Sample Business Contracts

Senior Executive Severance Plan - Levi Strauss & Co.

Sponsored Links

                               LEVI STRAUSS & CO.
                         SENIOR EXECUTIVE SEVERANCE PLAN

     1.  INTRODUCTION. Levi Strauss & Co. (the "Company") establishes the Senior
Executive  Severance Plan (the "Plan") effective as of July 1, 2000. The purpose
of the  Plan is to  recognize  the  past  service  of  Senior  Executives  whose
employment  is  involuntarily  terminated  as  set  forth  herein  by  providing
Severance  Payments.  The Plan is an unfunded  deferred  compensation plan for a
select group of management and highly compensated  employees that is intended to
qualify for the exemptions provided in section 201, 301 and 401 of ERISA and for
the alternative reporting method provided in DOL Reg. ss.2520.104-23.  This Plan
supercedes  all prior  policies  and  practices  of the Company  with respect to
severance  or  separation  pay  for  Senior   Executives   whose  employment  is
involuntarily  terminated  after June 30, 2000.  This Plan is the only severance
program for such Senior Executives.


         2.1   "COMPANY" means Levi Strauss & Co.

         2.2   "COMPENSATION" means a Senior  Executive's regular base salary at
the time of his or her termination.  In addition,  the term "Compensation" shall
also  include  such Senior  Executive's  target  bonus  amount  under the Annual
Incentive Plan ("AIP") for the fiscal year in which the termination is announced
to the Senior Executive.

         2.3   "COMPARABLE POSITION" means a position that  has  been determined
by the  Company,  in its sole  discretion,  to be  substantially  similar to the
Employee's  original position in terms of pay, benefits,  working conditions and
geographic location.

         2.4   "EMPLOYEE" means a common-law employee of the Company on the Home
Office  Payroll,  including  an  employee  classified  by the  Company as a U.S.
expatriate  employee,  who is not subject to the overtime provisions of the Fair
Labor  Standards  Act, and who is paid  through the  Company's  regular  payroll
system,  and who has not signed an  agreement  that he or she is not entitled to
benefits from the Company.

         2.5   "ERISA"  means  the  Employee  Retirement Income  Security Act of
1974, as amended.

         2.6   "GENERAL RELEASE AGREEMENT" means a  legally  binding document in
which an Employee  waives any and all claims against the Company  related to his
or her  employment or  separation  from  employment.  Whether or not an Employee
chooses  to sign the  General  Release  Agreement  is  completely  at his or her

         2.7   "PLAN" means  the  Levi  Strauss & Co. Senior Executive Severance
Plan, as set forth in this instrument and as hereafter amended.



         2.8   "SENIOR EXECUTIVE" means an Employee whose position is classified
under Band A, B, C or D in the Company's World-Wide Executive Compensation Plan.

         2.9   "SEVERANCE PAYMENT(S)" means payment of Severance Pay or Enhanced
Severance Pay Compensation continuation to an eligible Senior Executive pursuant
to Section 4 on account of the  termination  of his or her  employment  with the

         2.10  "TERMINATION DATE" means the last day upon which a Senior Execu-
tive is actively employed with the Company.


         3.1   GENERAL ELIGIBILITY. Except  as otherwise provided in the Plan, a
Senior  Executive is entitled to a Severance  Payment under the Plan only if his
or her employment with the Company is involuntarily  terminated by action of the
Company  after  June 30,  2000,  on  account of a  reduction  in force,  layoff,
position  elimination,  or  because  the  Company  has  determined,  in its sole
discretion, that his or her services are no longer required.

         3.2   EXCLUSIONS.  A Senior Executive  is not eligible for a  Severance
Payment if he or she:

               (a)  Voluntarily resigns before  his  or  her  last day of active
     employment as designated by the Company, even if he or she received advance
     notice of his or her involuntary termination;

               (b)  Is terminated because  of failure to return from an approved
     leave of absence;

               (c)  Resigns or  is involuntarily  terminated because the Company
     has determined that he or she violated any policy, procedure or rule of the
     Company, engaged in  dishonest or wrongful  conduct, committed any crime or
     performed his or her duties in an unacceptable manner;

               (d)  Resigns or is terminated after declining to  accept an offer
     of a Comparable Position with the Company;

               (e)  Has  an individual  written agreement  with the Company that
     provides for  any form of  severance,  separation,  or  special  retirement

         3.3   CERTAIN CORPORATE TRANSACTIONS.  Unless,  and only to the extent,
expressly  authorized  by the  Company or set forth in this Plan,  no  Severance
Payment is  payable  under the Plan to an  Employee  in the event of the sale or
other  disposition  of the  Company,  any  affiliate  or any  assets or stock of
either,  if the  Employee  (i)  continues  to be  employed by the  Company,  its
successor  or  an  affiliate  on or  after  the  date  of  such  sale  or  other
disposition,  (ii) is offered a Comparable Position with the acquiring entity or
any of its affiliates,  or (iii) is offered a Comparable Position with an entity
that was an  affiliate  of the  Company  immediately  prior to the sale or other




         4.1   PAYMENT AMOUNT. An eligible Senior Executive shall be entitled to
receive the following Severance Payments:

               (a)  SEVERANCE PAY:  Subject to  Section 4.2, except as otherwise
     provided  in  this  Plan, an  eligible  Senior  Executive  will continue to
     receive his or her BASE SALARY for a  period of  two (2) weeks beginning on
     the date he or she is notified that his or her employment is terminated. If
     the Company requests, the eligible Senior  Executive  will remain in his or
     her position during this two (2) week period.

               (b)  ENHANCED  SEVERANCE  PAY:  In  exchange  for  providing  the
     Company a valid General Release  Agreement  in accordance with Section 4.5,
     in a form acceptable to the Company, in addition  to payments under Section
     4.1 (a), and subject to Section 4.2,  following the  Termination  Date,  an
     eligible Senior Executive will receive  payments  either in installments on
     the same payment schedule and in the same amount as  the Senior Executive's
     Compensation or in a lump sum, solely at the discretion  of the Company, in
     accordance with the following schedule  (COMPENSATION  EQUALS  BASE  SALARY

               BAND A           104 weeks' Compensation

               BAND B           52 weeks' Compensation

               BAND C           26 weeks' Compensation, PLUS two
                                weeks Compensation times the number
                                of his or her Years of Service in
                                excess of 5, subject to a maximum
                                combined limit of 52 weeks'

               BAND D           26 weeks' Compensation, PLUS two
                                weeks Compensation times the number
                                of his or her Years of Service in
                                excess of 5, subject to a maximum
                                combined limit of 52 weeks'

     A "Year of Service" for purposes of this Section is a  twelve-month  period
     of employment beginning on the later of the Senior Executive's date of hire
     or most recent date of rehire. Years  of  Service  are  calculated in  full
     twelve month periods with no credit for partial years.


               (a)  All   Enhanced   Severance   Pay  under  Section  4.1(b)  is
     specifically conditioned upon the Senior Executive's execution of a General
     Release Agreement at  a  time  and in a manner  to  be  determined  by  the
     Company. Under no circumstances  will any Enhanced Severance Pay be made to
     a Senior Executive who elects not to sign a General Release Agreement.

               (b)  A Senior Executive  who  receives  consulting  fees from the
     Company following his or her Termination Date is not eligible for Severance



               (c)  Severance Payments are in lieu of payments under  any  other
     severance plan, program or arrangement of or with the Company.

               (d)  A Senior Executive is not eligible for Severance Payments if
     the Company determines that he or she:

                    (1)  has solicited any employee or consultant of the Company
                         to  leave  employment  with  the  Company   to   accept
                         employment with any other person,  company  or partner-

                    (2)  at any time  discloses  without the  Company's  written
                         permission any  confidential or proprietary information
                         that the Senior  Executive  has  learned as a result of
                         his or her employment  with  the  Company and  was  not
                         previously available in the public domain; or

                    (3)  at any time during the two-year period beginning on his
                         or her last day of active employment  with  the Company
                         performs work, as an employee or a consultant,  for any
                         person,  company  or   partnership  that  is  a  direct
                         competitor  of  the Company, including, but not limited
                         to VF Corp.,  Haggar,  Farah,  Tommy  Hilfiger,  Calvin
                         Klein, Guess, Bugle Boy, Ralph Lauren/Polo and The Gap.

     To the extent permitted by law, if  the  Company determines that the Senior
     Executive has engaged in any of these activities, it will immediately cease
     any unpaid Severance Payments and it will  have the right to seek repayment
     of any such payments that have already been made.


               (a)  Severance Payments shall be made in  such  form  as the Plan
     Administrator may determine in its sole and absolute discretion.

               (b)  If a Senior Executive dies  before  Severance  Payments  are
     completed, any remaining Severance  Payments  will be made  to  the  Senior
     Executive's estate.

               (c)  Payment  to  a Senior  Executive  of  any  unpaid  Severance
     Payments will cease immediately  upon  his  or  her  re-employment  by  the

         4.4   PLANT SHUT-DOWN OR MASS LAYOFF. If the Senior  Executive is  laid
off or discharged because of a  plant  shut-down  or  mass  layoff  to which the
Worker Adjustment and Retraining Notice Act of 1988 ("WARN") applies,  Severance
Payments shall not be available, except  as  provided  in  this  subsection. The
Company shall provide notice of termination  of  employment,  or  pay in lieu of
notice, or a combination of notice and pay in lieu of notice in



accordance  with the  provisions  of WARN.  The amount of Severance  Payments to
which the Senior  Executive is entitled  under the Plan shall be  determined  by
subtracting  the  number  of  days'  pay in lieu of  notice  he or she  receives
pursuant to WARN from the amount of Severance  Payments to which he or she would
be otherwise  entitled  under this Section 4. If the pay in lieu of notice under
WARN exceeds that Severance Payment amount the Senior Executive will be entitled
to no Severance Payments under this Plan.

         4.5   GENERAL   RELEASE  AGREEMENT.  The   applicable  General  Release
Agreement  shall be  furnished  to an  eligible  Senior  Executive  along with a
written explanation  regarding that General Release Agreement.  It is completely
within the eligible  Senior  Executive's  own discretion as to whether he or she
elects to sign the applicable  General  Release  Agreement.  An eligible  Senior
Executive is encouraged to review the applicable  General Release Agreement with
his or her personal attorney at his or her own expense, if he or she so desires.

               In order to  receive Enhanced Severance Pay under Section 4.1(b),
an eligible Senior  Executive must sign, date and return the applicable  General
Release Agreement to the Company within forty-five (45) days from the date he or
she receives the  applicable  General  Release  Agreement or as of the date such
Senior Executive  separates from employment with the Company and is no longer on
the Company payroll,  whichever is later. If an eligible Senior Executive elects
to sign the applicable General Release  Agreement,  he or she then has seven (7)
days  from the  date of such  signing  to  revoke  the  signed  General  Release
Agreement.  Any such  revocation  must be in writing and must be received by the
Company  or its  designee  within  the seven (7) day  revocation  period.  If an
eligible  Senior  Executive  elects to revoke his or her signed General  Release
Agreement, such Senior Executive shall not receive any Enhanced Severance Pay.

     5.  OTHER BENEFITS.  An eligible Senior Executive  who receives a Severance
Payment will also receive the following benefits:

               (a)  If a Senior  Executive  and/or his or her covered dependents
     elect(s) to  receive  medical  coverage  continuation  through Consolidated
     Omnibus Budget Reconciliation Act of 1985 ("COBRA"),  the  Company will pay
     the same percentage  of  the monthly cost  of  his  or  her  COBRA  medical
     coverage as it paid for  Senior  Executive's medical coverage during his or
     her active employment for the duration of the  Senior Executive's severance
     payment period under Section 4.1 above, up to  a maximum coverage period of
     18 months.



     During the  Company-Subsidized Coverage  Period,  Senior  Executive will be
     responsible for payment of the remainder of the cost of his  or  her  COBRA
     medical coverage and for the full cost of any  dental  or  vision  coverage
     elected by the Senior Executive. All periods of Company-Subsidized Coverage
     are   counted   toward   the   18-month  COBRA   entitlement.  After    the
     Company-Subsidized  Coverage  Period ends,  the  Senior  Executive  will be
     responsible for payment of his or her entire COBRA premium. Continuation of
     COBRA coverage will not extend beyond the date on which a terminated Senior
     Executive becomes  eligible  for  coverage  under another group health plan
     unless the new plan has a pre-existing  condition  limitation or the Senior
     Executive is entitled to Medicare.

               (b)  The Company will pay the cost of premiums under its standard
     basic  life  insurance  program  of $10,000 in accordance  with  the  COBRA
     provisions set forth in subsection (a) above.

               (c)  If a Senior Executive retires and becomes covered by Company
     retiree  health  benefits,  the  Company  will  subsidize  retiree  medical
     coverage in  accordance  with  the COBRA provisions set forth in subsection
     (a) above.

               (d)  The  Company  will  provide  Senior  Executive  with  career
     counseling and transition services as selected by the Company.

               (e)  If  Senior  Executive  has  been  employed by the Company at
     least one fiscal quarter in the fiscal  year  of  such  Senior  Executive's
     Termination Date, the Senior Executive shall be entitled to a payment under
     the  AIP  for  that  fiscal  year  based  on  the Senior Executive's actual
     performance during such fiscal year, pro-rated  to  reflect  the portion of
     the fiscal year actually worked by the Senior Executive

     6.  WITHHOLDING.  The Company will withhold from all Severance Payments all
required federal,  state, local and other taxes and any other payroll deductions

     7.  ADMINISTRATION. The Company has  the  sole  and unlimited discretion to
interpret the terms of the Plan and to make all determinations about eligibility
and payment of benefits.  All decisions of the Company,  any action taken by the
Company  with  respect to the Plan and within the powers  granted to the Company
under the Plan, and any  interpretation  by the Company of any term or condition
of the Plan, are  conclusive  and binding on all persons,  and will be given the
maximum  possible  deference  allowed  by law.  The  Company  may  delegate  and
reallocate any authority and responsibility with respect to the Plan.

     8.  AMENDMENT OR TERMINATION.  The  Company reserves the right, in its sole
and unlimited  discretion,  to amend or terminate the Plan at any time by action
of the  Company's  Chief  Executive  Officer  without prior notice to any Senior



     9.  CLAIMS PROCEDURE. Any  person who believes he or she is entitled to any
payment  under the Plan may submit a claim in writing to the  Company.  Any such
claim should be sent to the Health & Welfare Plans Administrative Committee, c/o
Levi Strauss & Co., P.O. Box 7215, San  Francisco,  CA 94120,  Attention:  Steve
Epstein.  If the claim is denied (either in full or in part),  the claimant will
be provided a written notice  explaining the specific reasons for the denial and
referring to the provisions of the Plan on which the denial is based. The notice
will describe any additional information needed to support the claim. The denial
notice will be provided  within 90 days after the claim is received.  If special
circumstances  require an extension of time (up to 90 days),  written  notice of
the extension will be given within the initial 90-day period.

     10. APPEAL  PROCEDURE. If  a  claimant's  claim is denied, the claimant may
apply in writing to the Company for a review of the decision  denying the claim.
The  claimant  then has the right to review  pertinent  documents  and to submit
issues and comments in writing.  The Company will provide  written notice of its
decision  on review  within  60 days  after it  receives  a review  request.  If
additional  time (up to 60 days) is needed to review the  request,  the claimant
will be given written notice of the reason for the delay.

     11. SOURCE OF PAYMENTS. All  Severance  Payments  will be paid in cash from
the general funds of the Company; no separate fund will be established under the
Plan;  and the Plan will have no assets.  Any right of any person to receive any
payment under the Plan will be no greater than the right of any other  unsecured
creditor of the Company.

     12. INALIENABILITY.  In no event  may  any Senior Executive sell, transfer,
anticipate, assign or otherwise dispose of any right or interest under the Plan.
At no time will any such right or interest be subject to the claims of creditors
nor liable to attachment, execution or other legal process.

     13. RECOVERY  OF  PAYMENTS  MADE  BY MISTAKE.  An eligible Senior Executive
shall be required to return to the Company  any  Severance  Payment,  or portion
thereof, made by a mistake of fact or law.

     14. NO ENLARGEMENT  OF  EMPLOYMENT  RIGHTS. Neither  the  establishment  or
maintenance of the Plan, the payment of any amount by the Company nor any action
of the Company shall confer upon any  individual any right to be continued as an
Employee  nor any right or  interest  in the Plan other than as  provided in the
Plan. Other than an Employee who has a written  agreement to the contrary signed
by the  President,  Chief  Executive  Officer or a Senior Vice  President of the
Company, every Employee is an employee-at-will whose employment with the Company
may be  terminated  by the  Company or the  Employee at any time with or without
cause and with no notice.

     15. APPLICABLE  LAW.   The  provisions  of  the  Plan  will  be  construed,
administered   and  enforced  in  accordance  with  ERISA  and,  to  the  extent
applicable, the laws of the State of California.



     16. SEVERABILITY.  If  any  provision  of  the  Plan  is  held  invalid  or
unenforceable,  its  invalidity  or  unenforceability  will not affect any other
provision of the Plan,  and the Plan will be  construed  and enforced as if such
provision had not been included.

     17. EXECUTION.

     IN WITNESS WHEREOF, Levi Strauss & Co., by its duly authorized officer, has
executed the Plan on the date indicated below.

                                  LEVI STRAUSS & CO.