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TRUST AGREEMENT
TABLE OF CONTENTS
SECTION
PAGE
-------
----
1. ESTABLISHMENT OF TRUST
................................................ 1
2. TRUST FUNDING REQUIREMENT
............................................. 2
3. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
................. 3
4. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN
COMPANY IS INSOLVENT
............................................. 4
5. PAYMENTS TO COMPANY
................................................... 5
6. INVESTMENT AND ADMINISTRATIVE AUTHORITY
............................... 6
7. CONTRACTUAL SETTLEMENT AND INCOME; MARKET PRACTICE
SETTLEMENTS ........ 8
8. DISPOSITION OF INCOME
................................................. 9
9. ACCOUNTING BY TRUSTEE
................................................. 9
10. RESPONSIBILITY OF TRUSTEE
............................................. 9
11. COMPENSATION AND EXPENSES OF TRUSTEE
.................................. 11
12. CHANGE OF CONTROL
..................................................... 12
13. RESIGNATION AND REMOVAL OF TRUSTEE
.................................... 12
14. APPOINTMENT OF SUCCESSOR
.............................................. 13
15. AMENDMENT OR TERMINATION
.............................................. 13
16. MISCELLANEOUS
......................................................... 14
17. RELIANCE OF REPRESENTATIONS
........................................... 15
i
RABBI TRUST AGREEMENT
THIS RABBI TRUST AGREEMENT is effective this 1st day
of January 1,
2003, by and between LEVI STRAUSS & CO. ("Company") and BOSTON
SAFE DEPOSIT AND
TRUST COMPANY ("Trustee").
WHEREAS, the Company has adopted the nonqualified
deferred compensation
Plan listed in Appendix A (the "Plan" or, if additional plans
are added,
collectively referred to as the "Plan");
WHEREAS, the Company has incurred or expects to incur
liability under
the terms of such Plan with respect to the individuals
participating in such
Plan (individually a "Participant" and collectively the
"Participants");
WHEREAS, the Company wishes to establish a trust (the
"Trust") and to
contribute to the Trust the assets that shall be held therein,
subject to the
claims of the Company's creditors in the event of the
Company's Insolvency, as
defined in Section 4, until paid to Participants and their
beneficiaries in such
manner and at such times as specified in the Plan and this
Rabbi Trust
Agreement;
WHEREAS, it is the intention of the parties that this
Trust shall
constitute an unfunded arrangement and shall not affect the
status of the Plan
as an unfunded plan maintained for the purpose of providing
deferred
compensation for a select group of management or highly
compensated employees
for purposes of Title I of the Employee Retirement Income
Security Act of 1974,
as amended, ("ERISA") and benefits under an excess benefit
plan as that term is
defined in Section 3(36) of ERISA to certain employees in
excess of the
limitations on contributions and benefits imposed by ss.415 of
the Internal
Revenue Code of 1986, as amended,; and;
WHEREAS, it is the intention of the Company to make
contributions to
the Trust to provide a source of funds to meet its liabilities
under the Plan.
NOW THEREFORE, the parties do hereby establish the
Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust.
(a) The Company hereby establishes the Trust with
the Trustee,
consisting of such sums of money and other
property acceptable to
the Trustee as from time to time shall be paid
and delivered to
and accepted by the Trustee from the Company
(the "Trust Fund").
The Trustee shall have no duty to determine or
collect
contributions under the Plan and shall have no
responsibility for
any property until it is received and accepted
by the Trustee.
The Company shall have the sole duty and
responsibility for the
determination of the accuracy or sufficiency of
the contributions
to be made under the Plan.
1
All such money and other property paid or
delivered to and
accepted by the Trustee shall become the
principal of the Trust
to be held, administered and disposed of by the
Trustee as
provided in this Rabbi Trust Agreement.
(b) The Trust hereby established shall be
irrevocable;
notwithstanding the fact that the Trust is
irrevocable, the
Company may terminate the Plan (or any of them)
at any time.
(c) The Trust is intended to be a grantor trust, of
which the Company
is the grantor, within the meaning of subpart
E, part I,
subchapter J, chapter 1, subtitle A of the
Internal Revenue Code
of 1986, as amended, and shall be construed
accordingly. The
Company represents and warrants to the Trustee
that: (i) the Plan
for which benefits are or may become payable
under this Trust is
not subject to Part 4 of Title I of ERISA; and
(ii) the Plan
covers, and will cover, only (x) a select group
of management or
highly compensated employees as contemplated by
Section 401(a) of
ERISA and interpretations, opinions, and
rulings of the
Department of Labor thereunder or (y)
participants in an excess
benefit plan as defined in Section 3(36) of
ERISA.
(d) The principal of the Trust, and any earnings
thereon shall be
held separate and apart from other funds of the
Company and shall
be used exclusively for the purposes of paying
Participants under
the Plan, expenses of the Trust and, in the
event of Insolvency,
obligations of the Company to its general
creditors as herein set
forth. The Participants and their beneficiaries
shall have no
preferred claim on, nor any beneficial
ownership interest in, any
assets of the Trust. Any rights created under
the Plan and this
Rabbi Trust Agreement shall be unsecured
contractual rights of
the Participants and their beneficiaries
against the Company. Any
assets held by the Trust will be subject to the
claims of the
Company's general creditors under federal and
state law in the
event of Insolvency, as defined in Section 4(a)
herein.
(e) In addition to the contributions necessary to
meet the Trust
Funding Requirement (as defined in Section 2),
the Company, in
its sole discretion, may at any time, or from
time to time, make
additional deposits of cash or other property
in trust with the
Trustee to augment the principal to be held,
administered and
disposed of by the Trustee as provided in this
Rabbi Trust
Agreement. Neither the Trustee nor any
Participant or beneficiary
shall have any right to compel such additional
deposits.
Section 2. Trust Funding Requirement
From time to time but in no event less than
annually, the Company
shall determine the amount that would be needed
to pay
Participants and their beneficiaries the
benefit which they have
accrued pursuant to the terms of the Plan (as
certified to the
Trustee by the Company) as of the date of the
valuation. For
2
purposes of this valuation, the Company shall
disregard the total
amount credited to the LS&CO. Performance
Tracking Vehicle Fund
(as defined in the Plan) as of such valuation
date. The remaining
amount is referred to herein as the "Trust
Funding Requirement."
In the event that the fair market value of the
Trust assets as of
any valuation date before a Change of Control
is less than 90% of
the Trust Funding Requirement on such date ,
the Company shall
make an additional contribution to the Trust in
an amount
sufficient to bring the fair market value of
the assets in the
Trust up to 90% of the Trust Funding
Requirement as of the
valuation date. Further, the Company shall
establish the Trust
Funding Requirement as of the date of any
Change of Control. If
the fair market value of the Trust Fund as of
the valuation date
is less than the Trust Funding Requirement on
such date, the
Company shall make an additional contribution
so the value of
trust assets equals the Trust Funding
Requirement as of the
valuation date. After a Change of Control, the
Company shall
establish the Trust Funding Requirement on a
semi-annual basis
and make additional contributions as necessary
to bring the value
of the Trust Fund up to the Trust Funding
Requirement as of the
valuation date. Contributions under this
Section 2, if any, shall
be made as soon as reasonably practicable after
the Trust Funding
Requirement is established for a valuation
date.
When computing the Trust Funding Requirement,
the Company may
exclude the benefits attributable to any
participant if
contributions to the Trust Fund on behalf of
the participant
could cause the participant to incur income tax
liability on
account of the contribution.
Section 3. Payments to Plan Participants and Their
Beneficiaries.
(a) The Company shall deliver to the Trustee a
schedule (the "Payment
Schedule") that indicates the amounts payable
in respect of each
Participant (and his or her beneficiaries), and
that provides a
formula or other instructions acceptable to the
Trustee for
determining the amounts so payable, the form in
which such amount
is to be paid (as provided for or available
under the Plan), and
the time of commencement for payment of such
amounts. The Company
shall be responsible for notifying the Trustee
of any change in
the information on the Payment Schedule. Except
as otherwise
provided herein, the Trustee shall make
payments to the
Participants and their beneficiaries in
accordance with such
Payment Schedule.
It is the intent of the Company and the Trustee
that the Company
shall be responsible for determining and
effecting all federal,
state and local tax aspects of the Plan and the
Trust Fund,
including without limitation income taxes
payable on the Trust
Fund's income, if any, any required withholding
of income or
other payroll taxes in connection with the
payment of benefits
from the Trust Fund pursuant to the Plan, and
all reporting
required in connection with any such taxes. To
the extent that
the Company is required by applicable law to
pay or withhold such
taxes or to file such reports, such obligation
shall be a
responsibility
3
allocated to the Company, as the case may be,
hereunder. To the
extent the Trustee is required by applicable
law to pay or
withhold such taxes or to file such reports,
the Company shall
inform the Trustee of such obligation, shall
direct the Trustee
with respect to the performance of such
obligations and shall
provide the Trustee with all information
required by the Trustee
to meet such obligations. Notwithstanding the
foregoing, the
Company may elect to pay any applicable taxes
directly. In the
event the Company pays taxes directly, such
amounts may be
reimbursed from Trust assets by the Trustee,
provided that the
Company certifies the amount of taxes paid
directly and instructs
the Trustee to remit a reimbursement of such
taxes to the
Company.
(b) The entitlement of a Participant or his or her
beneficiaries to
benefits under the Plan shall be determined by
the Company or
such party as it shall designate under the
Plan, and any claim
for such benefits shall be considered and
reviewed under the
procedures set out in the Plan. The Company
shall notify the
Trustee of such determination and shall direct
commencement of
payments of such benefits.
(c) The Company may make payment of benefits
directly to the
Participants or their beneficiaries as they
become due under the
terms of the Plan. The Company shall notify the
Trustee of its
decision to make payment of benefits directly
prior to the time
amounts are payable to Participants or their
beneficiaries. If
requested by the Company, the Trustee shall
reimburse the Company
for any benefits under the Plan and Trust which
are paid by the
Company or otherwise satisfied. In addition, if
the principal of
the Trust, together with any earnings thereon,
are not sufficient
to make payment of benefits in accordance with
the terms of the
Plan, the Company shall immediately make up the
balance of each
such payment as it falls due. The Trustee shall
notify the
Company when principal and earnings are not
sufficient.
Section 4. Trustee Responsibility regarding Payments to
Trust Beneficiary
When Company Is or Is Alleged to Be Insolvent.
(a) The Trustee shall cease payment of benefits to
the Participants
and their beneficiaries if the Company is
Insolvent. The Company
shall be considered "Insolvent" for purposes of
this Rabbi Trust
Agreement if (i) the Company is unable to pay
its debts as they
become due, or (ii) the Company is subject to a
pending
proceeding as a debtor under the United States
Bankruptcy Code. A
determination of Insolvency under the terms of
this Rabbi Trust
Agreement does not constitute an admission of
insolvency by the
Company for any other purpose.
(b) At all times during the continuance of this
Trust, as provided in
Section 1(d) hereof, the principal and income
of the Trust shall
be subject to claims of general creditors of
the Company under
federal and state law as set forth below.
(1) The Board of Directors and the Chief
Executive Officer of the
Company shall have the duty to inform the
Trustee in writing
of the Company's
4
Insolvency. If a person claiming to be a
creditor of the
Company alleges in writing to the Trustee
that the Company
has become Insolvent, the Trustee shall
determine whether the
Company is Insolvent and, pending such
determination, the
Trustee shall discontinue payment of
benefits to the
Participants or their beneficiaries. In all
cases, the
Trustee shall be entitled to conclusively
rely upon the
written certification of the Board of
Directors or the Chief
Executive Officer of the Company when
determining whether the
Company is Insolvent.
(2) Unless the Trustee has received notice from
the Company or a
person claiming to be a creditor alleging
that the Company is
Insolvent, the Trustee shall have no duty
to inquire whether
the Company is Insolvent. The Trustee may
in all events rely
on such evidence concerning the Company's
solvency as may be
furnished to the Trustee and that provides
the Trustee with a
reasonable basis for making a determination
concerning the
Company's solvency.
(3) If at any time the Trustee has determined
that the Company is
Insolvent, the Trustee shall discontinue
payments to the
Participants or their beneficiaries and
shall hold the assets
of the Trust for the benefit of the
Company's general
creditors except that the Trustee's fees
and expenses may
continue to be paid pursuant to Section 11
subject to any
applicable bankruptcy rules. Nothing in
this Rabbi Trust
Agreement shall in any way diminish any
rights of the
Participants or their beneficiaries to
pursue their rights as
general creditors of the Company with
respect to benefits due
under the Plan or otherwise.
(4) The Trustee shall resume the payment of
benefits to the
Participants or their beneficiaries in
accordance with
Section 3 of this Rabbi Trust Agreement
only after the
Trustee has determined that the Company is
not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets if
the Trustee
discontinues the payment of benefits from the
Trust pursuant to
Section 4(b) hereof and subsequently resumes
such payments, the
first payment following such discontinuance
shall include the
aggregate amount of all payments due to the
Participants or their
beneficiaries under the terms of the Plan (as
certified to the
Trustee by the Company) for the period of such
discontinuance
less the aggregate amount of any payments made
to the
Participants or their beneficiaries by the
Company in lieu of the
payments provided for hereunder during any such
period of
discontinuance.
Section 5. Payments to Company.
Except as otherwise specifically provided in
this Rabbi Trust
Agreement, the Company shall have no right or
power to direct the
Trustee to return to the Company or to divert
to others any of
the Trust assets before all payment of
5
benefits has been made to the Participants and
their
beneficiaries pursuant to the terms of the Plan
(as certified to
the Trustee by the Company). Notwithstanding
the above, in the
event that the Company reasonably determines as
of any valuation
date that the fair market value of Trust assets
exceeds 110% of
the Trust Funding Requirement (the amount of
such excess over
110% referred to hereinafter as "Trust
Surplus"), then the
Company may direct the Trustee to transfer to
the Company such
assets as shall be designated by the Company in
an amount not to
exceed the Trust Surplus. The Trustee shall be
entitled to rely
solely on the Company's representation that the
amounts directed
to be returned to the Company do not exceed the
applicable Trust
Surplus and shall have no duty to review the
Company's
determination of the amount of the Trust
Surplus. In addition,
the Company may direct the Trustee to transfer
to the Company
Trust Fund assets in an amount necessary to
avoid triggering
taxable income to a Participant or beneficiary
if such
Participant or beneficiary would be required to
recognize income
tax on such funds if they remain in the Trust.
The Trustee shall
be entitled to rely solely on the Company's
representation that
the amount directed to be returned to the
Company could become
taxable to a Participant or beneficiary and
shall have no duty to
review the Company's determination of the
amount.
Section 6. Investment and Administrative Authority.
(a) Prior to a Change of Control the Company shall
establish and
maintain written investment guidelines (the
"Investment
Guidelines"), which may be revised by the
Company from time to
time, for the investment of the assets in the
Trust Fund. The
Trust Fund shall at all times be managed in
accordance with the
Investment Guidelines then in effect. The
Company may appoint and
remove one or more investment managers from
time to time to
manage specified portions of the Trust Fund. To
the extent that
assets of the Trust Fund are not so managed by
an investment
manager appointed by the Company, the Company
shall manage all
such assets. The Company and each investment
manager shall
designate in writing the persons who are
authorized to represent
such party in dealing with the Trustee. Except
as provided in
subsection (b) below, the Trustee shall have no
investment duties
for the Trust Fund. The Trustee shall have no
duty to inquire
whether investment directions received from the
Company or an
investment manager are in accordance with the
Plan or the
Investment Guidelines, or to review the assets
purchased,
retained or sold.
(b) After a Change of Control, the Trustee shall
have and exercise
sole investment discretion with respect to all
of the Trust Fund
in accordance with the Investment Guidelines in
effect
immediately prior to a Change of Control, a
copy of which shall
be provided prior to a Change of Control to the
Trustee by the
Company. The Trustee's sole responsibility with
regard to
investment discretion shall be to exercise such
discretion in
accordance with the Investment Guidelines.
Thereafter, the
Investment Guidelines may be changed from time
to time by mutual
agreement of the Trustee and the Company. The
Trustee may, in its
sole
6
discretion, appoint, retain or terminate an
investment manager
(including any affiliate of the Trustee) to
manage all or a
portion of the Trust Fund in accordance with
the current
Investment Guidelines.
(c) The Company shall have the right at any time,
and from time to
time, in its sole discretion, to substitute
assets of equal fair
market value for any asset held by the Trust.
This right is
exercisable by Company in a non-fiduciary
capacity without the
approval or consent of any person in a
fiduciary capacity.
(d) In addition to those powers conferred by law,
the Trustee shall
have the following powers:
(1) The Trustee may invest and reinvest the
principal and income
of the Trust and keep it invested, without
distinction
between principal and income, in any
security or property
pursuant to the direction of the Company or
an investment
manager appointed by the Company prior to a
Change of Control
and in the Trustee's sole discretion after
a Change of
Control; provided, however, that in no
event may the Trustee
invest in securities (including stock or
rights to acquire
stock) or obligations issued by the
Company, other than a de
minimis amount held in common investment
vehicles in which
the Trustee invests. Also, in no event
shall the Trust be
invested in real estate. For this purpose,
"real estate"
includes, but is not limited to, real
property, leaseholds,
mineral interests, and any form of assets
which is secured by
any of the foregoing. All rights associated
with assets of
the Trust shall be exercised by the Trustee
or the person
designated by the Trustee, and shall in no
event be
exercisable by or rest with the
Participants.
(2) The Trustee may collect and receive any and
all money and
other property due the Trust and give full
discharge
therefor.
(3) The Trustee may deposit cash into interest
bearing accounts
in the banking department of the Trustee or
an affiliated
banking organization;
(4) The Trustee may purchase, enter, sell,
hold, and generally
deal in any manner in and with contracts
for the immediate or
future delivery of financial instruments of
any issuer or of
any other property and may also grant,
purchase, sell,
exercise, permit to expire, permit to be
held in escrow, or
otherwise acquire, dispose of, hold and
generally deal in any
manner with and in all forms of options or
any combination
thereof pursuant to the direction of the
Company or an
investment manager appointed by the Company
prior to a Change
of Control, and in the Trustee's sole
discretion after a
Change of Control provided that such
investments are in
accordance with the Investment Guidelines.
7
(5) The Trustee may settle, compromise or
submit to arbitration
any claims, debt or damages due or owing to
or from the
Trust; the Trustee may also commence or
defend suits or legal
proceedings to protect any interest of the
Trust, and may
represent the Trust in all suits or legal
proceedings in any
court or before any other body or tribunal.
(6) The Trustee may take all action necessary
to pay for
authorized transactions, including the
temporary advancement
of cash or securities to settle security
purchases and/or
foreign exchange or contracts for foreign
exchange and any
property at any time held in the Trust Fund
shall be security
therefore to the extent of such advancement
until it is
repaid.
(7) The Trustee may appoint custodians,
subcustodians or
subtrustees, domestic or foreign (including
affiliates of the
Trustee), as to part or all of the Trust.
The Trustee shall
not be responsible or liable for any losses
or damages
suffered by the Company arising as a result
of the insolvency
of any custodian, subcustodian or
subtrustee, except to the
extent the Trustee was negligent in its
selection or
continued retention of such custodian,
subcustodian or
subtrustee. In no event shall Trustee be
liable for the acts
or omissions of any custodian, subcustodian
or subtrustee
appointed pursuant to the direction of the
Company or an
investment manager.
(8) The Trustee may hold property in nominee
name, in bearer
form, or in book entry form, in a
clearinghouse corporation
or in a depository (including an affiliate
of the Trustee),
so long as the Trustee's records clearly
indicate that the
assets held are a part of the Trust. The
Trustee shall not be
responsible for any losses resulting from
the deposit or
maintenance of securities or other property
(in accordance
with market practice, custom, or
regulation) with any
recognized foreign or domestic clearing
facility, book-entry
system, centralized custodial depository,
or similar
organization.
(9) The Trustee may generally do all acts,
whether or not
expressly authorized, which the Trustee may
deem necessary or
desirable for the protection of the Trust.
Section 7. Settlement and Income; Market Practice
Settlements.
(a) In accordance with the Trustee's standard
operating procedure,
the Trustee shall credit the Trust Fund with
income, which shall
include interest, dividends and return of
capital, and maturity
proceeds on securities on contractual payment
date net of any
taxes or upon actual receipt. To the extent the
Trustee credits
income on contractual payment date, the Trustee
may reverse such
accounting entries to the contractual payment
date if the Trustee
reasonably believes that such amount will not
be received.
8
(b) In accordance with the Trustee's standard
operating procedure,
the Trustee will attend to the settlement of
securities
transactions on the basis of either contractual
settlement date
accounting or actual settlement date
accounting. To the extent
the Trustee settles certain securities
transactions on the basis
of contractual settlement date accounting, the
Trustee may
reverse to the contractual settlement date any
entry relating to
such contractual settlement if the Trustee
reasonably believes
that such amount will not be received.
(c) Settlements of transactions may be effected in
trading and
processing practices customary in the
jurisdiction or market
where the transaction occurs. The Company
acknowledges that this
may, in certain circumstances, require the
delivery of cash or
securities (or other property) without the
concurrent receipt of
securities (or other property) or cash. In such
circumstances,
the Trustee shall have no responsibility for
nonreceipt of
payment (or late payment) or nondelivery of
securities or other
property (or late delivery) by the
counterparty.
Section 8. Disposition of Income.
During the term of this Trust, all income
received by the Trust,
net of expenses and taxes, shall be accumulated
and reinvested.
Section 9. Accounting by Trustee.
The Trustee shall keep accurate and detailed
records of all
investments, receipts, disbursements, and all
other transactions
required to be made, including such specific
records as shall be
agreed upon in writing between the Company and
the Trustee.
Within sixty (60) days following the close of
each calendar year
and within ninety (90) days after the removal
or resignation of
the Trustee, the Trustee shall deliver to the
Company a written
account of its administration of the Trust
during such year or
during the period from the close of the last
preceding year to
the date of such removal or resignation,
setting forth all
investments, receipts, disbursements and other
transactions
effected by it, including a description of all
securities and
investments purchased and sold with the cost or
net proceeds of
such purchases or sales (accrued interest paid
or receivable
being shown separately), and showing all cash,
securities and
other property held in the Trust at the end of
such year or as of
the date of such removal or resignation, as the
case may be. If,
within 120 days after the Trustee mails to the
Company a
statement with respect to the Trust, the
Company has not given
the Trustee written notice of any exception or
objection thereto,
the statement shall be deemed to have been
approved, and in such
case, the Trustee shall not be liable for any
matters in such
statements. The Company or its agent shall have
the right at its
own expense and with prior written notice to
the Trustee to
inspect the Trustee's books and records
directly relating to the
Trust Fund during normal business hours.
Section 10. Responsibility of Trustee.
9
(a) The Trustee shall act with the care, skill,
prudence and
diligence under the circumstances then
prevailing that a prudent
person acting in like capacity and familiar
with such matters
would use in the conduct of an enterprise of a
like characterand
with like aims, provided, however, that the
Trustee shall incur
no liability to any person for any action taken
pursuant to a
direction, request or approval given by the
Company which is
contemplated by, and in conformity with, the
terms of the Plan
(as certified to the Trustee by the Company) or
this Trust and is
given in writing by the Company. In the event
of a dispute
between the Company and a third party, the
Trustee may apply to a
court of competent jurisdiction to resolve the
dispute.
(b) The Trustee is not a party to and has no duties
or
responsibilities under the Plan other than
those that may be
expressly contained in this Rabbi Trust
Agreement. In any case in
which a provision of this Rabbi Trust Agreement
conflicts with
any provision in the Plan, this Rabbi Trust
Agreement shall
control.
(c) The Trustee shall not be responsible for the
title, validity or
genuineness of any property or evidence of
title thereto received
by it or delivered by it pursuant to this Rabbi
Trust Agreement
and shall be held harmless in acting upon any
notice, request,
direction, instruction, consent, certification
or other
instrument believed by it to be genuine and
delivered by the
proper party or parties.
(d) The Company agrees to indemnify and hold
harmless the Trustee,
its parent, subsidiaries and affiliates, and
each of their
respective officers, directors, employees and
agents from and
against all liability, loss and expense,
including reasonable
attorneys' fees and expenses incurred by the
Trustee or any of
the foregoing indemnitees arising out of or in
connection with
this Rabbi Trust Agreement, except as a result
of the Trustee's
own negligence, willful misconduct, bad faith
or breach of this
Agreement or of its fiduciary duties . The
Trustee shall be fully
indemnified by the Company for any action taken
in accordance
with, or any failure to act in the absence of,
the Company's or
an investment manager's directions. If the
Trustee undertakes or
defends any litigation arising in connection
with this Trust, the
Company agrees to indemnify the Trustee against
the Trustee's
costs, expenses and liabilities (including,
without limitation,
attorneys' fees and expenses) relating thereto
and to be
primarily liable for such payments except where
the Trustee is
determined to be liable due to its negligence,
willful
misconduct, bad faith, or breach of this Rabbi
Trust Agreement or
of its fiduciary duties. If the Company does
not pay such costs,
expenses and liabilities in a reasonably timely
manner, the
Trustee may obtain payment from the Trust. This
Section 10(d)
shall survive the termination of this Rabbi
Agreement.
(e) The Trustee may consult with legal counsel (who
may also be
counsel for the Company generally) with respect
to any of its
duties or obligations hereunder and as a part
of its reimbursable
expenses under this Agreement, pay counsel's
reasonable
compensation and expenses. The Trustee shall be
entitled to rely
on
10
and may act upon advice of counsel on all
matters, and shall be
without liability for any action reasonably
taken or omitted
pursuant to such advice.
(f) The Trustee may hire agents, accountants,
actuaries, investment
advisors, financial consultants or other
professionals, including
affiliates, to assist it in performing any of
its duties or
obligations hereunder.
(g) The Trustee shall have without exclusion, all
powers conferred on
Trustees by applicable law, unless expressly
provided otherwise
herein, provided, however, that if an insurance
policy is held as
an asset of the Trust, the Trustee shall have
no power to name a
beneficiary of the policy other than the Trust,
to assign the
policy (as distinct from conversion of the
policy to a different
form) other than to a successor Trustee, or to
loan to any person
the proceeds of any borrowing against such
policy.
(h) Notwithstanding any powers granted to the
Trustee pursuant to
this Trust Agreement or to applicable law, the
Trustee shall not
have any power that could give this Trust the
objective of
carrying on a business and dividing the gains
therefrom, within
the meaning of Section 301.7701-2 of the
Procedure and
Administrative Regulations promulgated pursuant
to the Internal
Revenue Code.
(i) Notwithstanding anything in this Rabbi Trust
Agreement to the
contrary contained herein, the Trustee shall
not be responsible
or liable for any losses to the Trust resulting
from any event
beyond the reasonable control of the Trustee,
its agents or
custodians, including but not limited to
nationalization,
strikes, expropriation, devaluation, seizure,
or similar action
by any governmental authority, de facto or de
jure; or enactment,
promulgation, imposition or enforcement by any
such governmental
authority of currency restrictions, exchange
controls, levies or
other charges affecting the Trust's property;
or the breakdown,
failure or malfunction of any utilities or
telecommunications
systems; or any order or regulation of any
banking or securities
industry including changes in market rules and
market conditions
affecting the execution or settlement of
transactions; or acts of
war, terrorism, insurrection or revolution; or
acts of God; or
any other similar event. This Section shall
survive the
termination of this Rabbi Trust Agreement.
(j) The Trustee shall not be liable for any act or
omission of any
other person, except to the extent that such
person is an agent
of the Trustee (not appointed pursuant to the
direction of the
Company or an investment manager) or under the
control of the
Trustee, in carrying out any responsibility
imposed upon such
person and under no circumstances shall the
Trustee be liable for
any indirect, consequential, or special damages
with respect to
its role as Trustee.
Section 11. Compensation and Expenses of Trustee.
The Company shall pay all Trustee's fees and
expenses necessary
for the Trustee to fulfill its duties hereunder
as mutually
agreed between the parties. If not so
11
paid within sixty (60) days after an invoice is
sent to the
Company, the fees and expenses shall be paid
from the Trust. The
Company acknowledges that as part of the
Trustee's compensation,
the Trustee may earn interest on balances
including disbursement
balances and balances arising from purchase and
sale
transactions. If the Trustee advances cash or
securities to the
Trust for any purpose, or in the event that the
Trustee shall
incur or be assessed taxes, interest, charges,
expenses,
assessments, or other liabilities in connection
with the
performance of this Rabbi Trust Agreement,
except such as may
arise from its own negligent failure to act or
willful
misconduct, any property at any time held in
the Trust Fund shall
be, to the extent of the advance, security
therefor and the
Trustee shall be entitled to collect from the
Trust sufficient
cash for reimbursement, and if such cash is
insufficient, dispose
of the assets of the Trust Fund to the extent
necessary to obtain
reimbursement. To the extent the Trustee
advances funds to the
Trust for disbursements or to effect the
settlement of purchase
transactions, the Trustee shall be entitled to
collect from the
Trust either (i) with respect to domestic
assets, an amount equal
to what would have been earned on the sums
advanced (an amount
approximating the "federal funds" interest
rate) or (ii) with
respect to non-domestic assets, the rate
applicable to the
appropriate foreign market.
Section 12. Change of Control
(a) For purposes of this Rabbi Trust Agreement, the
term "Change of
Control" has the meaning given it in the U.S.
Dollar Indenture,
dated as of January 18, 2001, between the
Company and Citibank,
N.A. (the "Indenture"), as in effect on the
date of this Rabbi
Trust Agreement and without regard to any
subsequent (i)
amendment or termination of the Indenture or
(ii) full payment or
defeasance of the securities issued under, or
other discharge of
the Company's liabilities under, the Indenture.
(b) The Company shall have the duty to inform the
Trustee in writing
upon the occurrence of a Change of Control. The
Trustee shall be
entitled to conclusively rely upon such written
certification of
the Company and shall have no responsibility or
liability for
determining whether a Change of Control has
occurred.
Section 13. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by written
notice to the
Company, which shall be effective sixty (60)
days after receipt
of such notice unless the Company and the
Trustee agree
otherwise.
(b) The Trustee may be removed by the Company on
sixty (60) days
notice or upon shorter notice accepted by the
Trustee, except
that after a Change of Control as defined
herein, the Trustee may
not be removed by the Company for one year.
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(c) Upon resignation or removal of the Trustee and
appointment of a
successor Trustee, all assets shall
subsequently be transferred
to the successor Trustee. The transfer shall be
completed within
ninety (90) days after receipt of the notice of
resignation,
removal or transfer, unless the Company extends
the time limit.
(d) If the Trustee resigns or is removed, a
successor shall be
appointed in accordance with Section 14 hereof
by the effective
date of resignation or removal under paragraphs
(a) or (b) of
this Section. If no such appointment has been
made, the Trustee
may apply to a court of competent jurisdiction
for appointment of
a successor or for instructions. The Trustee
shall continue to
fulfill its duties hereunder and shall receive
compensation
pursuant to Section 11 until the successor's
appointment is
effective. All expenses of the Trustee in
connection with the
proceeding shall be allowed as administrative
expenses of the
Trust.
(e) If the Trustee resigns within one year of a
Change of Control, as
defined herein, the Trustee shall select a
successor Trustee in
accordance with the provisions of Section 14(c)
hereof prior to
the effective date of the Trustee's
resignation.
Section 14. Appointment of Successor.
(a) If the Trustee resigns or is removed in
accordance with Section
13 (a) or (b) hereof, the Company shall appoint
any third party,
such as a bank trust department or other party
that may be
granted corporate trustee powers under state
law, as a successor
to replace the Trustee upon such resignation or
removal. The
appointment shall be effective when accepted in
writing by the
new Trustee, who shall have all of the rights
and powers of the
former Trustee, including ownership rights in
the Trust assets.
The former Trustee shall execute any instrument
necessary or
reasonably requested by the Company or the
successor Trustee to
evidence the transfer.
(b) The successor Trustee need not examine the
records and acts of
any prior Trustee and shall not be responsible
for and the
Company shall indemnify and defend the
successor Trustee from any
claim or liability resulting from any action or
inaction of any
prior Trustee or from any other past event, or
any condition
existing at the time it becomes successor
Trustee.
(c) If the Trustee resigns pursuant to the
provisions of Section
13(e) hereof and selects a successor Trustee,
the Trustee may
appoint any third party such as a bank trust
department or other
party that may be granted corporate trustee
powers under state
law. The appointment of a successor Trustee
shall be effective
when accepted in writing by the new Trustee.
The new Trustee
shall have all the rights and powers of the
former Trustee,
including ownership rights in Trust assets. The
former Trustee
shall execute any instrument necessary or
reasonably requested by
the successor Trustee to evidence the transfer.
Section 15. Amendment or Termination.
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(a) Subject to Section 15(c), this Rabbi Trust
Agreement may be
amended by a written instrument which is
executed by the Trustee
and Company and which recites that it is an
amendment to this
Rabbi Trust Agreement. Notwithstanding the
foregoing, no such
amendment shall conflict with the terms of the
Plan (as certified
to the Trustee by the Company) or shall make
the Trust revocable.
(b) The Trust shall not terminate until the date on
which the
Participants and their beneficiaries are no
longer entitled to
benefits pursuant to the terms of the Plan (as
certified to the
Trustee by the Company). Upon termination of
the Trust any assets
remaining in the Trust shall be returned to the
Company.
(c) Notwithstanding any other provision in this
Rabbi Trust
Agreement, this Rabbi Trust Agreement may not
be amended within
one year after the occurrence of a Change of
Control, unless the
Trustee determines, in its discretion, that
such amendment is
necessary for the administration of the trust
and does not
conflict with or alter the provisions of the
Plan.
Section 16. Miscellaneous.
(a) Neither the Company nor the Trustee may assign
this Rabbi Trust
Agreement without the prior written consent of
the other, except
that the Trustee may assign its rights and
delegate its duties
hereunder to any corporation or entity which
directly or
indirectly is controlled by, or is under common
control with, the
Trustee. This Rabbi Trust Agreement shall be
binding upon, and
inure to the benefit of, the Company and the
Trustee and their
respective successors and permitted assigns.
Any entity which
shall by merger, consolidation, purchase, or
otherwise, succeed
to substantially all the trust business of the
Trustee shall,
upon such succession and without any
appointment or other action
by the Company, be and become successor trustee
hereunder, upon
notification to the Company
(b) Any provision of this Rabbi Trust Agreement
prohibited by law
shall be ineffective to the extent of any such
prohibition,
without invalidating the remaining provisions
hereof.
(c) Benefits payable to Participants and their
beneficiaries under
this Rabbi Trust Agreement may not be
anticipated, assigned
(either at law or in equity), alienated,
pledged, encumbered or
subjected to attachment, garnishment, levy,
execution or other
legal or equitable process.
(d) Notwithstanding anything to the contrary
contained elsewhere in
this Rabbi Trust Agreement, any reference to
the Plan or Plan
provisions which require knowledge or
interpretation of the Plan
shall impose a duty upon the Company to
communicate such
knowledge or interpretation to the Trustee. The
Trustee shall
have no obligation to know or interpret any
portion of the Plan
and shall in no way be liable for any proper
action taken
contrary to the Plan.
14
(e) This Rabbi Trust Agreement shall be governed by
and construed in
accordance with the laws of the Commonwealth of
Massachusetts.
The parties hereby expressly waive, to the full
extent permitted
by applicable law, any right to trial by jury
with respect to any
judicial proceeding arising from or related to
this Rabbi Trust
Agreement.
Section 17. Reliance of Representations.
(a) The Company and the Trustee each acknowledge
that the other will
be relying, and shall be entitled to rely, on
the
representations, undertakings and
acknowledgments of the other as
set forth in this Rabbi Trust Agreement. The
Company and the
Trustee each agree to notify the other promptly
if any of its
representations, undertakings, or
acknowledgments set forth in
this Rabbi Trust Agreement ceases to be true.
(b) The Company and the Trustee hereby each
represent and warrant to
the other that it has full authority to enter
into this Agreement
upon the terms and conditions hereof and that
the individual
executing this Rabbi Trust Agreement on their
behalf has the
requisite authority to bind the Company and the
Trustee to this.
The parties have executed this Rabbi Trust Agreement as of the
dates set forth
below.
LEVI STRAUSS & CO.
By: _____________________________________________
Name: ___________________________________________
Title: __________________________________________
Date: ___________________________________________
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By: _____________________________________________
Name: ___________________________________________
Title: __________________________________________
15
Date: ___________________________________________
16
TRUST AGREEMENT
Between Levi Strauss & Co. and Boston Safe Deposit and
Trust Company
APPENDIX A
Name of Plan
The Levi Strauss & Co. Deferred Compensation Plan for
Executives and Outside
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Directors
