-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nl1y7tOnhAEt7/+vBt03CzZcFUz6VERuhN+ZLlDrpRj8wjbgjFh0szkxyT9vKQgb 6fQH8g51BNY0rjkPqL2yZg== 0001005477-96-000167.txt : 19960701 0001005477-96-000167.hdr.sgml : 19960701 ACCESSION NUMBER: 0001005477-96-000167 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHILLIPS VAN HEUSEN CORP /DE/ CENTRAL INDEX KEY: 0000078239 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 131166910 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07572 FILM NUMBER: 96587905 BUSINESS ADDRESS: STREET 1: 1290 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10104 BUSINESS PHONE: 2125415200 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One): |X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]. For the fiscal year ended December 31, 1995 OR |_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. For the transition period from __________ to __________ Commission file number 1-724 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates and Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Phillips-Van Heusen Corporation, 1290 Avenue of the Americas, New York, New York 10104 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. PHILLIPS-VAN HEUSEN CORPORATION ASSOCIATES INVESTMENT PLANS Date: June 28, 1996 By /s/ PAMELA N. HOOTKIN --------------------- Pamela N. Hootkin, Member of Administrative Committee Financial Statements and Supplemental Schedules Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Years ended December 31, 1995 and 1994 with Report of Independent Auditors Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Financial Statements and Supplemental Schedules Years ended December 31, 1995 and 1994 Contents Report of Independent Auditors............................................ 1 Statements of Net Assets Available for Plan Benefits...................... 3 Statements of Changes in Net Assets Available for Plan Benefits........... 4 Notes to Financial Statements ............................................ 5 Schedule of AIP Master Trust Assets Held for Investment................... 14 Reportable Transactions................................................... 15 [Letterhead of Ernst & Young] Report of Independent Auditors Administrative Committee of the Plan Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates New York, New York We have audited the accompanying statements of net assets available for plan benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates as of December 31, 1995 and 1994, and the related statements of changes in net assets available for plan benefits for the years then ended. 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 plan benefits of the Plan as of December 31, 1995 and 1994, and the changes in its net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. 1 Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental Schedule of AIP Master Trust Assets Held for Investment as of December 31, 1995 and Reportable Transactions for the year then ended, are presented for the purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Ernst & Young LLP New York, New York June 21, 1996 2 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Statement of Net Assets Available for Plan Benefits December 31, 1995 1994 ------------------------ Assets Investments, at fair value (Notes A and F): Shares of registered investment companies: Equity Fund $ 732,247 $ -- Bond Fund 225,553 -- Balanced Fund 538,901 -- International Fund 124,544 -- Common Stock--Employer Company 3,699,303 6,276,190 Common trust fund* 3,158,299 3,385,183 Participant loans receivable 58,552 -- ------------------------ Total investments 8,537,399 9,661,373 Receivables: Employer's contribution -- 67,279 Participants' contributions -- 140,035 ------------------------ Total receivables -- 207,314 Liabilities -- -- ------------------------ Net assets available for plan benefits $8,537,399 $9,868,687 ======================== * Consists of the Money Market Fund in 1995 and the General Investment Fund and Stock Index Fund in 1994. See notes to financial statements. 3 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1995 1994 --------------------------- Additions Net transfer from the PVH Associates Investment Plan for Salaried Associates $ 2,410,664 $ 2,481,672 Contributions: Employer Company, net of forfeitures 527,735 766,509 Participants 1,092,799 2,130,469 --------------------------- 1,620,534 2,896,978 Interest and investment income 402,426 181,219 --------------------------- 4,433,624 5,559,869 Deductions Payments to participants 3,712,868 1,641,922 --------------------------- 720,756 3,917,947 Net realized and unrealized depreciation of investments (Note F) (2,052,044) (8,257,421) --------------------------- Net decrease (1,331,288) (4,339,474) Net assets available for plan benefits at beginning of year 9,868,687 14,208,161 --------------------------- Net assets available for plan benefits at end of year $ 8,537,399 $ 9,868,687 =========================== See notes to financial statements. 4 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements December 31, 1995 A. Description of the Plan The following description of the Phillips-Van Heusen Corporation (the "Company") Associates Investment Plan for Hourly Associates (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. Plan Amendments On July 1, 1995, the Plan was amended to include new investment elections and to dissolve the Stock Index Fund into the remaining funds. The amendment also increased the participant contribution percentage limit and added a loan feature. General The Plan is a defined contribution plan covering hourly paid production and retail field employees of the Company who have at least one year of service (1,000 hours in a year) and are age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions Each year, participants may contribute up to 15% of pretax annual compensation, as defined by the Plan. The Company contributes 50% of the first 6% of base compensation that a participant contributes to the Plan. Participant Accounts Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) Plan earnings. Forfeited balances of terminated participants' nonvested accounts are used to reduce future Company contributions. One hundred percent of the Company contributions are automatically invested in the common stock of the Company. Participants age fifty-five or older may direct the Company contribution into any of the Plan's investment options. 5 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) A. Description of the Plan (continued) Vesting Amounts attributable to Company contributions become vested on the participant's sixty-fifth birthday or if the participant's employment by the Company terminates by reason of the participant's death or permanent disability or the participant has completed five years of service with the Company. Investment Options Upon enrollment in the Plan, a participant may direct employee contributions in 5% increments into any of the six investment options. A participant may contribute a maximum of 25% of employee contributions into the Phillips-Van Heusen Corporation Common Stock Fund. Phillips-Van Heusen Corporation Common Stock Fund - Funds are invested by the trustee in common shares of the Company. Common shares of the Company are purchased by the trustee in the open market. Money Market Fund - Funds are invested by the trustee in short-term obligations and money market instruments. Equity Fund - Funds are invested in shares of a registered investment company that invests primarily in common stocks. (Fidelity Growth & Income Portfolio) Bond Fund - Funds are invested in shares of a registered investment company that invests in corporate bonds and U.S. government securities. (Fidelity Intermediate Bond Fund) Balanced Fund - Funds are invested in shares of a registered investment company that invests in common stocks, preferred stocks, and bonds. (Fidelity Puritan Fund) International Fund - Funds are invested in shares of a registered investment company that invests in common stocks and bonds of companies and governments outside the United States. (Templeton Foreign Fund) 6 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) A. Description of the Plan (continued) Participant Loans Receivable Effective July 1, 1995, participants may borrow from the Plan, with certain restrictions, using their vested account balance as collateral. The minimum loan amount is $1,000 and the maximum loan amount is the lesser of (i) $50,000 reduced by the participant's highest outstanding loan balance during the previous twelve months or (ii) 50% of the vested value of the participant's account. Interest is fixed for the term of the loan at the prime rate as of the first business day of the month of application as published in the Wall Street Journal, plus 1%. Loan repayments are made through payroll deductions which may be specified for a term of 1 to 5 years or up to 15 years for the purchase of a primary residence. Payment of Benefits Participants entitled to final distributions generally will receive payment in the form of a lump sum amount equal to the value of their vested account. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. B. Significant Accounting Policies The accounting records of the Plan are maintained on the accrual basis. In accordance with the Rules and Regulations of the Department of Labor, investments are included at market value as determined by quoted market prices or at fair value as determined by Chase Manhattan Bank for the applicable Chase investment funds in the accompanying financial statements. Purchases and sales of securities are reflected on a trade date basis. Substantially all administrative expenses are paid by the Company. 7 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) B. Significant Accounting Policies (continued) All assets of the Plan are held by the trustee, Chase Manhattan Bank, in the Company's Associates Investment Plan Master Trust ("AIP Master Trust") and are segregated from the assets of the Company. The Plan shares in AIP Master Trust interest and investment income based upon its participants' shares of AIP Master Trust net assets available for plan benefits. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from the estimates. C. Transactions with Parties-in-Interest During the years ended December 31, 1995 and 1994, the AIP Master Trust purchased 226,108 and 183,321 shares, respectively, of the Company's common stock and received $298,851 and $229,091, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 443,656 and 66,935 shares of the Company's common stock during the years ended December 31, 1995 and 1994, respectively. 8 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) D. Changes in AIP Master Trust Net Assets by Fund Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 1995 were as follows:
Phillips-Van Heusen Corp. Money Stock Common Stock Market Index Bond Balanced Fund Fund* Fund Fund Fund -------------------------------------------------------------------------------- Net assets at beginning of year $ 24,889,276 $ 7,181,636 $ 7,603,808 Interest and investment income 258,386 509,408 116,968 $ 41,927 $ 97,653 Contributions received: Employer Company, net of forfeitures 2,349,930 180,822 244,807 (259) 857 Employees 2,311,251 956,599 537,338 235,349 583,942 Net realized and unrealized (depreciation)/appreciation (8,305,792) - 1,408,254 18,787 152,961 Loans to participants, net of repayments (284,434) (139,857) - (28,241) (62,562) Payments to participants (3,407,543) (1,587,240) (645,205) (6,938) (66,120) Transfers (to) from other accounts (3,185,862) 1,396,904 (9,265,970) 1,397,364 3,596,209 -------------------------------------------------------------------------------- Net assets at end of year $ 14,625,212 $ 8,498,272 $ 0 $ 1,657,989 $ 4,302,940 ================================================================================ Plan's beneficial interest at 12/31/95 $ 3,699,303 $ 3,158,299 $ 0 $ 225,553 $ 538,901 ================================================================================ Equity International Loan Fund Fund Fund ----------------------------------------------- Net assets at beginning of year Interest and investment income $ 152,964 $ 46,381 Contributions received: Employer Company, net of forfeitures (108) (324) Employees 834,762 274,684 Net realized and unrealized (depreciation)/appreciation 520,515 (34,528) Loans to participants, net of repayments (180,625) (21,769) $ 717,488 Payments to participants (46,311) (45,754) Transfers (to) from other accounts 4,839,217 1,222,138 ----------------------------------------------- Net assets at end of year $ 6,120,414 $ 1,440,828 $ 717,488 =============================================== Plan's beneficial interest at 12/31/95 $ 732,247 $ 124,544 $ 58,552 ===============================================
* Formerly named the General Investment Fund. Note: Certain funds above include investments in Chase Manhattan Bank Domestic Liquidity Funds. 9 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) D. Changes in AIP Master Trust Net Assets by Fund (continued) Changes in the AIP Master Trust net assets held in the stock, investment and index funds during the year ended December 31, 1994 were as follows: Phillips- Van Heusen General Stock Corp. Common Investment Index Stock Fund Fund Fund --------------------------------------- Net assets--beginning of year $ 56,372,946 $ 6,898,939 $ 6,838,298 Interest and investment income 244,703 298,900 204,310 Contributions received: Employer Company, net of forfeitures 1,585,769 272,080 329,308 Employees 4,041,108 946,037 883,455 Net realized and unrealized appreciation (34,277,461) -- (87,946) Payments to participants (3,636,527) (768,847) (470,352) Transfers from (to) other accounts 558,738 (465,473) (93,265) --------------------------------------- Net assets--end of year $ 24,889,276 $ 7,181,636 $ 7,603,808 ======================================= Plan's beneficial interest at 12/31/94 $ 6,276,190 $ 2,136,100 $ 1,246,083 ======================================= E. Income Tax Status The Internal Revenue Service has ruled that the Plan qualifies under Section 401(a) of the Internal Revenue Code ("IRC") and therefore its related trust is tax-exempt under Section 501(a) of the IRC. The Plan's most recent determination letter is dated April 27, 1995. The Administrative Committee of the Plan is not aware of any course of action or series of events that have occurred that might adversely affect the qualified status of the Plan. 10 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) F. Assets of the Plan Assets of the Plan are included in the assets of the AIP Master Trust held by The Chase Manhattan Bank, N.A. The assets of the AIP Master Trust are presented in the following table. Investments that represent 5% or more of the Master Trust's total net assets are identified by an asterisk. December 31, 1995 1994 ------------------------ Investments at Fair Value as Determined by Quoted Market Price- Shares of registered investment companies: Fidelity Growth & Income Portfolio, 226,232 shares* $ 6,119,575 $ -- Fidelity Intermediate Bond Fund, 159,268 shares 1,657,981 -- Fidelity Puritan Fund, 252,964 shares* 4,302,912 -- Templeton Foreign Fund, 156,952 shares 1,440,819 -- Phillips-Van Heusen Corp. Common Stock, 1,401,647 and 1,619,195 shares, respectively* 13,841,264 24,692,724 Investments at Estimated Fair Value- Common trust fund* 9,283,104 14,903,103 Promissory notes (participant loans) 717,488 -- Accrued income: Common Stock Employer Company -- 60,102 Common trust fund -- 18,791 ------------------------ Total net assets $37,363,143 $39,674,720 ======================== Plan's beneficial interest $ 8,537,399 $ 9,661,373 ======================== 11 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) F. Assets of the Plan (continued) During 1995 and 1994, the AIP Master Trust's investments depreciated in fair value by $6,239,803, net, and $34,365,407, as follows: Net Appreciation (Depreciation) in Fair Value During Year Ended December 31, 1995 1994 --------------------------- Fair Value of Assets Determined by Quoted Market Price: Phillips-Van Heusen Corp. Common Stock $(8,305,792) $(34,277,461) Fidelity Growth & Income Portfolio 520,515 -- Fidelity Intermediate Bond Fund 18,787 -- Fidelity Puritan Fund 152,961 -- Templeton Foreign Fund (34,528) -- Fair Value Estimated by Trustee: Common trust fund 1,408,254 (87,946) --------------------------- Net depreciation in fair value $(6,239,803) $(34,365,407) =========================== Plan's beneficial interest $(2,052,044) $ (8,257,421) =========================== G. Differences Between Plan Financial Statements and Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500: December 31, 1995 ------------ Net assets available for plan benefits per the financial statements $ 8,537,399 Amounts allocated to withdrawn participants at December 31, 1995 (1,485,459) ----------- Net assets available for plan benefits per the Form 5500 $ 7,051,940 =========== 12 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Notes to Financial Statements (continued) G. Differences Between Plan Financial Statements and Form 5500 (continued) The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
Year Ended December 31, 1995 ------------ Benefits paid to participants per the financial statements $3,712,868 Add: Amounts allocated to withdrawn participants at December 31, 1995 1,485,459 Less: Amounts allocated to withdrawn participants at December 31, 1994 (278,554) ---------- Benefits paid to participants per the Form 5500 $4,919,773 ==========
Amounts allocated to withdrawn participants on the Form 5500 represent benefit claims that have been processed and approved for payment prior to year-end but not yet paid. 13 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates AIP Master Trust Assets Held for Investment December 31, 1995 Market Cost Value -------------------------- Fidelity Growth & Income Portfolio $ 5,659,975 $ 6,119,575 Fidelity Intermediate Bond Fund 1,639,092 1,657,981 Fidelity Puritan Fund 4,205,644 4,302,912 Templeton Foreign Fund 1,516,431 1,440,819 Chase Manhattan Bank--Domestic Liquidity Fund 9,283,104 9,283,104 Phillips-Van Heusen Corporation Common Stock--1,401,647 shares* 17,565,607 13,841,264 Promissory Notes 717,488 717,488 -------------------------- $40,587,341 $37,363,143 ========================== * Party-in-interest investment (Note C). 14 Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates Reportable Transactions Year ended December 31, 1995
Purchase Selling Cost of Party Involved Description Price Price Asset Sold - ------------------------------------------------------------------------------------------------------------------------------------ Category (i) - Individual Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 9,097,274 $ 6,037,061 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ 9,097,274 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ 9,128,548 $ 9,128,548 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio $ 3,700,000 Chase Manhattan Bank, N.A. Fidelity Puritan Fund $ 2,700,000 Category (iii) - Series of Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 200,472 $ 9,168,420 $ 6,095,288 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ 21,444,628 $ 19,826,360 $ 19,826,360 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio $ 5,696,130 $ 97,070 $ 36,156 Chase Manhattan Bank, N.A. Fidelity Puritan Fund $ 4,234,866 $ 84,915 $ 29,233 Chase Manhattan Bank, N.A. Phillips-Van Heusen Corp. Common Stock $ 3,376,204 $ 5,921,871 $ 5,308,840 Net Gain Number of Party Involved Description or (Loss) Transactions - ----------------------------------------------------------------------------------------------------------------- Category (i) - Individual Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 3,060,212 1 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund 1 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ - 1 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio 1 Chase Manhattan Bank, N.A. Fidelity Puritan Fund 1 Category (iii) - Series of Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 3,073,132 12 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ - 362 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio $ 60,914 23 Chase Manhattan Bank, N.A. Fidelity Puritan Fund $ 55,692 22 Chase Manhattan Bank, N.A. Phillips-Van Heusen Corp. Common Stock $ 613,031 100
There were no category (ii) or (iv) reportable transactions for the year ended December 31, 1995. 15 Financial Statements and Supplemental Schedules Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Years ended December 31, 1995 and 1994 with Report of Independent Auditors Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Financial Statements and Supplemental Schedules Years ended December 31, 1995 and 1994 Contents Report of Independent Auditors........................................... 1 Statements of Net Assets Available for Plan Benefits..................... 3 Statements of Changes in Net Assets Available for Plan Benefits.......... 4 Notes to Financial Statements ........................................... 5 Schedule of AIP Master Trust Assets Held for Investment.................. 14 Reportable Transactions.................................................. 15 [Letterhead of Ernst & Young LLP] Report of Independent Auditors Administrative Committee of the Plan Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates New York, New York We have audited the accompanying statements of net assets available for plan benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates as of December 31, 1995 and 1994, and the related statements of changes in net assets available for plan benefits for the years then ended. 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 plan benefits of the Plan as of December 31, 1995 and 1994, and the changes in its net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. 1 Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental Schedule of AIP Master Trust Assets Held for Investment as of December 31, 1995 and Schedule of Transactions or Series of Transactions in Excess of 5% of the Current Value of AIP Master Trust Assets for the year then ended, are presented for the purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Ernst & Young LLP New York, New York June 21, 1996 2 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Statement of Net Assets Available for Plan Benefits December 31, 1995 1994 ----------------------------- Assets Investments, at fair value (Notes A and F): Shares of registered investment companies: Equity Fund $ 5,357,886 $ - Bond Fund 1,416,606 - Balanced Fund 3,718,654 - International Fund 1,306,130 - Common Stock--Employer Company 10,688,286 18,347,783 Common trust fund* 5,223,143 11,307,184 Participant loans receivable 652,036 - ----------------------------- Total investments 28,362,741 29,654,967 Receivables: Employer's contribution - 120,851 Participants' contributions - 237,582 ----------------------------- Total receivables - 358,433 Liabilities - - ----------------------------- Net assets available for plan benefits $28,362,741 $30,013,400 ============================= * Consists of the Money Market Fund in 1995 and the General Investment Fund and Stock Index Fund in 1994. See notes to financial statements. 3 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1995 1994 --------------------------- Additions Contributions: Employer Company, net of forfeitures $ 1,981,571 $ 1,376,862 Participants 4,103,309 3,614,830 --------------------------- 6,084,880 4,991,692 Interest and investment income 799,137 561,159 --------------------------- 6,884,017 5,552,851 Deductions Net transfers to PVH Associates Investment Plan for Hourly Associates 2,410,664 2,481,672 Payments to participants 2,049,064 3,164,566 --------------------------- 4,459,728 5,646,238 Net realized and unrealized depreciation of investments (Note F) (4,074,948) (25,882,591) --------------------------- Net decrease (1,650,659) (25,975,978) Net assets available for plan benefits at beginning of year 30,013,400 55,989,378 --------------------------- Net assets available for plan benefits at end of year $ 28,362,741 $ 30,013,400 =========================== See notes to financial statements. 4 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements December 31, 1995 A. Description of the Plan The following description of the Phillips-Van Heusen Corporation (the "Company") Associates Investment Plan for Salaried Associates (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. Plan Amendments On July 1, 1995, the Plan was amended to include new investment elections and to dissolve the Stock Index Fund into the remaining funds. The amendment also increased the participant contribution percentage limit and added a loan feature. General The Plan is a defined contribution plan covering salaried paid clerical employees of the Company who have at least one year of service (1,000 hours in a year) and are age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions Each year, participants may contribute up to 15% of pretax annual compensation, as defined by the Plan. The Company contributes 50% of the first 6% of base compensation that a participant contributes to the Plan. Participant Accounts Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) Plan earnings. Forfeited balances of terminated participants' nonvested accounts are used to reduce future Company contributions. One hundred percent of the Company contributions are automatically invested in the common stock of the Company. Participants age fifty-five or older may direct the Company contribution into any of the Plan's investment options. 5 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) A. Description of the Plan (continued) Vesting Amounts attributable to Company contributions become vested on the participant's sixty-fifth birthday or if the participant's employment by the Company terminates by reason of the participant's death or permanent disability or the participant has completed five years of service with the Company. Investment Options Upon enrollment in the Plan, a participant may direct employee contributions in 5% increments into any of the six investment options. A participant may contribute a maximum of 25% of employee contributions into the Phillips-Van Heusen Corporation Common Stock Fund. Phillips-Van Heusen Corporation Common Stock Fund - Funds are invested by the trustee in common shares of the Company. Common shares of the Company are purchased by the trustee in the open market. Money Market Fund - Funds are invested by the trustee in short-term obligations and money market instruments. Equity Fund - Funds are invested in shares of a registered investment company that invests primarily in common stocks. (Fidelity Growth & Income Portfolio) Bond Fund - Funds are invested in shares of a registered investment company that invests in corporate bonds and U.S. government securities. (Fidelity Intermediate Bond Fund) Balanced Fund - Funds are invested in shares of a registered investment company that invests in common stocks, preferred stocks, and bonds. (Fidelity Puritan Fund) International Fund - Funds are invested in shares of a registered investment company that invests in common stocks and bonds of companies and governments outside the United States. (Templeton Foreign Fund) 6 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) A. Description of the Plan (continued) Participant Loans Receivable Effective July 1, 1995, participants may borrow from the Plan, with certain restrictions, using their vested account balance as collateral. The minimum loan amount is $1,000 and the maximum loan amount is the lesser of (i) $50,000 reduced by the participant's highest outstanding loan balance during the previous twelve months or (ii) 50% of the vested value of the participant's account. Interest is fixed for the term of the loan at the prime rate as of the first business day of the month of application as published in the Wall Street Journal, plus 1%. Loan repayments are made through payroll deductions which may be specified for a term of 1 to 5 years or up to 15 years for the purchase of a primary residence. Payment of Benefits Participants entitled to final distributions generally will receive payment in the form of a lump sum amount equal to the value of their vested account. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. B. Significant Accounting Policies The accounting records of the Plan are maintained on the accrual basis. In accordance with the Rules and Regulations of the Department of Labor, investments are included at market value as determined by quoted market prices or at fair value as determined by Chase Manhattan Bank for the applicable Chase investment funds in the accompanying financial statements. Purchases and sales of securities are reflected on a trade date basis. Substantially all administrative expenses are paid by the Company. 7 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) B. Significant Accounting Policies (continued) All assets of the Plan are held by the trustee, Chase Manhattan Bank, in the Company's Associates Investment Plan Master Trust ("AIP Master Trust") and are segregated from the assets of the Company. The Plan shares in AIP Master Trust interest and investment income based upon its participants' shares of AIP Master Trust net assets available for plan benefits. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from the estimates. C. Transactions with Parties-in-Interest During the years ended December 31, 1995 and 1994, the AIP Master Trust purchased 226,108 and 183,321 shares, respectively, of the Company's common stock and received $298,851 and $229,091, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 443,656 and 66,935 shares of the Company's common stock during the years ended December 31, 1995 and 1994, respectively. 8 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) D. Changes in AIP Master Trust Net Assets by Fund Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 1995 were as follows:
Phillips-Van Heusen Corp. Money Stock Common Stock Market Index Bond Balanced Fund Fund* Fund Fund Fund -------------------------------------------------------------------------------- Net assets at beginning of year $ 24,889,276 $ 7,181,636 $ 7,603,808 Interest and investment income 258,386 509,408 116,968 $ 41,927 $ 97,653 Contributions received: Employer Company, net of forfeitures 2,349,930 180,822 244,807 (259) 857 Employees 2,311,251 956,599 537,338 235,349 583,942 Net realized and unrealized (depreciation)/appreciation (8,305,792) - 1,408,254 18,787 152,961 Loans to participants, net of repayments (284,434) (139,857) - (28,241) (62,562) Payments to participants (3,407,543) (1,587,240) (645,205) (6,938) (66,120) Transfers (to) from other accounts (3,185,862) 1,396,904 (9,265,970) 1,397,364 3,596,209 ================ ================ =============== =============== ============== Net assets at end of year $ 14,625,212 $ 8,498,272 $ 0 $ 1,657,989 $ 4,302,940 ================ ================ =============== =============== ============== Plan's beneficial interest at 12/31/95 $ 10,688,286 $ 5,223,143 $ 0 $ 1,416,606 $ 3,718,654 ================ ================ =============== =============== ============== Equity International Loan Fund Fund Fund -------------- ------------------ -------------- Net assets at beginning of year Interest and investment income $ 152,964 $ 46,381 Contributions received: Employer Company, net of forfeitures (108) (324) Employees 834,762 274,684 Net realized and unrealized (depreciation)/appreciation 520,515 (34,528) Loans to participants, net of repayments (180,625) (21,769) $ 717,488 Payments to participants (46,311) (45,754) Transfers (to) from other accounts 4,839,217 1,222,138 ============== ================== ============== Net assets at end of year $ 6,120,414 $ 1,440,828 $ 717,488 ============== ================== ============== Plan's beneficial interest at 12/31/95 $ 5,357,886 $ 1,306,130 $ 652,036 ============== ================== ==============
* Formerly named the General Investment Fund. Note: Certain funds above include investments in Chase Manhattan Bank Domestic Liquidity Funds. 9 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) D. Changes in AIP Master Trust Net Assets by Fund (continued) Changes in the AIP Master Trust net assets held in the stock, investment and index funds during the year ended December 31, 1994 were as follows:
Phillips- Van Heusen General Stock Corp. Common Investment Index Stock Fund Fund Fund ------------------------------------------------------- Net assets--beginning of year $ 56,372,946 $ 6,898,939 $ 6,838,298 Interest and investment income 244,703 298,900 204,310 Contributions received: Employer Company, net of forfeitures 1,585,769 272,080 329,308 Employees 4,041,108 946,037 883,455 Net realized and unrealized appreciation (34,277,461) - (87,946) Payments to participants (3,636,527) (768,847) (470,352) Transfers from (to) other accounts 558,738 (465,473) (93,265) ------------------------------------------------------- Net assets--end of year $ 24,889,276 $ 7,181,636 $ 7,603,808 ======================================================= Plan's beneficial interest at 12/31/94 $ 18,347,783 $ 5,023,047 $ 6,284,137 =======================================================
E. Income Tax Status The Internal Revenue Service has ruled that the Plan qualifies under Section 401(a) of the Internal Revenue Code ("IRC") and therefore its related trust is tax-exempt under Section 501(a) of the IRC. The Plan's most recent determination letter is dated April 27, 1995. The Administrative Committee of the Plan is not aware of any course of action or series of events that have occurred that might adversely affect the qualified status of the Plan. 10 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) F. Assets of the Plan Assets of the Plan are included in the assets of the AIP Master Trust held by The Chase Manhattan Bank, N.A. The assets of the AIP Master Trust are presented in the following table. Investments that represent 5% or more of the Master Trust's total net assets are identified by an asterisk. December 31, 1995 1994 ------------------------ Investments at Fair Value as Determined by Quoted Market Price- Shares of registered investment companies: Fidelity Growth & Income Portfolio, 226,232 shares* $ 6,119,575 $ -- Fidelity Intermediate Bond Fund, 159,268 shares 1,657,981 -- Fidelity Puritan Fund, 252,964 shares* 4,302,912 -- Templeton Foreign Fund, 156,952 shares 1,440,819 -- Phillips-Van Heusen Corp. Common Stock, 1,401,647 and 1,619,195 shares, respectively* 13,841,264 24,692,724 Investments at Estimated Fair Value- Common trust fund* 9,283,104 14,903,103 Promissory notes (participant loans) 717,488 -- Accrued income: Common Stock Employer Company -- 60,102 Common trust fund -- 18,791 ------------------------ Total net assets $37,363,143 $39,674,720 ======================== Plan's beneficial interest $28,362,741 $29,654,967 ======================== 11 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) F. Assets of the Plan (continued) During 1995 and 1994, the AIP Master Trust's investments depreciated in fair value by $6,239,803, net, and $34,365,407, as follows: Net Appreciation (Depreciation) in Fair Value During Year Ended December 31, 1995 1994 --------------------------- Fair Value of Assets Determined by Quoted Market Price: Phillips-Van Heusen Corp. Common Stock $(8,305,792) $(34,277,461) Fidelity Growth & Income Portfolio 520,515 -- Fidelity Intermediate Bond Fund 18,787 -- Fidelity Puritan Fund 152,961 -- Templeton Foreign Fund (34,528) -- Fair Value Estimated by Trustee: Common trust fund 1,408,254 (87,946) --------------------------- Net depreciation in fair value $(6,239,803) $(34,365,407) =========================== Plan's beneficial interest $(4,074,948) $(25,882,591) =========================== G. Differences Between Plan Financial Statements and Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1995 ------------ Net assets available for plan benefits per the financial statements $ 28,362,741 Amounts allocated to withdrawn participants at December 31, 1995 (1,063,868) ------------ Net assets available for plan benefits per the Form 5500 $ 27,298,873 ============
12 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Notes to Financial Statements (continued) G. Differences Between Plan Financial Statements and Form 5500 (continued) The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
Year Ended December 31, 1995 ------------- Benefits paid to participants per the financial statements $ 2,049,064 Add: Amounts allocated to withdrawn participants at December 31, 1995 1,063,868 Less: Amounts allocated to withdrawn participants at December 31, 1994 (463,025) ------------- Benefits paid to participants per the Form 5500 $ 2,649,907 =============
Amounts allocated to withdrawn participants on the Form 5500 represent benefit claims that have been processed and approved for payment prior to year-end but not yet paid. 13 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates AIP Master Trust Assets Held for Investment December 31, 1995 Market Cost Value -------------------------- Fidelity Growth & Income Portfolio $ 5,659,975 $ 6,119,575 Fidelity Intermediate Bond Fund 1,639,092 1,657,981 Fidelity Puritan Fund 4,205,644 4,302,912 Templeton Foreign Fund 1,516,431 1,440,819 Chase Manhattan Bank--Domestic Liquidity Fund 9,283,104 9,283,104 Phillips-Van Heusen Corporation Common Stock--1,401,647 shares* 17,565,607 13,841,264 Promissory Notes 717,488 717,488 -------------------------- $40,587,341 $37,363,143 ========================== * Party-in-interest investment (Note C). 14 Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates Reportable Transactions Year ended December 31, 1995
Purchase Selling Cost of Party Involved Description Price Price Asset Sold - -------------------------------------------------------------------------------------------------------------------------------- Category (i) - Individual Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 9,097,274 $ 6,037,061 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ 9,097,274 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ 9,128,548 $ 9,128,548 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio $ 3,700,000 Chase Manhattan Bank, N.A. Fidelity Puritan Fund $ 2,700,000 Category (iii) - Series of Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 200,472 $ 9,168,420 $ 6,095,288 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ 21,444,628 $ 19,826,360 $ 19,826,360 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio $ 5,696,130 $ 97,070 $ 36,156 Chase Manhattan Bank, N.A. Fidelity Puritan Fund $ 4,234,866 $ 84,915 $ 29,233 Chase Manhattan Bank, N.A. Phillips-Van Heusen Corp. Common Stock $ 3,376,204 $ 5,921,871 $ 5,308,840 Net Gain Number of Party Involved Description or (Loss) Transactions - --------------------------------------------------------------------------------------------------------------------- Category (i) - Individual Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 3,060,212 1 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund 1 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ - 1 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio 1 Chase Manhattan Bank, N.A. Fidelity Puritan Fund 1 Category (iii) - Series of Transactions in Excess of 5% of Plan Assets: Chase Manhattan Bank, N.A. CMB - S&P 500 Index Fund $ 3,073,132 12 Chase Manhattan Bank, N.A. CMB - Domestic Liquidity Fund $ - 362 Chase Manhattan Bank, N.A. Fidelity Growth & Income Portfolio $ 60,914 23 Chase Manhattan Bank, N.A. Fidelity Puritan Fund $ 55,692 22 Chase Manhattan Bank, N.A. Phillips-Van Heusen Corp. Common Stock $ 613,031 100
There were no category (ii) or (iv) reportable transactions for the year ended December 31, 1995. 15 EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS [LETTERHEAD OF ERNST & YOUNG LLP] Consent of Independent Accountants We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Associates Investment Plan for Salaried Associates and the Associates Investment Plan for Hourly Associates, of the Phillips-Van Heusen Corporation, of our reports dated June 21, 1996, with respect to the financial statements and supplemental schedules of the above mentioned plans included in this Annual Report (Form 11K) for the year ended December 31, 1995. /s/ Ernst & Young LLP June 21, 1996 New York, New York -----END PRIVACY-ENHANCED MESSAGE-----