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, 2001
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)
1
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
TABLE OF CONTENTS
Page No.
Report of Independent Accountants 4
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000 5
Statements of Changes in Net Assets Available for Benefits -
For the Years Ended December 31, 2001, 2000, and 1999 6
Notes to Financial Statements 7
Supplemental Schedules*:
Schedule H - Line 4i - Schedule of Assets (Held at end of year) 15
* - Other schedules required by Section 2520.103-10 of the
Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because they are not
applicable.
Exhibit 23.1 - Consent of Independent Accountants 16
2
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/ Frank C. Pickard III
------------------------------
Frank C. Pickard III
Vice President, Treasurer
VF Corporation
Date: June 28, 2002
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
VF Corporation Tax-Advantaged Savings Plan for Salaried Employees
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees (the
"Plan") at December 31, 2001 and December 31, 2000, and the changes in net
assets available for benefits for the three years in the period ended December
31, 2001 in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of
the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule 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
June 14, 2002
4
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
ASSETS 2001 2000
------ ------------ ------------
Investments, at fair value
VF Corporation common stock -
633,893 shares in 2001
691,764 shares in 2000 $ 24,731,732 $ 25,069,530
VF Corporation ESOP preferred stock -
1,477,929 shares in 2001
1,570,301 shares in 2000 92,252,328 91,052,333
Other securities 211,909,046 225,061,590
------------ ------------
Total investments 328,893,106 341,183,453
Loans receivable from participants 13,300,763 12,235,738
------------ ------------
TOTAL ASSETS 342,193,869 353,419,191
============ ============
LIABILITIES
Employee Stock Ownership
Plan obligation payable to VF Corporation 2,872,310 12,312,041
------------ ------------
TOTAL LIABILITIES 2,872,310 12,312,041
------------ ------------
Net assets available for benefits $339,321,559 $341,107,150
============ ============
See notes to financial statements.
5
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31
2001 2000 1999
------------- ------------- -------------
Investment income
Dividends on VF Corporation ESOP
Preferred Stock $ 3,147,511 $ 3,335,572 $ 3,548,108
Interest 0 9,214 766,141
Dividends on VF Corporation common stock 623,262 613,165 568,777
Income from mutual funds and bank common
Trust funds 3,451,137 13,047,168 8,183,052
------------- ------------- -------------
7,221,910 17,005,119 13,066,078
------------- ------------- -------------
Contributions
Interest on loan repayments 1,005,453 907,214 819,721
Transfer from merged plans (Note A) 0 22,460,258 0
Participants 21,305,026 21,275,592 18,853,409
VF Corporation 7,086,364 7,172,768 6,907,055
------------- ------------- -------------
29,396,843 51,815,832 26,580,185
------------- ------------- -------------
Benefits paid to participants (24,965,767) (26,745,185) (26,465,797)
Forfeitures that reduce
VF Corporation contributions (232,386) (287,053) (194,398)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (854,340) (1,744,899) (2,553,867)
Net realized and unrealized appreciation
(depreciation) in fair value of investments (12,351,851) (2,907,045) (40,894,272)
------------- ------------- -------------
Net increase (decrease) (1,785,591) 37,136,769 (30,462,071)
Net assets available for benefits
at beginning of year 341,107,150 303,970,381 334,432,452
------------- ------------- -------------
Net assets available for benefits
at end of year $ 339,321,559 $ 341,107,150 $ 303,970,381
============= ============= =============
See notes to financial statements.
6
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 may elect to contribute between 2%
and 15% of their compensation to the Plan (highly compensated employees are
limited to 10%). 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 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, 1,420,338 shares in 2001 and 1,312,345 shares in 2000
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 $3.0
million in 2002. The loan will be repaid in 2002.
7
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
Employee contributions are invested at the direction of the employee in one or
more of the funds administered by the Plan's trustees. All Plan assets are
trusteed by Fidelity Management Trust Company (Fidelity) with the exception of
the Fixed Income Fund which is trusteed by UMB Bank, n.a. The investment
programs and investment objectives of the Plan funds are as follows:
(a) Money Market Fund: Monies are invested in a money market fund.
(b) Fixed Income Fund: Monies are invested in investments that
provide a fixed rate of return.
(c) Balanced Fund: Monies are invested in investments to obtain as
much income as possible, consistent with the preservation and
conservation of capital.
(d) Equity Growth & Income Fund: Monies are invested in
investments that are currently paying dividends and/or offer
prospects for growth of capital and future income, with
emphasis on capital appreciation.
(e) Index 500 Fund: Monies are invested in the 500 stocks that
make up the S&P 500 Stock Price Index.
(f) Dividend Growth Fund: Monies are invested in stocks of
companies that have the potential to increase the amount of
their dividends or begin paying them if none are being paid
now.
(g) Small-Cap Value Fund: Monies are invested in U.S. common
stocks of small companies whose price is undervalued.
(h) Small-Cap Growth Fund: Monies invested in small and medium
size companies with undervalued assets or favorable growth
prospects.
(i) Foreign Fund: Monies are invested in stocks and debt
obligations of companies and governments outside the United
States.
(j) VF Corporation Common Stock Fund: Monies are invested in
common stock of the Corporation purchased at prevailing prices
on the New York Stock Exchange on the date of purchase.
Employees can direct no more than 50% of their contributions
to the VF Corporation Common Stock Fund.
(k) Mutual Fund Window (Self Directed Option): The option allows
participants to select from over 200 mutual funds offered
through Fidelity Investments Funds Net Program and additional
Fidelity Fund options.
8
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
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 transfers of applicable participant balances from the Bestform Savings Plan,
Todd Uniform and Horace Small Savings Plans, which were merged into the Plan in
2000, have 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 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 3,152 loans outstanding at December 31, 2001.
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.
9
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. 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. Purchases and sales of securities, including gains and losses
thereon, are recorded as of the trade date. Dividends are recorded on the
ex-dividend date.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or losses and unrealized
appreciation or depreciation on those investments. Realized gains or losses are
calculated on an average cost basis.
Administrative expenses consisting primarily of fees for legal, accounting and
other services are paid by the Corporation in accordance with the Plan.
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.
Risks and Uncertainties: The Plan provides for various mutual fund investment
options in stocks, bonds and fixed income securities. Investments are exposed to
various risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially
affect participants' account balances and the amounts reported in the statements
of net assets available for plan benefits and the statements of changes in net
assets available for plan benefits.
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 VF Corporation
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.
10
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS
Net realized and unrealized appreciation (depreciation) in fair value of
investments included in Plan equity includes the following:
Net Realized and Unrealized
Appreciation (Depreciation) in Fair Value
Fair Value for the Year Ended December 31 At December 31
----------------------------------------------------- --------------------------------
2001 2000 1999 2001 2000
------------- ------------- ------------- ------------- -------------
Fair value as determined by
quoted market or stated
redemption price: $ 2,452,027 $ 5,219,011 $ (10,872,959) $ 24,731,732 $ 25,069,530
VF Corporation common stock
ESOP Preferred Stock 6,839,407 15,139,218 (45,661,526) 92,252,328 91,052,333
Mutual funds and
bank common trust funds (23,634,971) (25,209,654) 15,225,411 177,870,890 194,880,922
------------- ------------- ------------- ------------- -------------
(14,343,537) (4,851,425) (41,309,074) 294,854,950 311,002,785
------------- ------------- ------------- ------------- -------------
Fair value as determined by
Plan trustee:
United States government
obligations 0 0 (148,152) 0 0
Commercial notes 0 0 (20,392) 0 0
Mutual funds and
bank common trust funds 1,991,686 1,944,380 583,346 34,038,156 30,180,668
------------- ------------- ------------- ------------- -------------
1,991,686 1,944,380 414,802 34,038,156 30,180,668
------------- ------------- ------------- ------------- -------------
$ (12,351,851) $ (2,907,045) $ (40,894,272) $ 328,893,106 $ 341,183,453
============= ============= ============= ============= =============
11
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
The fair value of individual investments that represent 5% or more of the Plan's
net assets at December 31, 2001 and 2000 are as follows:
2001 2000
----------- -----------
ESOP Preferred Stock $92,252,328 $91,052,333
(1,477,929 and 1,570,301 shares)
Fidelity Growth & Income Fund 52,881,518 62,463,611
(1,414,701 and 1,483,696 shares)
VF Corporation Common Stock 24,728,178 25,069,530
(633,893 and 691,764 shares)
Fidelity US Equity Index Commingled Pool 32,506,489 40,258,148
(963,155 shares and 1,050,852 shares)
ProCapp Fixed Income Fund 34,038,156 30,180,668
(2,931,796 and 2,771,411 shares)
Fidelity Retirement Money Market Portfolio 17,963,369 15,294,844
(17,963,369 shares and 15,294,844 shares)
12
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE E -- NONPARTICIPANT DIRECTED ACCOUNTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant directed investments is as follows:
Employee Stock Ownership Plan
December 31
2001 2000
----------- -----------
ASSETS
VF Corporation ESOP
Preferred Stock
1,477,929 shares in 2001
1,570,301 shares in 2000 $92,252,328 $91,052,333
Other securities 373,368 359,709
----------- -----------
Total investments 92,625,696 91,412,042
----------- -----------
TOTAL ASSETS 92,625,696 91,412,042
----------- -----------
LIABILITIES
Employee Stock Ownership
Plan obligation payable to VF
Corporation 2,872,310 12,312,041
----------- -----------
TOTAL LIABILITIES 2,872,310 12,312,041
----------- -----------
Net assets available for benefits $89,753,386 $79,100,001
=========== ===========
13
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
Notes to Financial Statements
NOTE E -- NONPARTICIPANT DIRECTED ACCOUNTS (continued)
Changes in Net Assets Year Ended December 31
2001 2000 1999
------------- ------------- -------------
Investment income
Dividends on ESOP Preferred Stock $ 3,147,511 $ 3,335,572 $ 3,548,108
Income from mutual funds and
bank common trust funds 19,947 37,564 17,013
------------- ------------- -------------
3,167,458 3,373,136 3,565,121
Contributions
VF Corporation* 7,121,014 7,172,768 6,907,055
------------- ------------- -------------
7,121,014 7,172,768 6,907,055
------------- ------------- -------------
Benefits paid to participants (5,412,637) (3,950,527) (6,246,284)
Forfeitures that reduce
VF Corporation contributions (207,517) (201,027) (184,026)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (854,340) (1,744,899) (2,553,867)
Net realized and unrealized appreciation
(depreciation)in fair value of investments 6,839,407 15,139,218 (45,661,526)
------------- ------------- -------------
Net increase (decrease) 10,653,385 19,788,669 (44,173,527)
Net assets available for benefits
Beginning of year 79,100,001 59,311,332 103,484,859
------------- ------------- -------------
End of year $ 89,753,386 $ 79,100,001 $ 59,311,332
============= ============= =============
*Effective April 2002, VF matching contributions are being made in cash.
14
VF Corporation Tax-Advantaged Savings Plan
for Salaried Employees
Line 27(a) - Schedule of Assets (Held at End of Year)
At December 31, 2001
Identity of issue, borrower, Number of Current
Lessor, or similar party Shares Cost Value
--------------------------- ---------- ---------- ----------
*Fidelity Puritan Fund 601,300 $10,934,609 $10,624,978
*Fidelity Growth & Income Fund 1,414,701 45,226,288 52,881,518
*Fidelity Diversified International Fund 267,054 5,706,504 5,095,385
*Fidelity Dividend Growth Fund 92,139 2,679,074 2,610,307
*Fidelity Retirement Money Market Portfolio 17,963,369 17,963,369 17,963,369
*Fidelity U.S. Equity Index Commingled Pool 963,155 36,389,162 32,506,489
Baron Asset Fund 153,067 7,667,378 6,805,359
Longleaf Small Cap Fund 196,879 4,376,196 4,268,338
*ProCapp Fixed Income Fund 2,931,796 30,477,546 34,038,156
*VF Corporation Common Stock 633,893 15,993,791 24,731,732
*VF Corporation ESOP Preferred Stock 1,477,929 60,404,262 92,252,328
*Mutual Fund Window (Self Directed Option) N/A 57,199,118 45,115,147
Loans receivable from participants
(with interest rates from 7% to 9%) N/A 13,300,763 13,300,763
------------ ------------
$308,318,060 $342,193,869
============ ============
* represents a party-in-trust
15