Exhibit 10.2
AMENDED AND RESTATED SECOND SUPPLEMENTAL ANNUAL BENEFIT
DETERMINATION PURSUANT TO THE VF CORPORATION AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE
The purpose of this Amended and Restated Second Supplemental Annual Benefit
Determination (the "Determination"), which is effective as of February 7, 2006,
is to provide to designated Participants a Supplemental Pension under the VF
Corporation Amended and Restated Supplemental Executive Retirement Plan (the
"SERP").
ARTICLE II. DEFINITIONS
As used herein, words and phrases shall have such meanings as are set forth in
the SERP, the VF Corporation Pension Plan ("Pension Plan"), and those agreements
between the Corporation and certain Executives of the Corporation providing for
severance benefits upon employment termination in connection with a "change in
control" of the Corporation (the "Change in Control Agreements"). "Committee"
shall mean the Compensation Committee of the Board of Directors of VF
Corporation.
ARTICLE III. ELIGIBILITY FOR BENEFITS
The Supplemental Pension shall be payable to the Participant if his employment
terminates by reason of: 1) retirement on his Normal Retirement Date, 2) Early
Retirement approved by the Committee, 3) involuntary termination without Cause,
4) termination for Good Reason following a change in control of the Corporation
or 5) death while an Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS
4.01. Normal Retirement: The Supplemental Pension payable at Normal or
Late Retirement shall be equal to:
(a) The Normal Retirement Benefit otherwise payable to the
Participant under the Pension Plan based upon 25 Years of
Credit without reduction for any maximum contribution,
benefit or compensation limitations imposed by ERISA or the
Code on the Corporation and including in the Normal
Retirement Benefit calculation any compensation deferred by
Participant, but without regard to the amount set forth in
Appendix IV to the Pension Plan for such Participant. The
Participant's "Average Annual Compensation" for Supplemental
Pension calculation purposes shall mean the average of the
highest three years of the full amount of the Participant's
salary and bonus compensation for the ten-year period
preceding his Retirement Date.
(b) The Supplemental Pension set forth in Section 4.01(a) shall
be reduced by any benefits payable to the Participant under
all other qualified and non-qualified retirement plans,
including without
limitation the Pension Plan and the retirement plan(s) of
former employer(s). For this purpose, "retirement plan"
shall not include the VF Corporation Retirement Savings Plan
for Salaried Employees or any other savings or thrift plan
of the Corporation or any former employer(s).
4.02. Early Retirement: No Supplemental Pension shall be payable with
respect to a Participant's Early Retirement unless the Committee approves
benefit payments hereunder in connection with such Early Retirement. If so
approved, the Supplemental Pension payable at Early Retirement shall commence at
the Participant's Retirement Date and be equal to the benefit provided by
Section 4.01 above, multiplied by a fraction to reflect termination of
employment prior to Normal Retirement Date and further reduced to reflect
commencement of payments prior to age 65. The numerator of the pre-Normal
Retirement Date termination fraction shall be 26 less the number of full years
it would take for the Participant to reach or pass his Normal Retirement Date.
The denominator of this fraction shall be 25, except that the fraction shall
never exceed 1. The additional reduction for pre-age 65 commencement of benefits
shall be the same as applies under the Pension Plan.
4.03. Involuntary Termination without Cause: The Supplemental Pension
payable upon the Participant's involuntary termination without Cause shall,
without requiring approval by the Committee, be as provided by Section 4.02.
4.04. Termination for Good Reason: The Supplemental Pension payable
upon the Participant's termination for Good Reason after a change in control
shall be as provided by Section 4.03.
4.05. Death while an Employee: The Supplemental Pension payable upon
the death of the Participant while an Employee shall be as provided by Section
4.03.
4.06. Form of Supplemental Pension:
(a) Benefits Not Subject to Code Section 409A. This Section
4.06(a) shall apply solely to the portion of a Participant's
Supplemental Pension which is not subject to the
requirements of Section 409A of the Code. Except as
otherwise provided in this Section 4.06(a), the Supplemental
Pension will be paid to the Participant or his or her
Surviving Spouse at the same time and in the same form as
benefits are paid under the Pension Plan, provided, however,
that death or survivor benefits upon the death of the
Participant are payable only to his or her Surviving Spouse,
if any. Notwithstanding the foregoing, benefits payable
pursuant to Section 4.03 ("involuntary termination without
Cause"), Section 4.04 ("termination for Good Reason") or
Section 4.05 ("death while an Employee") shall not commence
prior to the Participant's Normal Retirement Date except
that, at his or her sole discretion, the Participant or his
or her Surviving Spouse, as applicable, may elect, in the
event of termination for Good Reason after a change in
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control or death while an Employee, to receive in a lump sum
the actuarial present value of the Participant's
Supplemental Pension under this Determination. Moreover, at
any other time that a Supplemental Pension is scheduled to
commence, the Participant may elect to receive in a lump sum
the actuarial present value of his or her Supplemental
Pension under this Determination.
(b) Benefits Subject to Code Section 409A. This Section 4.06(b)
shall apply solely to the portion of a Participant's
Supplemental Pension which is subject to the requirements of
Section 409A of the Code. The Supplemental Pension shall be
paid to the Participant in a lump sum in cash. The lump sum
payment shall be made to the Participant within 75 days
following the Participant's Normal or Late Retirement under
Section 4.01, Early Retirement under Section 4.02,
involuntary termination without Cause under Section 4.03 or
termination for Good Reason under Section 4.04, as
applicable; provided, however, that in the case of a
Participant who is a "specified employee" within the meaning
of Section 409A(a)(2)(B)(i) of the Code, payment of such
Participant's Supplemental Pension shall not be made until
the date which is six months after the date of the
Participant's separation from service (or, if earlier, the
date of death of the Participant). If a Participant dies
while employed, his or her Beneficiary shall, within 75 days
following the Participant's death, receive in a lump sum the
actuarial present value of the Participant's Supplemental
Pension under this Determination.
(c) Present Value Calculation. Under Section 4.06(a) (but not
under Section 4.06(b)), the lump sum actuarial present value
calculation for a Participant in the event of termination
for Good Reason after a change in control will be based on a
6% interest rate assumption and a mortality assumption equal
to the difference between (a) 85 and (b) the Participant's
whole number age at the time of his or her termination of
employment. All other lump sum actuarial present value
calculations will be based on (i) an interest rate
assumption equal to, under Section 4.06(a), the expected
rate of return on assets for financial accounting purposes
under the Pension Plan for the year in which the lump sum
payment is to be made and, under Section 4.06(b), the yield
for the Moody's Aa corporate bond index as of the last
business day preceding the beginning of the calendar quarter
in which the lump sum payment is to be made (or would be
made except for the Participant's "specified employee"
status), and (ii) the mortality assumption set forth in the
Pension Plan for purposes of calculating lump sums.
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ARTICLE V. PARTICIPANTS
The Committee shall from time to time designate the Employees who shall be
Participants for purposes of this Determination by attaching hereto a Schedule A
(as amended or supplemented).
ARTICLE VI. VESTING
The Participant shall become vested in the Supplemental Pension payable pursuant
to this Determination upon satisfaction of the vesting period provided in the
SERP or, if applicable, as provided in Participant's Change in Control
Agreement, whichever is earlier. Nothing in this Determination shall preclude
the Board of Directors from making a Participant ineligible to participate in
the SERP and this Determination any time before the Participant shall become
vested hereunder.
ARTICLE VII. ADOPTION
This Determination was originally approved and adopted by the Committee on
December 2, 1991, and the Committee's action was ratified by the Board of
Directors of the Corporation on December 3, 1991. This Determination was amended
and restated by the Board of Directors on and effective as of February 7, 2006,
in order (i) to preserve the favorable tax treatment available to benefits
earned and vested under the Determination on or before December 31, 2004 in view
of the enactment of Section 409A of the Code and the issuance of regulations
thereunder by the Department of the Treasury, and (ii) with respect to all other
benefits earned under the Determination, to comply with the requirements of
Section 409A and the regulations thereunder. The Board of Directors reserves the
right to amend the Determination, either retroactively or prospectively, in
whatever respect is required to achieve and maintain compliance with the
requirements of Section 409A of the Code and the regulations thereunder.
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AMENDED AND RESTATED
SECOND SUPPLEMENTAL ANNUAL BENEFIT DETERMINATION
AMENDED SCHEDULE A
1. M. J. McDonald
2. C. S. Cummings
Date: February 7, 2006
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