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Exhibit 99a
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, 1998
Commission file number: 1-5256
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED 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)
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Item 1. Changes in the Plan
There were no changes in the Plan.
Item 2. Changes in Investment Policy
Effective January 1, 1998 the following funds were added to the Plan: Vanguard
Money Market Fund, Vanguard Institutional Index Fund, Longleaf Partners
Small-Cap Fund and Baron Asset (Small-Cap Growth Fund). Effective January 1,
1998 the following funds were removed from the Plan: Kemper Money Market Fund
and Fidelity Magellan Fund.
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 6,862 enrolled participants in the Plan as of December
31, 1998, out of approximately 8,553 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 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. The Trustee manages the Fixed Income Fund and
Scout Prime.
(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.
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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
- - Index 500 Fund
- - Small-Cap Value Fund
- - Small-Cap Growth Fund
- - Foreign Fund
- - VF Corporation Common Stock Fund (investing in common stock of the
Corporation)
Brokerage commissions of $6,579, $4,233 and $3,878 for the years ended December
31, 1998, 1997 and 1996 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, 1998 and 1997
- Combined Plan ........................................ 6
- Money Market Fund and Fixed Income Fund .............. 7
- Balanced Fund and Equity Growth & Income Fund ........ 8
- Equity Growth Fund ................................... 9
- Index 500 Fund and Small-Cap Value Fund .............. 10
- Small-Cap Growth Fund and Foreign Fund ............... 11
- VF Corporation Common Stock Fund and
Employee Stock Ownership Plan ........................ 12
- Loan Fund ............................................ 13
Statements of Changes in Net Assets Available for Benefits,
with Fund Information For the Years Ended
December 31, 1998, 1997 and 1996
- Combined Plan ......................................... 14
- Money Market Fund ..................................... 15
- Fixed Income Fund ..................................... 16
- Balanced Fund ......................................... 17
- Equity Growth & Income Fund ........................... 18
- Equity Growth Fund .................................... 19
- Index 500 Fund ........................................ 20
- Small-Cap Value Fund .................................. 21
- Small-Cap Growth Fund ................................. 22
- Foreign Fund .......................................... 23
- VF Corporation Common Stock Fund ...................... 24
- Employee Stock Ownership Plan ......................... 25
- Loan Fund ............................................. 26
Notes to Financial Statements ........................... 27
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
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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
VF Corporation
Date: March 22, 1999
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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, 1998 and December 31, 1997, and the related statements of changes
in net assets available for benefits for the three years in the period ended
December 31, 1998. 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,
1998 and December 31, 1997, and the changes in its net assets available for
benefits for the three years in the period ended December 31, 1998 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/ PricewaterhouseCoopers LLP
Greensboro, North Carolina
March 22, 1999
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
December 31
----------------------------
ASSETS 1998 1997
- ------ ------------ ------------
Investments, at fair value
VF Corporation Common Stock -
713,263 shares in 1998
721,661 shares in 1997 $ 33,434,203 $ 33,557,236
VF Corporation ESOP Preferred Stock -
1,760,119 shares in 1998
1,824,820 shares in 1997 132,008,899 135,766,589
United States government obligations 23,642,357 17,022,422
Other securities 163,179,051 116,344,929
------------ ------------
Total investments 352,264,510 302,691,176
Dividends and interest receivable 412,438 310,461
Loans receivable from participants 10,779,465 10,246,359
------------ ------------
TOTAL ASSETS 363,456,413 313,247,996
------------ ------------
LIABILITIES
Employee Stock Ownership
Plan obligation - payable to VF Corporation 29,023,961 35,916,035
------------ ------------
TOTAL LIABILITIES 29,023,961 35,916,035
------------ ------------
Net assets available for benefits $334,432,452 $277,331,961
============ ============
See notes to financial statements.
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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 1998 1997 1998 1997
- ----- ----------- ----------- ----------- -----------
Investments, at fair value
United States government obligations
$ 0 $ 0 $23,642,357 $17,022,422
Other securities 9,438,131 7,852,439 6,415,749 3,094,667
----------- ----------- ----------- -----------
Total investments 9,438,131 7,852,439 30,058,106 20,117,089
Dividends and interest receivable
308 399 406,719 304,518
----------- ----------- ----------- -----------
Net assets available for benefits
$ 9,438,439 $ 7,852,838 $30,464,825 $20,421,607
=========== =========== =========== ===========
See notes to financial statements.
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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
-------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
ASSETS
Investments, at fair value
Other securities $14,338,975 $10,113,221 $73,875,395 $58,738,770
----------- ----------- ----------- -----------
Total investments 14,338,975 10,113,221 73,875,395 58,738,770
Dividends and interest receivable 477 488 581 543
----------- ----------- ----------- -----------
Net assets available for benefits $14,339,452 $10,113,709 $73,875,976 $58,739,313
=========== =========== =========== ===========
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH FUND
Equity Growth Fund
December 31
--------------------------
1998 1997
----------- -----------
ASSETS
Investments, at fair value
Other securities $ 0 $29,911,441
----------- -----------
Total investments 0 29,911,441
Dividends and interest receivable 0 399
----------- -----------
Net assets available for benefits $ 0 $29,911,840
=========== ===========
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
INDEX 500 FUND & SMALL-CAP VALUE FUND
Index 500 Fund Small-Cap Value Fund
December 31 * December 31 *
-------------- --------------------
1998 1998
-------------- --------------------
ASSETS
Investments, at fair value
Other securities $41,723,865 $ 4,541,222
----------- -----------
Total investments 41,723,865 4,541,222
Dividends and interest receivable 447 124
----------- -----------
Net assets available for benefits $41,724,312 $ 4,541,346
=========== ===========
* Funds were available beginning in 1998.
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
SMALL-CAP GROWTH FUND & FOREIGN FUND
Small-Cap Growth
Fund Foreign Fund
December 31 * December 31
----------------- ---------------------------
1998 1998 1997
----------------- ---------- ----------
ASSETS
Investments, at fair value
Other securities $7,453,501 $4,519,253 $6,260,312
---------- ---------- ----------
Total investments 7,453,501 4,519,253 6,260,312
Dividends and interest receivable 256 126 348
---------- ---------- ----------
Net assets available for benefits $7,453,757 $4,519,379 $6,260,660
========== ========== ==========
* Fund was available beginning in 1998.
See notes to financial statements.
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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
---------------------------------- ----------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
ASSETS
Investments, at fair value
VF Corporation Common Stock
713,263 shares in 1998
721,661 shares in 1997 $ 33,434,203 $ 33,557,236 $ 0 $ 0
VF Corporation ESOP
Preferred Stock
1,760,118 shares in 1998
1,824,820 shares in 1997 0 0 132,008,899 135,766,589
Other securities 375,351 223,111 497,609 150,968
------------ ------------ ------------ ------------
Total investments 33,809,554 33,780,347 132,506,508 135,917,557
Dividends and interest receivable 1,088 1,282 2,312 2,484
------------ ------------ ------------ ------------
TOTAL ASSETS $ 33,810,642 $ 33,781,629 $132,508,820 $135,920,041
------------ ------------ ------------ ------------
LIABILITIES
Employee Stock Ownership
Plan obligation - payable to
VF Corporation 0 0 29,023,961 35,916,035
------------ ------------ ------------ ------------
TOTAL LIABILITIES 0 0 29,023,961 35,916,035
------------ ------------ ------------ ------------
Net assets available for benefits $ 33,810,642 $ 33,781,629 $103,484,859 $100,004,006
============ ============ ============ ============
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
LOAN FUND
Loan Fund
December 31
-----------------------------
1998 1997
----------- -----------
ASSETS
Loans receivable from participants $10,779,465 $10,246,359
----------- -----------
Net assets available for benefits $10,779,465 $10,246,359
=========== ===========
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
Year Ended December 31
-------------------------------------------------------
1998 1997 1996
------------- ------------- -------------
Investment income
Dividends on VF Corporation Common Stock $ 584,321 $ 525,813 $ 469,018
Dividends on ESOP Preferred Stock 3,717,516 3,847,891 3,971,574
Interest 1,772,472 1,232,836 1,234,816
Income from mutual funds and
bank common trust funds 7,841,664 6,786,224 4,639,609
------------- ------------- -------------
13,915,973 12,392,764 10,315,017
------------- ------------- -------------
Contributions
Interest on loan repayments 800,338 710,447 637,885
Transfer from Bassett-Walker Thrift Plan 16,229,453 0 0
Participants 17,745,275 15,431,933 14,670,636
VF Corporation 6,412,929 5,665,204 5,527,985
------------- ------------- -------------
41,187,995 21,807,584 20,836,506
------------- ------------- -------------
Withdrawals (16,589,990) (14,085,336) (16,191,145)
Forfeitures that reduce
VF Corporation contributions (210,581) (218,609) (301,873)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (3,265,449) (3,865,833) (4,386,805)
Net realized and unrealized appreciation
in fair value of investments 22,062,543 62,461,957 34,081,179
------------- ------------- -------------
Net increase 57,100,491 78,492,527 44,352,879
Net assets available for benefits
at beginning of year 277,331,961 198,839,434 154,486,555
------------- ------------- -------------
Net assets available for benefits
at end of year $ 334,432,452 $ 277,331,961 $ 198,839,434
============= ============= =============
See notes to financial statements.
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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
-------------------------------------------------
1998 1997 1996
----------- ----------- -----------
Investment income
Income from mutual funds and
bank common trust funds $ 442,381 $ 399,938 $ 313,675
----------- ----------- -----------
442,381 399,938 313,675
----------- ----------- -----------
Contributions
Participants 2,062,413 1,906,211 1,537,425
----------- ----------- -----------
2,062,413 1,906,211 1,537,425
----------- ----------- -----------
Withdrawals (931,050) (653,789) (991,225)
Forfeitures that reduce
VF Corporation contributions 0 0 (9)
Fund transfers, net 11,857 (429,652) (449,011)
----------- ----------- -----------
Net increase 1,585,601 1,222,708 410,855
Net assets available for benefits
Beginning of year, as reported 7,852,838 6,630,130 7,642,943
Reclassify loan balances to separate fund 0 0 (1,423,668)
----------- ----------- -----------
Beginning of year, as adjusted 7,852,838 6,630,130 6,219,275
----------- ----------- -----------
End of year $ 9,438,439 $ 7,852,838 $ 6,630,130
=========== =========== ===========
See notes to financial statements.
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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
----------------------------------------------------
1998 1997 1996
------------ ------------ ------------
Investment income
Interest $ 1,772,472 $ 1,232,836 $ 1,234,816
Income from mutual funds and
bank common trust funds 171,077 120,111 42,437
------------ ------------ ------------
1,943,549 1,352,947 1,277,253
------------ ------------ ------------
Contributions
Transfer from Bassett-Walker Thrift Plan 16,229,453 0 0
Participants 1,278,044 1,889,960 2,109,713
------------ ------------ ------------
17,507,497 1,889,960 2,109,713
------------ ------------ ------------
Withdrawals (2,950,225) (1,785,929) (2,565,214)
Forfeitures that reduce
VF Corporation contributions (1,892) 0 (11)
Net realized and unrealized appreciation
depreciation) in fair value of investments 145,320 43,040 (109,871)
Fund transfers, net (6,601,031) (627,176) 30,008
------------ ------------ ------------
Net increase 10,043,218 872,842 741,878
Net assets available for benefits
Beginning of year, as reported 20,421,607 19,548,765 20,437,850
Reclassify loan balances to separate fund 0 0 (1,630,963)
------------ ------------ ------------
Beginning of year, as adjusted 20,421,607 19,548,765 18,806,887
------------ ------------ ------------
End of year $ 30,464,825 $ 20,421,607 $ 19,548,765
============ ============ ============
See notes to financial statements.
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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
----------------------------------------------------
1998 1997 1996
------------ ------------ ------------
Investment income
Income from mutual funds and
bank common trust funds $ 1,435,730 $ 784,198 $ 721,016
------------ ------------ ------------
1,435,730 784,198 721,016
------------ ------------ ------------
Contributions
Participants 1,295,944 918,520 703,667
------------ ------------ ------------
1,295,944 918,520 703,667
------------ ------------ ------------
Withdrawals (571,338) (444,470) (317,576)
Forfeitures that reduce
VF Corporation contributions (412) 0 (238)
Net realized and unrealized appreciation
in fair value of investments 640,289 942,971 70,842
Fund transfers, net 1,425,480 866,323 1,936,006
------------ ------------ ------------
Net increase 4,225,693 3,067,542 3,113,717
Net assets available for benefits
Beginning of year, as reported 10,113,709 7,046,167 3,985,747
Reclassify loan balances to separate fund 0 0 (53,297)
------------ ------------ ------------
Beginning of year, as adjusted 10,113,709 7,046,167 3,932,450
------------ ------------ ------------
End of year $ 14,339,402 $ 10,113,709 $ 7,046,167
============ ============ ============
See notes to financial statements.
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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
----------------------------------------------------
1998 1997 1996
------------ ------------ ------------
Investment income
Income from mutual funds and
bank common trust funds $ 3,918,872 $ 2,717,905 $ 2,148,023
------------ ------------ ------------
3,918,872 2,717,905 2,148,023
------------ ------------ ------------
Contributions
Participants 4,944,213 4,556,161 4,131,053
------------ ------------ ------------
4,944,213 4,556,161 4,131,053
------------ ------------ ------------
Withdrawals (3,154,035) (3,171,577) (3,484,495)
Forfeitures that reduce
VF Corporation contributions (1,428) 0 (391)
Net realized and unrealized appreciation
in fair value of investments 12,391,320 10,862,416 5,037,526
Fund transfers, net (2,962,279) (563,471) 1,525,815
------------ ------------ ------------
Net increase 15,136,663 14,401,434 9,357,531
Net assets available for benefits
Beginning of year, as reported 58,739,313 44,337,879 37,437,759
Reclassify loan balances to separate fund 0 0 (2,457,411)
------------ ------------ ------------
Beginning of year, as adjusted 58,739,313 44,337,879 34,980,348
------------ ------------ ------------
End of year $ 73,875,976 $ 58,739,313 $ 44,337,879
============ ============ ============
See notes to financial statements.
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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
----------------------------------------------------
1998 1997 1996
------------ ------------ ------------
Investment income
Income from mutual funds and
bank common trust funds $ 0 $ 1,952,775 $ 1,130,443
------------ ------------ ------------
0 1,952,775 1,130,443
------------ ------------ ------------
Contributions
Participants 0 2,779,070 3,389,402
------------ ------------ ------------
0 2,779,070 3,389,402
------------ ------------ ------------
Withdrawals 0 (1,866,067) (2,420,165)
Forfeitures that reduce
VF Corporation contributions 0 0 (236)
Net realized and unrealized appreciation
in fair value of investments 84,658 4,282,170 1,604,220
Fund transfers, net (29,996,498) (1,400,069) (4,267,963)
------------ ------------ ------------
Net increase (decrease) (29,911,840) 5,747,879 (564,299)
Net assets available for benefits
Beginning of year, as reported 29,911,840 24,163,961 25,722,536
Reclassify loan balances to separate fund 0 0 (994,276)
------------ ------------ ------------
Beginning of year, as adjusted 29,911,840 24,163,961 24,728,260
------------ ------------ ------------
End of year $ 0 $ 29,911,840 $ 24,163,961
============ ============ ============
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
INDEX 500 FUND
Year Ended
December 31
------------
1998
------------
Investment income
Income from mutual funds and
bank common trust funds $ 827,641
------------
827,641
------------
Contributions
Participants 3,309,968
------------
3,309,968
------------
Withdrawals (1,734,522)
Forfeitures that reduce
VF Corporation contributions (547)
Net realized and unrealized appreciation
in fair value of investments 7,901,759
Fund transfers, net 31,420,013
------------
Net increase 41,724,312
Net assets available for benefits
Beginning of year 0
------------
End of year $ 41,724,312
============
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND
INFORMATION (CONTINUED)
SMALL-CAP VALUE FUND
Year Ended
December 31
-----------
1998
-----------
Investment income
Income from mutual funds and
bank common trust funds $ 528,244
-----------
528,244
-----------
Contributions
Participants 491,164
-----------
491,164
-----------
Withdrawals (81,449)
Forfeitures that reduce
VF Corporation contributions (550)
Net realized and unrealized (depreciation)
in fair value of investments (103,408)
Fund transfers, net 3,707,345
-----------
Net increase 4,541,346
Net assets available for benefits
Beginning of year 0
-----------
End of year $ 4,541,346
===========
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH
FUND INFORMATION
(CONTINUED)
SMALL-CAP GROWTH FUND
Year Ended
December 31
-----------
1998
-----------
Investment income
Income from mutual funds and
bank common trust funds $ 10,571
-----------
10,571
-----------
Contributions
Participants 813,829
-----------
813,829
-----------
Withdrawals (137,185)
Forfeitures that reduce
VF Corporation contributions (542)
Net realized and unrealized appreciation
in fair value of investments 252,409
Fund transfers, net 6,514,675
-----------
Net increase 7,453,757
Net assets available for benefits
Beginning of year 0
-----------
End of year $ 7,453,757
===========
See notes to financial statements.
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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
-------------------------------------------------
1998 1997 1996
----------- ----------- -----------
Investment income
Income from mutual funds and
bank common trust funds $ 469,011 $ 748,260 $ 257,147
----------- ----------- -----------
469,011 748,260 257,147
----------- ----------- -----------
Contributions
Participants 597,954 788,136 504,049
----------- ----------- -----------
597,954 788,136 504,049
----------- ----------- -----------
Withdrawals (192,655) (327,669) (217,661)
Forfeitures that reduce
VF Corporation contributions (320) 0 (234)
Net realized and unrealized appreciation
(depreciation) in fair value of investments (730,120) (347,015) 428,766
Fund transfers, net (1,885,151) 69,459 1,987,203
----------- ----------- -----------
Net increase (decrease) (1,741,281) 931,171 2,959,270
Net assets available for benefits
Beginning of year, as reported 6,260,660 5,329,489 2,335,647
Reclassify loan balances to separate fund 0 0 34,572
----------- ----------- -----------
Beginning of year, as adjusted 6,260,660 5,329,489 2,370,219
----------- ----------- -----------
End of year $ 4,519,379 $ 6,260,660 $ 5,329,489
=========== =========== ===========
See notes to financial statements.
23
24
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
----------------------------------------------------
1998 1997 1996
------------ ------------ ------------
Investment income
Dividends on VF Corporation
Common Stock $ 584,321 $ 525,813 $ 469,018
Income from mutual funds and
bank common trust funds 11,366 37,029 5,963
------------ ------------ ------------
595,687 562,842 474,981
------------ ------------ ------------
Contributions
Participants 2,951,696 2,593,875 2,295,327
------------ ------------ ------------
2,951,696 2,593,875 2,295,327
------------ ------------ ------------
Withdrawals (1,768,755) (1,674,899) (1,888,739)
Forfeitures that reduce
VF Corporation contributions (2,363) 0 (143)
Net realized and unrealized appreciation
in fair value of investments 358,149 8,601,707 4,701,766
Fund transfers, net (2,105,401) 1,410,680 (1,573,213)
------------ ------------ ------------
Net increase 29,013 11,494,205 4,009,979
Net assets available for benefits
Beginning of year, as reported 33,781,629 22,287,424 20,458,033
------------ ------------ ------------
Reclassify loan balances to separate fund 0 0 (2,180,588)
------------ ------------ ------------
Beginning of year, as adjusted 33,781,629 22,287,424 18,277,445
------------ ------------ ------------
End of year $ 33,810,642 $ 33,781,629 $ 22,287,424
============ ============ ============
See notes to financial statements.
24
25
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
-------------------------------------------------------
1998 1997 1996
------------- ------------- -------------
Investment income
Dividends on ESOP Preferred Stock $ 3,717,516 $ 3,847,891 $ 3,971,574
Income from mutual funds and
bank common trust funds 26,771 26,008 20,905
------------- ------------- -------------
3,744,287 3,868,944 3,992,479
------------- ------------- -------------
Contributions
VF Corporation 6,412,929 5,665,204 5,527,985
------------- ------------- -------------
6,412,929 5,665,204 5,527,985
------------- ------------- -------------
Withdrawals (4,330,554) (3,648,224) (3,526,117)
Forfeitures that reduce
VF Corporation contributions (202,527) (218,609) (300,611)
Interest paid to VF Corporation on Employee Stock
Ownership Plan obligation (3,265,449) (3,865,833) (4,386,805)
Net realized and unrealized appreciation
in fair value of investments 1,122,167 38,076,668 22,347,930
------------- ------------- -------------
Net increase 3,480,853 39,883,105 23,654,861
Net assets available for benefits
Beginning of year 100,004,006 60,120,901 36,466,040
------------- ------------- -------------
End of year $ 103,484,859 $ 100,004,006 $ 60,120,901
============= ============= =============
See notes to financial statements.
25
26
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
----------------------------------------------------
1998 1997 1996
------------ ------------ ------------
Contributions
Interest on loan repayments $ 800,338 $ 710,447 $ 637,885
------------ ------------ ------------
800,338 710,447 637,885
------------ ------------ ------------
Withdrawals (738,222) (512,712) (779,953)
Fund transfers, net 470,990 673,906 811,155
------------ ------------ ------------
Net increase 533,106 871,641 669,087
------------ ------------ ------------
Net assets available for benefits
Beginning of year, as reported 10,246,359 9,374,718 0
Reclassify loan balances to separate fund 0 0 8,705,631
------------ ------------ ------------
Beginning of year, as adjusted 10,246,359 9,374,718 8,705,631
------------ ------------ ------------
End of year $ 10,779,465 $ 10,246,359 $ 9,374,718
============ ============ ============
See notes to financial statements.
26
27
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, 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, 1,099,474 shares in 1998 and 973,860 shares
in 1997 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
$9.1 million in 1999 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 trustee also manages
the Fixed Income Fund and Scout Prime Fund. 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) Small-Cap Value Fund: monies are invested in U.S. common
stocks of small companies whose price is undervalued.
(g) Small-Cap Growth Fund: monies invested in small and medium
size companies with undervalued assets or favorable growth
prospects.
27
28
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
(h) Foreign Fund: Monies are invested in stocks and debt obligations of
companies and governments outside the United States.
(i) 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.
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 of 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 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 1,676 loans
outstanding at December 31, 1998.
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
-------------------------------------
1998 1997 1996
-------------------------------------
Money Market Fund 3,232 2,949 2,862
Fixed Income Fund 3,516 3,393 3,731
Balanced Fund 2,035 1,687 1,393
Equity Growth & Income Fund 5,712 5,446 5,420
Index 500 Fund 4,369 - -
Small-Cap Value Fund 921 - -
Small-Cap Growth Fund 1,245 - -
Foreign Fund 1,281 1,308 1,032
VF Corporation Common Stock Fund 4,598 4,377 4,146
Employee Stock Ownership Plan 7,557 7,075 7,077
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.
28
29
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED 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. 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 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.
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. 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.
29
30
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
Fair Value for the Year Ended December 31 at December 31
------------------------------------------------------------- --------------------
1998 1997 1996 1998
------------------ ------------------- ------------------ --------------------
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common Stock $(1,058,268) $ 8,278,471 $ 4,168,463 $33,434,203
ESOP Preferred Stock 1,056,071 37,226,323 22,201,877 132,008,899
Mutual funds and
bank common trust funds 11,120,459 14,189,381 6,121,697 155,111,146
------------------ ------------------- ------------------ --------------------
11,118,262 59,694,175 32,492,037 320,554,248
Fair value as determined by
Plan trustee:
United States government
obligations 0 0 0 23,642,357
Commercial notes 139,216 41,354 (109,067) 852,848
Mutual funds and
bank common trust funds 0 0 0 7,215,057
------------------ ------------------- ------------------ --------------------
139,216 41,354 (109,067) 31,710,262
------------------ ------------------- ------------------ --------------------
$11,257,478 $59,735,529 $32,382,970 $352,264,510
================== =================== ================== ====================
Fair Value
at December 31
-----------------------------------------
1997 1996
-------------------- -------------------
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common Stock $33,557,236 $ 22,046,715
ESOP Preferred Stock 135,766,589 101,601,810
Mutual funds and
bank common trust funds 112,283,636 86,921,008
-------------------- -------------------
281,607,461 210,569,533
Fair value as determined by
Plan trustee:
United States government
obligations 17,022,422 16,991,039
Commercial notes 501,345 812,427
Mutual funds and
bank common trust funds 3,559,948 2,343,181
-------------------- -------------------
21,083,715 20,146,647
-------------------- -------------------
$302,691,176 $230,716,180
==================== ===================
Unrealized appreciation in fair value of investments at December 31, 1998, 1997
and 1996 was $137,486,617, $129,045,244 and $70,620,796, respectively.
30
31
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
1998 1997 1996
------------ ------------ ------------
Aggregate proceeds $160,165,097 $ 62,783,730 $ 62,417,958
Aggregate cost 149,360,032 60,507,302 60,719,749
------------ ------------ ------------
Net realized gain $ 10,805,065 $ 2,726,428 $ 1,698,209
============ ============ ============
Of the net realized gain, $1,482,513, $1,173,581 and $679,356 related to gains
recognized on the sale of VF Common Stock and the redemption of VF Preferred
Stock for the years ended 1998, 1997 and 1996, respectively.
The fair value of individual investments that represent 5% or more of the Plan's
net assets at December 31, 1998 and 1997 are as follows:
1998 1997
------------ ------------
ESOP Preferred Stock $132,008,899 $135,766,589
Fidelity Growth & Income Fund 73,627,154 58,657,037
Fidelity Magellan Fund 0 29,871,782
VF Corporation Common Stock 33,434,203 33,557,236
Vanguard Institutional Index Fund 41,538,627 0
31
32
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTE TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Investments held at December 31, 1998:
NUMBER OF SHARES
Name of Issuer and Title of Issue OR PRINCIPAL AMOUNT FAIR VALUE COST
- --------------------------------- ------------------- ------------ ------------
Securities of participating employer:
VF Corporation Common Stock 713,263 $ 33,434,203 $ 16,524,159
VF Corporation 6.75% Series B ESOP
Convertible Preferred Stock 1,760,119 132,008,899 54,343,663
------------ ------------
165,443,102 70,867,822
------------ ------------
United States Government Obligations:
Small Business Administration Loans:
(Rates of 5.15% to 8.83%,
maturities of 02/12/99 to 08/11/18) 22,028,739 21,880,587
F.M.H.A. loans (Rates of 6.475% to 7.825%
maturities 01/01/01 02/20/14) 1,613,618 1,613,618
------------ ------------
23,642,357 23,494,205
------------ ------------
Other Securities:
Mutual funds and bank common trust funds:
Vanguard Money Market Fund 9,315,347 9,315,347 9,315,347
Fidelity Puritan Fund 710,609 14,261,917 12,676,893
Fidelity Growth & Income Fund 1,606,177 73,627,154 39,862,744
Vanguard Institutional Index Fund 368,087 41,538,627 33,684,663
Longleaf Partners Small Cap Fund 205,087 4,501,670 4,613,388
Baron Asset Fund 146,332 7,395,623 6,999,025
Templeton Foreign Fund 532,873 4,470,808 5,216,293
UMB Bank Fund: Scout Prime - R 7,215,057 7,215,057 7,215,057
Oglebay Norton Company (Due 06/15/01) $ 500,000 495,900 495,900
Private Export Funding Corp. (Due 04/30/04) $ 137,500 149,696 134,556
Smith Enron Cogeneration LP (Due 12/15/06) $ 202,000 207,252 202,000
------------ ------------
$352,264,510 $214,777,893
============ ============
32
33
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED 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:
1998 1997
------------ ------------
Net assets available for benefits per the financial statements $334,432,452 277,331,961
Amounts allocated to withdrawing participants 3,538,200 1,567,639
------------ ------------
Net assets available for benefits per Form 5500 $330,894,252 $275,764,322
============ ============
The following is a reconciliation of withdrawals paid to participants per the
financial statements to Form 5500:
1998
-----------
Withdrawals paid to participants and forfeitures
per the financial statements $16,800,571
Add amounts allocated to withdrawing participants at December 31, 1998 3,538,200
Less amounts allocated to withdrawing participants at December 31, 1997 (1,567,639)
Withdrawals paid to participants and forfeitures per Form 5500 $18,771,132
===========
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.
33