Rabbi Trust Agreement - Levi Strauss & Co. and Boston Safe Deposit and Trust Co.
RABBI TRUST AGREEMENT
by and between
LEVI STRAUSS & CO.
and
BOSTON SAFE DEPOSIT AND TRUST COMPANY
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TABLE OF CONTENTS
SECTION PAGE
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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
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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.
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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
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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
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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
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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
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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
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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.
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(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.
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(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.
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(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
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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
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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.
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(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: __________________________________________
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Date: ___________________________________________
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RABBI 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
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