Exhibit 10.7
AMENDED AND RESTATED
NINTH 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 Ninth 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 and the VF Corporation Pension Plan ("Pension Plan"). "Committee" shall
mean the Compensation Committee of the Board of Directors of VF Corporation, or
any successor committee thereto.
ARTICLE III. ELIGIBILITY FOR BENEFITS.
The Supplemental Pension shall be payable to the Participant if his or her
employment ceases by reason of: 1) retirement on his or her Normal Retirement
Date, 2) termination of employment or 3) death while an Employee.
ARTICLE IV. SUPPLEMENTAL PENSION BENEFITS.
4.01 NORMAL RETIREMENT: The Participants in this Determination shall
receive the following Supplemental Pension payable at Normal or Late Retirement:
(a) The Normal Retirement Benefit otherwise payable to the
Participant under the Pension Plan computed 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 or her Retirement Date.
(b) The Supplemental Pension set forth in Section 4.01(a) shall be
reduced by any benefits payable to the Participant under the
Pension Plan.
4.02 TERMINATION OF EMPLOYMENT: The Supplemental Pension payable by reason
of the Participant's termination of employment shall be equal to the benefit
provided by Section 4.01 above.
4.03 DEATH WHILE AN EMPLOYEE: The Supplemental Pension payable upon the
death of the Participant while an Employee shall be as provided by Section 4.02.
4.04 FORM OF SUPPLEMENTAL PENSION:
(a) Benefits Not Subject to Code Section 409A. This Section 4.04(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. The form of
benefits payable to the Participant shall be the form which has been elected
under the Pension Plan unless the Participant or Beneficiary has elected a
different form under this Determination. Except as otherwise provided in this
Section 4.04(a), payment of Supplemental Pension benefits hereunder shall
commence at the same time as the Participant's or Beneficiary's benefits
commence under the Pension Plan, and shall be subject to the same reductions for
commencement of payments prior to Normal Retirement Date as apply to the
recipient's benefits under the Pension Plan. Notwithstanding the foregoing, a
Participant may elect to receive in a lump sum the actuarial present value of
his or her Supplemental Pension under this Determination, and if a Participant
dies while employed, his or her Beneficiary may elect to receive in a lump sum
the actuarial present value of the Participant's Supplemental Pension under this
Determination.
(b) Benefits Subject to Code Section 409A. This Section 4.04(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 or termination of
employment under Section 4.02, 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. In the case of an unmarried Participant
who dies while employed after the Board of Directors' adoption of certain design
modifications to the Pension Plan and the SERP on December 9, 2003, the present
value of his or her Supplemental Pension under this Determination shall be
determined as if such design modifications had not been adopted. The lump sum
actuarial present value calculations shall be based on (i) an interest rate
assumption equal to, under Section 4.04(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 4.04(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 sum payments.
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ARTICLE V. PARTICIPANTS.
The Committee designates as Participants for purposes of this Determination any
Employee who is classified as salary grade 25 or above for compensation purposes
as of the date he or she becomes eligible for benefits under this Determination
in accordance with Article III hereof; provided, however, that any Employee who
has been designated in any other SERP Determination shall be excluded from this
Determination to the extent that such other Determination provides for the
Supplemental Pension set forth above.
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. Nothing in this Determination shall preclude the Board of Directors from
discontinuing eligibility to participate in the SERP and this Determination at
any time before the Participant shall become vested hereunder.
ARTICLE VII. ADOPTION.
This Determination was originally approved and adopted by the Board of Directors
of the Corporation on October 20, 1999, to be effective for Participants whose
last day worked for purposes of the Pension Plan is on or after December 31,
1999, and amended and restated by the Board of Directors on October 17, 2001,
effective as if included in the Determination as originally adopted. This
Determination was amended and restated again 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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