2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 382 EXECUTIVE COMPENSATION Compensation Discussion and Analysis Compensation Program COMPENSATION PHILOSOPHY AND OBJECTIVES The fundamental philosophy of our Program is to pay for performance, achieved through the alignment of our executives’ pay to the achievement of overall short- and long-term business strategies of VF. The Program incorporates the following objectives: • Motivate executives to accomplish VF’s short-term and long-term business objectives; • Provide annual incentives to executives based on corporate, business group and individual performance; • Provide executives with long-term equity-based compensation that aligns the interests of shareholders and executives; and • Offer total compensation that is competitive with other large U.S.-based companies with which VF may compete for executive talent. Our Program is designed to balance fixed and performance-based compensation components, and incentivize responsible achievement of multiple operating goals over one- and three-year periods. For the purpose of valuing total direct compensation, the performance-based elements are valued at their grant date at target levels. Such awards also provide for above- and below-target payout levels and thereby directly motivate executives to achieve VF’s business goals, reward them for achieving and exceeding these goals and reduce compensation below target levels if goals are not achieved. Following are the Elements of our Program: TYPE COMPONENT ELEMENT TERMS OBJECTIVE PERFORMANCE PERIOD Fixed Compensation Annual Base Salary Cash • Fixed pay reflective of an executive’s role, responsibilities and individual performance • Reviewed annually • Competitively compensate executives for their level of responsibility, skills, experience and sustained individual contribution N/A Performance- Based Compensation Annual Incentive Awards Cash • Variable, performance-based cash compensation earned based on achieving pre-established annual goals • Annual payouts range from 0% to 200% of the targeted incentive opportunity • Link compensation to annual operating performance One Year Long-term equity incentive awards Performance- Based Restricted Stock Units (“RSUs”) • Variable, performance-based equity compensation earned based on achieving pre-established financial goals and relative total shareholder return over a three-year performance period • Payouts range from 0% to 225% of the targeted incentive opportunity • Generally vest three years from grant date • Dividend equivalent units accumulate during the vesting period, but remain subject to performance • Paid in shares of VF Common Stock upon vesting • Link rewards to long-term operating performance • Link rewards to shareholder value creation through stock price growth • Aid in retention Three Years Stock Options • Generally vest one third each year for three years • Expire after ten years • Granted at fair market value • Link rewards to shareholder value creation through stock price growth • Aid in retention Up to Ten Years In establishing the elements of executive compensation, the Committee, in consultation with its independent consultant, assesses whether the Program’s terms promote unnecessary risk-taking. In performing this assessment, the Committee reviews such compensation design elements as pay mix, performance metrics, performance goals and payout curves, payment timing and adjustments, equity incentives, stock ownership requirements, clawbacks and VF’s trading policies. After performing this analysis, the Committee has concluded that the Program does not promote excessive or unnecessary risk-taking. 20 VF CORPORATION | 2018 ANNUAL MEETING OF SHAREHOLDERS Total of 05 pages in section VF CORPORATION