 $ 469,018 $ 538,867
Income from mutual funds and
bank common trust funds 37,029 5,963 6,622
------------- ------------- --------------
562,842 474,981 545,489
------------- ------------- --------------
Contributions
Interest on loan repayments 0 0 134,551
Participants 2,593,875 2,295,327 3,099,173
------------- ------------- --------------
2,593,875 2,295,327 3,233,724
------------- ------------- --------------
Withdrawals (1,674,899) (1,888,739) (1,137,459)
Forfeitures that reduce
VF Corporation contributions 0 (143) (802)
Net realized and unrealized appreciation
in fair value of investments 8,601,707 4,701,766 1,635,363
Fund transfers, net 1,410,680 (1,573,213) (5,099,183)
------------- ------------- --------------
Net increase (decrease) 11,494,205 4,009,979 (822,868)
Net assets available for benefits
Beginning of year, as reported 22,287,424 20,458,033 21,280,901
Reclassify loan balances to separate fund 0 (2,180,588) 0
------------- ------------- --------------
Beginning of year, as adjusted 22,287,424 18,277,445 21,280,901
------------- ------------- --------------
End of year $33,781,629 $22,287,424 $ 20,458,033
============= ============= ==============
See notes to financial statements.
19
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EMPLOYEE STOCK OWNERSHIP PLAN
Year Ended December 31
----------------------------------------------------
1997 1996 1995
---- ---- ----
Investment income
Dividends on ESOP Preferred Stock $ 3,847,891 $ 3,971,574 $ 4,131,256
Income from mutual funds and
bank common trust funds 26,008 20,905 25,268
-------------- ------------- --------------
3,868,944 3,992,479 4,156,524
-------------- ------------- --------------
Contributions
VF Corporation 5,665,204 5,527,985 5,762,864
-------------- ------------- --------------
5,665,204 5,527,985 5,762,864
-------------- ------------- --------------
Withdrawals (3,648,224) (3,526,117) (1,471,524)
Forfeitures that reduce
VF Corporation contributions (218,609) (300,611) (250,507)
Expenses 0 0 (53,764)
Interest paid to VF Corporation on Employee Stock
Ownership Plan obligation (3,865,833) (4,386,805) (4,878,310)
Net realized and unrealized appreciation
in fair value of investments 38,076,668 22,347,930 6,801,343
-------------- ------------- --------------
Net increase 39,883,105 23,654,861 10,066,626
Net assets available for benefits
Beginning of year 60,120,901 36,466,040 26,399,414
-------------- ------------- --------------
End of year $100,004,006 $60,120,901 $ 36,466,040
============== ============= ==============
See notes to financial statements.
20
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
LOAN FUND
Year Ended December 31
---------------------------------
1997 1996
---- ----
Contributions
Interest on loan repayments $ 710,447 $ 637,885
------------- ------------
710,447 637,885
------------- ------------
Withdrawals (512,712) (779,953)
Forfeitures that reduce
VF Corporation contributions 0 0
Expenses 0 0
Net realized and unrealized appreciation
in fair value of investments 0 0
Fund transfers, net 673,906 811,155
------------- ------------
Net increase 871,641 669,087
------------- ------------
Net assets available for benefits
Beginning of year, as reported 9,374,718 0
Reclassify loan balances to separate fund 0 8,705,631
------------- ------------
Beginning of year, as adjusted 9,374,718 8,705,631
------------- ------------
End of year $10,246,359 $9,374,718
============= ============
See notes to financial statements.
21
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF THE PLAN
VF Corporation (the Corporation) sponsors the VF Corporation Tax-Advantaged
Savings Plan for Salaried Employees (the Plan), which is a cash or deferred
plan under Section 401(k) of the Internal Revenue Code. Under the Plan, certain
salaried employees of specified subsidiaries, having at least one year of
credited service, may elect to contribute between 2% and 10% of their
compensation to the Plan. The Corporation matches employee contributions by 50%
for up to 6% of compensation contributed by the employee. Employees remain
fully vested in their contributions to the Plan. The Corporation's matching
contributions are vested monthly on a pro rata basis, with full vesting after
five years of service or upon normal or late retirement, disability or death.
The Plan includes an Employee Stock Ownership Plan (ESOP). In 1990, the ESOP
purchased 2,105,263 shares of VF Corporation 6.75% Series B ESOP Convertible
Preferred Stock (ESOP Preferred Stock) for $65.0 million. Each share of ESOP
Preferred Stock, which has a redemption value of $30.875 plus cumulative
accrued dividends, is convertible into 1.6 shares of VF Corporation Common
Stock and is entitled to two votes. The trustee for the ESOP may convert the
ESOP Preferred Stock to Common Stock at any time or may cause the Corporation
to redeem the ESOP Preferred Stock under certain circumstances. The ESOP
Preferred Stock also has preference in liquidation over all other stock issues.
The Corporation's matching contributions, all of which go into the ESOP, are
allocated to employees in shares of ESOP Preferred Stock. Of the shares of ESOP
Preferred Stock owned by the ESOP, 973,860 shares in 1997 and 854,856 shares in
1996 have been allocated to employees.
The ESOP's purchase of the ESOP Preferred Stock was funded by a loan of $65.0
million from the Corporation that bears interest at 9.8%. The loan will be
repaid in increasing installments through 2002 from future minimum Corporation
matching contributions to the ESOP and dividends on the ESOP Preferred Stock.
The Corporation's minimum required matching contributions and dividends are
$8.9 million in 1998 and increases each year to $9.6 million over the following
three years.
Employee contributions are invested at the direction of the employee in one or
more of the funds administered by the Plan's trustee. 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) Equity Growth Fund: Monies are primarily invested in
common stock, securities convertible into common stock
and debt securities, with emphasis on long-term growth
opportunities.
(f) Foreign Fund: Monies are invested in stocks and debt
obligations of companies and governments outside the
United States.
22
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
(g) 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.
Individual accounts are maintained for each participant; each account includes
the individual's contributions, Corporation matching 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 in an annuity, or accounts may be rolled over
into another IRS-approved tax deferral vehicle. Forfeitures are used to reduce
VF Corporation's obligation to pay plan expenses.
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 100% of
their account balance in the Money Market Fund and 75% of their account balance
of remaining funds, not to exceed 50% of the participant's total vested account
balance, but may not borrow from the Corporation matching portion. Payment in
full is required at termination of employment. There were 2,691 loans
outstanding at December 31, 1997.
Although it has no intent to do so, the Corporation may terminate the Plan in
whole or in part at any time. In the event of termination, participants become
fully vested in their accounts.
The number of participants in each fund was as follows:
Year Ended December 31
----------------------
1997 1996 1995
---- ---- ----
Money Market Fund 2,949 2,862 2,805
Fixed Income Fund 3,393 3,731 4,308
Balanced Fund 1,687 1,393 1,035
Equity Growth & Income Fund 5,446 5,420 5,725
Equity Growth Fund 4,026 4,040 4,513
Foreign Fund 1,308 1,032 700
VF Corporation Common Stock Fund 4,377 4,146 4,553
Employee Stock Ownership Plan 7,075 7,077 7,461
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.
23
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE B -- SIGNIFICANT ACCOUNT 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. The ESOP Preferred Stock is stated at fair
value, based on the greater of 160% of the fair value of the Corporation's
Common Stock or the preferred stock's stated redemption price of $30.875 per
share. For commercial notes and United States government obligations, the Plan
trustee 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.
The Plan presents in the statement of changes in net assets 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.
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.
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.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has issued a Favorable Determination Letter dated
January 16, 1996 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.
24
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS
Net unrealized appreciation (depreciation) in fair value of investments
included in Plan equity includes the following:
Net Unrealized
Appreciation (Depreciation) in
Fair Value for the Year Ended December 31
--------------------------------------------------
1997 1996 1995
-------------- -------------- --------------
Fair value as determined by quoted market
or stated redemption price:
VF Corporation Common Stock $ 8,278,471 $ 4,168,463 $ 52,620
ESOP Preferred Stock 37,226,323 22,201,877 6,484,308
Mutual funds and
bank common trust funds 14,189,381 6,121,697 11,083,328
-------------- -------------- --------------
59,694,175 32,492,037 17,620,256
Fair value as determined by
Plan trustee:
United States government
obligations 0 0 0
Commercial notes 41,354 (109,067) 191,467
Mutual funds and
bank common trust funds 0 0 0
-------------- -------------- --------------
41,354 (109,067) 191,467
-------------- -------------- --------------
$59,735,529 $32,382,970 $17,811,723
============== ============== ==============
Fair Value
at December 31
-------------------------------------------------
1997 1996 1995
--------------- --------------- ---------------
Fair value as determined by quoted market
or stated redemption price:
VF Corporation Common Stock $ 33,557,236 $ 22,046,715 $ 17,961,692
ESOP Preferred Stock 135,766,589 101,601,810 82,920,550
Mutual funds and
bank common trust funds 112,283,636 86,921,008 71,875,357
--------------- --------------- ---------------
281,607,461 210,569,533 172,757,599
Fair value as determined by
Plan trustee:
United States government
obligations 17,022,422 16,991,039 17,329,048
Commercial notes 501,345 812,427 678,070
Mutual funds and
bank common trust funds 3,559,948 2,343,181 1,328,036
--------------- --------------- ---------------
21,083,715 20,146,647 19,335,154
--------------- --------------- ---------------
$302,691,176 $230,716,180 $192,092,753
=============== =============== ===============
Unrealized appreciation in fair value of investments at December 31, 1997, 1996
and 1995 was $129,045,244, $70,620,796, and $39,182,641, respectively.
25
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Net realized appreciation (depreciation) in fair value of investments includes
the following:
Year Ended December 31
1997 1996 1995
-------------- -------------- ---------------
Aggregate proceeds $62,783,730 $62,417,960 $ 57,592,059
Aggregate cost 60,507,302 60,719,749 55,256,250
-------------- -------------- ---------------
Net realized gain $ 2,726,428 $ 1,698,209 $ 2,335,809
============== ============== ===============
Of the net realized gain, $1,173,581, $679,356, and $1,690,513 related to
gains recognized on the sale of VF Common Stock and the redemption of VF
Preferred Stock for the years ended 1997, 1996 and 1995, respectively.
The fair value of individual investments that represent 5% or more of the
Plan's net assets at December 31, 1997 and 1996 are as follows:
1997 1996
---- ----
ESOP Preferred Stock $135,766,589 $101,601,810
Fidelity Growth & Income Fund 58,657,037 44,076,501
Fidelity Magellan Fund 29,871,782 23,976,308
VF Corporation Common Stock 33,557,236 22,046,715
26
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTE TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Investment held at December 31, 1997:
NUMBER OF SHARES
Name of Issuer and Title of Issue OR PRINCIPAL AMOUNT FAIR VALUE COST
- ---------------------------------- -------------------- ---------------- ----------------
Securities of participating employer:
VF Corporation Common Stock 721,661 $ 33,557,236 $ 15,588,925
VF Corporation 6.75% Series B ESOP
Convertible Preferred Stock 1,824,820 135,766,589 56,341,317
---------------- ---------------
169,323,825 71,930,242
---------------- ---------------
United States Government Obligations:
Small Business Administration Loans:
(Rates of 5.20% to 8.83%,
maturities of 03/02/97 to 05/23/11) 15,978,300 15,977,952 15,955,145
F.M.H.A. loans (Rates of 6.475% to 9.875%
maturities 05/01/98 to 06/10/12) 1,053,018 1,044,470 1,044,470
---------------- ---------------
17,022,422 16,999,615
---------------- ---------------
Other Securities:
Mutual funds and bank common trust funds:
Kemper Money Market Fund 7,455,110 7,455,110 7,455,110
Fidelity Puritan Fund 519,196 10,062,009 8,983,673
Fidelity Growth & Income Fund 1,539,555 58,657,037 36,082,053
Fidelity Magellan Fund 313,549 29,871,782 21,791,547
Templeton Foreign Fund 626,904 6,237,697 6,348,920
UMB Bank Fund: Scout Prime - R 3,559,948 3,559,948 3,559,948
American Commercial Lines (Due 07/15/01) 106,000 106,000 106,803
Private Export Funding Corp. (Due 04/30/04) 162,500 168,773 159,021
Smith Enron Cogeneration LP (Due 12/15/06) 229,000 226,573 229,000
---------------- --------------
$302,691,176 $173,645,932
================ ==============
27